A new EU tax that will mess Britain's Stock Market.... Sly barstewards.

Discussion in 'Current Affairs, News and Analysis' started by Negligent-Discharge, Jun 4, 2012.

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  1. Negligent-Discharge

    Negligent-Discharge LE Book Reviewer

    It’s early in Blighty and TSO’s snoring is keeping me awake so it’s tv land for me. I stumbled on the rather dull Parliament channel where there was an interview with some eurocrats and they were about a new tax that I haven’t seen in the general meedja.

    It’s called the Transaction Tax and would, they reckon, raise some 90Bn Euros, by taxing all transactions on the member countries’ stock exchanges. Considering that Britain – the 2nd largest net giver in Euroland – has such a huge stock exchange and smaller countries like Greece, the Netherlands etc. have a negligible turnover on their markets it looks like we’re about to be hit again.

    This will, of course, hit the major financial institutions here and move away inward investment from non-Euroland countries.

    Does anyone know about this or am I just being a cloth eared Jock at 0430? What struck my cynical mind was how it was told. It was very much a "Look, over there... a flying pig!" whilst they sneakily pillage your pockets.

    STOP PRESS.... Adolf Merkel's behind it in her bid to make more Lebensraum for the German economy. See http://ec.europa.eu/taxation_customs/taxation/other_taxes/financial_sector/index_en.htm Why aren't the British meedja picking up on it?
  2. IIRC this is the 'Tobin Tax' and has had a decent airing. Dunno if it will come to pass....
  3. Obama tried something similar in the US. The CME threatened to move either to another state or offshore so it was scrapped. Interesting he does not mention the leverage of derivatives, I can only assume they are going to try to tax a 100 Eurex contract at its full leveraged price of 100,000 Euro. 0.01% of that sum is a lot of money even for a small size trader. I will look into this one a bit more but ot sounds like a sneak back tax which will further encourage the flight offshore of the accounts, hardly the best plan for European growth.
  4. Wasn't this the financial transactions tax proposals from Europe that Cameron blocked recently or is it something different?
  5. Wordsmith

    Wordsmith LE Book Reviewer

    Simple - the euro is proving an extremely expensive mistake. Everyone thinks that someone else should pay for clearing up the mess. As about 75% of financial transactions are carried out in London, the majority of any money raised from any Tobin tax would come from the UK - thus helping euroland pay for the mess they're in without raising any of their own taxes.

    As the UK is financially dependent on London being one of the largest financial centres in the world, it would also completely screw up the UK economy.

    Apart from those minor points, I can't see much wrong with the idea....

  6. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    The Independent

    That enough coverage over the political spectrum?
  7. Alsacien

    Alsacien LE Moderator

    This is the ill-conceived transaction tax that Cameron could have gotten blocked (as the support was there). But instead he vetoed the fiscal agreement that would not effect the UK anyway, and managed to upset his allies.

    Nice one Dave, unfortunately the ramifications continue, the problem remains, and The Mail headlines are long forgotten.....
  8. Wordsmith

    Wordsmith LE Book Reviewer

    Sadly, I don't think Dave will ever kill it. A transaction tax has two attractions for mainland Europe.

    1) It'll primarily raise money from the UK - and it's always great if someone else can be made to pay the bills.

    2) As far as France, Germany, etc, are concerned it'll be striking a blow at the evil Anglo-Saxon banking system.

    Even if Cameron had played his cards properly at the EU summit, the Tobin tax will continue to arise zombie like from the grave. It's too attractive for countries that have a smaller banking sector and would like to give London a bashing.

  9. Alsacien

    Alsacien LE Moderator

    He missed his chance, the support was there to have it removed from the table until at least 2014.
    The financial sectors in France and Germany would also have been on board, but could not without UK support - it would be dead in the water.....

    There is no conspiracy here, just simple political point scoring against bankers.
  10. The tax could be more correctly referred to as the City of London Tax. Desperate for cash, the Eurozone sees The City as one of Europe's last remaining untapped sources of income. Creating a cross border tax that's controlled and spent by Brussels would also do wonders for the EU's pretentions about being a sovereign state.

    Problem is, the days when City business was transacted over four hour lunches in members only gentlemens' clubs are gone. As the Americans discovered, a bank can do its business from anywhere in the world and a transaction tax will only reinforce that fact in the minds of bankers. The left don't seem to understand that there is a limit on the amount of tax that you can get out of people.

    Nonetheless, the Tobin Tax is strongly supported by prominent economists like Bill Nighy, Ewan "Obi Wan" McGreggor and Polly Toynbee. Dig up some of the videos they've made. They're hilarious. And don't miss the next Star Wars movie starring Alan Greenspan and Mervyn King.
    • Like Like x 3
  11. 80% of european financial transactions take place in London. Any plans for a tobin tax would thus raise almost all revenue from London. It is not surprising Cameron vetoed it.

    I agree the French will keep pushing for it. Personally I am in favour of the tax, and I don't think it can work unless it is done at a European level.
  12. Surely this tax would be a serious nail in the coffin for the financial industry in London. They could all just go elswhere?

    I'm more than happy to apply taxes to large money making corporations for the benefit of us all but I'm not really interested in seeing them just bugger off abroad to somewhere where they won't be taxed!

    We have over the years lost all manner of industry with large parts of it going to Europe and elswhere in the world. Bankers etc may be way down the popularity scales but they are enticed elsewhere because of this proposal, what else is there left in London?
  13. If this tax was retained for the UK coffers then I would support it but it is in reality a tax on [mainly] the UK to fund the profligacy
    of the EU monolithic apparatus in Brussells.
  14. Alsacien

    Alsacien LE Moderator

    Keep awake mate.
    He did not veto it, it was not even on the table to be discussed at that point.
    He vetoed something entirely different, the fiscal treaty which applies only to Eurozone countries and not the UK.
    In doing so he lost an opportunity to bring transaction tax to the table with a lot of support, and get it consigned to the bin for at least the medium term, probably forever.

    The Eurozone countries have just gone ahead with a fiscal compact anyway - lose.
    The stupid transaction tax is now very likely to go through in some form - lose.
    Credibility and UK input into a VAST amount of financial legislation going through the EU parliament is damaged - big lose.

    But the Tory hard right back bench'ers, and the UK Eurosceptic press got a win and were clapping each others backs for a couple of days.

    Judge for yourself what a great political victory that was.
  15. Alsacien

    Alsacien LE Moderator

    No its not. It is meant to help starving kids in Africa or something - the Pope said so......
    • Like Like x 1