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."
Will never pass (Score:4, Interesting)
My feelings is that banks are heaviest lobby what are in this world - they own money we need to keep to run this charade called Capitalism. They will hold governments hostage til they will relent on this.
I really hope that someone will proove me wrong, but this doesn't give any hope:
" The Chancellor George Osborne has delayed his return to London from Brussels this lunchtime after a row over proposals for a financial transaction tax at a meeting of European Finance Ministers.
According to sources Mr Osborne asked what was the point in even having a conversation about the financial transaction tax given that it was going to be rejected and then asked if it was âoethe best way to spend our timeâ.
I understand that the Chancellor said no bank would end up paying the tax and the final payer would be pensioners."
http://www.bbc.co.uk/news/uk-politics-15640299 [bbc.co.uk]
As said Will Emerson in Margin Call (played briliantly by Paul Bettany): "One thing I can say for sure: they never loose their money".
Re:A first (Score:4, Interesting)
Then you get lots of shady agencies whose whole task it is to be the "owner" of said stock for two weeks, while the "rights to get the stock after two weeks" is changing owner at high frequencies - you have just invented a new kind of derivate, the option to buy stock after a two weeks period.
Re:Gotta love these rich people (Score:4, Interesting)
I don't know about Gates, but Buffet is well-known for bemoaning the fact that he pays less (as a percentage) in taxes than his secretary does. I have never heard of him advocating any changes that would increase the tax burden on the Middle-class relative to his own. Quite the opposite, actually.
Higher taxes only affect some wealthy... (Score:5, Interesting)
Here's my economic theory of taxing the wealthy. You won't find it in any textbook. It may be right, or it may be crazy...
There are two types of wealthy people: the ones that actually create economic value (the Buffets, Jobs, and Gates of the world), and the ones who don't.
The latter became rich, not because of what they accomplished, but because they knew the right people. Went to the right schools. Had executive hair. Had charisma, but no actual ability hiding behind it.
If you're actually a source of economic value, taxes don't affect you as much as you'd think. Government takes, gives to the poor, makes them a bit richer, and they end up buying more of your product. There may not be a 1:1 correlation, but $1 in new taxes probably ends up being far less than $1 out of their pocket when all is said and done. It may even make you more money.
If, on the other hand, you're rich purely because of luck, then a higher tax rate affects you a lot more, because you can't count on the wealth you lose being recirculated to you. It will end up going to an actual value creator and not you.
That's why the Buffets and Gates of the world don't sweat higher taxes too much, and why you hear so much wailing and gnashing of teeth from Wall Street types over the very idea.
My 2 cents, anyway.
Re:Misleading post! (Score:5, Interesting)
The original Tobin Tax was targeting currency trading, but other economists since have proposed it for securities trading as well.
It tends to hit mostly the high-frequency traders and the big hedge funds who are constantly shuffling huge sums of money around. It has very little effect on somebody who makes a few trades a year as part of a smaller individual investment portfolio.
Re:Get a life (Score:3, Interesting)
I am not an expert, and no I can not explain exactly how it will happen.
I believe you mean to say "I have no idea what I'm talking about but I am going to say it anyway". Yeah buddy I actually make money by trading stocks so I know how it works. You, and everyone else that argues against HFT, have no fucking clue how the market works. HFT cannot alter the price. Because if Goldman Sachs is on one side of the trade with HFT, then JP Morgan is on the other side doing just the opposite. Otherwise you would be seeing prices all over the map, all the time. HFT is not a price maker, it's a price taker. When real money comes into the market - like on the day of the "flash crash" (a day that cost me, personally, $20,000), that is when the price moves. And curiously when the "flash crash" happened all the computers were instantly taken offline because the price moved so quickly it tripped the fail-safes. So what happened? For 5 minutes NO ONE WAS BUYING, which is why the market plummeted. If someone had left their computer on they would have bought the entire market. But since buying the whole market is not something a brokerage wants to do - even if it had money for it - the algorithms stopped the programs.
If you are desperate to sell and no one is around to buy, you will lower your price until someone buys. If you are desperate to sell and someone (a HFT program) is around to buy, you sell right away and usually close to the price you wanted. But you people who are completely clueless as to how a market works fail to understand this simple concept. In your theoretical world you think that just because you want to sell something, someone is going to buy it. Or just because you want to buy something, someone is going to sell it to you. That's not how the market works at all.
Re:A first (Score:2, Interesting)
Can I have my buying power back please
Your buying power was destroyed in 1971. This is nothing new. I've been trying to double my money every 7 years and even I am having trouble. I have a farm up for sale for $25 million US, and I'm not sure I want to sell it because I don't know anywhere safe to park the money. My girlfriend doesn't understand when I tell her that she is not rich at all even if she earns $120k a year plus stock options, and that there is no way she can retire early. But this isn't due to the recent credit crisis - this has been happening for a while.
And there's no end in sight - every time there's a hint of economic recovery, crude oil goes up and whacks everyone in the head. $96.56 for WTI and $116.11 for Brent right now. Why? We're at peak oil and running into serious price elasticity problems. It's going to get even more fun in a few years when we can no longer produce enough oil to meet demand no matter how we try. Because oil plugs into absolutely everything it's putting tremendous upward pressure on prices. Reckless money-printing by the world's governments is only encouraging inflation too. So if you think you don't have buying power now, wait a few years.
Re:Instead of Financial transactions? (Score:4, Interesting)
why not simply tax Capital Gains as income
I advocate this as well, though you would need to eliminate corporate income tax. Dividends should also be taxed as regular income. This would have the additional benefit of severely reducing overseas corporate tax havens, in fact possibly even making the US a haven. It would wipe out the entire corporate "creative accounting" industry, which IMHO is a good thing. I'm sure there will still be ways to dodge taxes, but nothing like the mess we have now.
I have no problem with keeping things like the mortgage deduction below a certain income limit, and phase it out for higher earners. Ease the shock to the housing market by grandfathering current loans. Most deductions should not be available for higher earners, except for charitable contributions.
Re:Be wary of taxes that billionaires want (Score:2, Interesting)
I had to google to find out what the fuck a 'position trader' was.
Apparently, guys like Soros make money by purchasing the stock of companies, and then hoping that stock will go up over the next several years! Oh noes! This must be stamped out immediately!
Here's a hint for everyone else: When someone says 'position trader', they mean actual investors in things. They mean what normal people think the stock market is for, 'investing in a company', and they mean every single 401k. People who say 'I think this company will do better than inflation this year, so I will purchase their stock.'(1)
As opposed to the HFT or even the day traders who are attempting to make money from market manipulations and randomness. And screw up the market for actual investments.
Heaven forbid we help out 'position' traders, you know, the people actually taking and holding long-term market positions, at the expense of the 'making money from random fluctuation' traders.
A complaint about that Soros is a 'position trader' is rather akin to pointing out that people in favor of laws against mugging people are not, themselves, muggers, and are often in fact mugging victims. And the laws they're promoting would result in them having more money and muggers having less.
Uh, yeah. We sorta already knew that, but thanks.
1) A 'position' also includes the idea that the stock might go down, so this also includes people who short stock long-term. Those people sometimes get a bad rap, but in reality people are needed to go short on stock so that other people can go long. Long-term shorts are not the problem, it's crap like HFT making a millisecond shorts in advance of someone selling a bunch of stock that are the problem.