Bill Gates Advocates Tax On Financial Transactions 694
First time accepted submitter wanzeo writes "With the current G-20 summit dominated by global financial uncertainty, previously unsuccessful tax strategies are getting new attention. In a short interview with the BBC, Bill Gates explains his support for a potential tax on financial transactions. The concept is sometimes called the Tobin tax after its originator, Nobel Laureate economist James Tobin, who first put forth the idea in 1972. Gates points to the success of Britain's Security Settlement Tax, and suggests that large economies like Germany, France, and the U.S. have expressed interest in his plan."
There is no Nobel Prize for economics (Score:0, Informative)
Stocks, bonds, derivatives, or foreign currency (Score:4, Informative)
Re:There is no Nobel Prize for economics (Score:5, Informative)
There are no Nobel prizes for...economics.
While, strictly speaking, that's true, it's close enough to the truth as to make little or no difference. There is a periodic prize that's awarded at the same time the Nobel prizes are awarded. This particular prize is given for achievements in economics, and the decision as to whom to award the gift to is made by the same people who award the Nobel prizes. It's called The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Your statement is little more than an exercise in pedantics.
~Loyal
Misleading post! (Score:2, Informative)
The "Tobin tax" specifically targets currency trading, not "financial transactions" in general. In fact, the title/body of the original article are so misleading, it should probably be yanked as troll bait. All the gory details can be had here: http://en.wikipedia.org/wiki/Tobin_tax [wikipedia.org]
Re:Higher taxes only affect some wealthy... (Score:5, Informative)
If you're looking for the economic term for your two different kinds of rich people, you're looking for "rent seekers" (which are opposed to less well defined people as "entrepreneur" or "capitalist" or "wealth creator"). I'd look it up on Wikipedia, and you can develop it a bit more.
As for why it's relevant to the debate, typically rent seekers are sitting on some sort of privilege (in law or in the market).
I would however comment that both Warren and Bill are beyond the point where they're sensitive to financial incentives.
Re:Instead of Financial transactions? (Score:4, Informative)
If that's the stock answer you get, then I suppose you are asking the wrong person. The right reason why capital gains are taxed lower is because they've already received an additional tax before being distributed. Capital gains, are subject to a corporate income tax before they are distributed, so they are taxed both before and after distribution. Salary, on the other hand, is NOT subject to corporate taxation (contrary to what Joe the Plumber would have you think), so the only taxation it receives is the income tax after it's paid out. The lower value of capital gains tax is supposed to even this out.
Now, capital gains can come in a few different forms. It can come in the form of a dividend, which clearly works as described above. On the other hand, it can also come in the form of an increase in the stock value, and that's not so clearly tied to the corporate assets. In theory it should be somewhat reflective of the corporate assets, and those assets have likewise been reduced by the amount of the corporate tax, so to that degree, the above holds true. However, stock value also has a large component that ISN'T tied directly to corporate assets, but rather just to the whims of the market, and I think it's fair to say that portion of it is only subject to the capital gains rate.
Note, I'm not saying I believe the capital gains rate is too high, too low, or just right. I'm merely explaining the logic behind it being lower.
Re:Stocks, bonds, derivatives, or foreign currency (Score:4, Informative)
Re:Stocks, bonds, derivatives, or foreign currency (Score:4, Informative)
I far prefer having a 401k than a pension plan. It gives me more job mobility - most pensions back-load the benefits, so that those who move from job to job have less at retirement - and puts me less at the mercy of corrupt management or corrupt union bosses (depending on who manages the pension fund). It also allows companies to easily predict compensation costs associated with retirement, which as an employee prevents me from facing an underfunded pension plan that ends up paying pennies on the dollar.
The only downside for me is that I face the market risk, rather than the pension fund. But I have more flexibility to do that than I do in a pension fund - check out how many pension funds have become insolvent - so I'm ok with that.
Re:Instead of Financial transactions? (Score:4, Informative)
capital gains should, if anything, be taxed as unearned income