I’m going to C&P the same sentence as Mr. Zambezi.
Like Mr. Z. said, it does not serve all. Taxation does not create capital; it merely redistributes it. If someone has less while others get more, how does this benefit all?
I think a better way for poorer nations to market themselves might be to solicit foreign investment by attracting new business concerns. Profitable business investment creates wealth; there’s something that could benefit all. Wealth is not a finite resource.
Besides, would you trust the United Nations to divvy up a pie this big? If not the U.N., who could you trust?
That it is unwise to be heedless ourselves while we are giving advice to others, I will show in a few lines.
– Phædrus –
Your responses are somewhat misguided.
I assume that those of you responding are not in the Top 0.25% of Americas richest individuals who would be impacted by the inability to trade huge sums of dollars(millions or more)which is creating the instability I describe.
Just because this is a tax, this does not mean that is to “steal from the rich”. The larger role of the tax is to create an monetary obstacle to those immoral enough to continually create instabilty in the worlds money markets, and profiting from it.
Yes, it’s true that wealth is not finite,but, when the desparity between the richest and poorest nations exists as it does, good business principal will produce reasonable rates of success.
Americans complain about monetary assistance to those countries in need, not realizing that the money many times is directed towards a cause that only countinues the enslavement of the smaller country’s national economy to the richest nations.
This tax empowers smaller nations by allowing their central banks to regulate their own exchange rates. If worldwide currency transaction dollars are lowered in volume, smaller nations are then would not need as much financial power to afford the needed rate changes.
This tax will never create a negative affect on those individuals wishing long-term investment in currency or otherwise but will minimize gambling on the economies of less fortunate nations.
I am surprised that you offer opposition because “you as Americans are already being asked of too much and shouldn’t have to pay more money just because you are rich.” Don’t you think that the money Americans pay through the Tobin tax(an effective means of financial assistance) would afford leverage in arguement to lessen other forms of financial aid?
The democratic force that Americans are vote the dog catcher in who gives out money for world assistance-what are you worried about, if giving money abroad is unpopular, they’ll get voted of out office. Oh, wait, not all Americans are right wing are they! Sorry!
Mr Zambezi, How does the proposal give other countries the right to tax US citizens? Any country is free to tax transactions undertaken in that country, just as non-American citizens pay sales tax in the USA. Think of it as a sales tax on currency exchanges.
The proposal is that each country would implement the tax independently so currency transactions undertaken by Americans in the US would be taxed by the US Government.
UncleBeer, US citizens constituting the largest single group of overseas travellers is not the same as them constitutingn the majority. I suspect that the bulk of the tax would be paid by non-Americans. Besides which, you need to look at international trade as well. If the US is a net exporter then that will reduce the proportion of the tax paid by US citizens.
TomH, I must say I agree with you, Americans probably would not pay the majority (greater than 50%) of this tax. It is likely, however, that more cash will be generated from American sources than any other. I spoke in haste and did not define my terms properly.
Mary:
Any redistribution of wealth, taking money from those who have more and giving it to those who have less without their consent, could certainly be defined as ‘stealing from the rich.’ I will show below how I feel the U.S., and other nations, would have little or no say in the levying of this tax.
A quote from the World Bank source above:
This sounds to me like we would be giving a World government organization the authority to tax anyone as they please, as long as it is universally applied. Now, the question is, who is controlling that presupposed World organization? Likely it would be formed of all nations in a majority rule format. So, a group of nations wanting tax dollars could form a coalition and thereby vote themselves rich, or richer.
And this brings up another question regarding the EC. Europe is moving towards a common currency, would this not exempt those member countries, since this eliminates certain form of currency exchange?
One more point that I feel is may be the biggest argument against this tax. Equitable distribution of the proceed of the Tobin tax is on of the major obstacles in implementing it. If you can’t distribute it, what is the point of collecting it? It seem to be a backward way to implement tax policy. Don’t you think it would be better to identify the end use of these monies and then design a tax system to meet to meet those goals? It looks like this is an effort to build a large pool of cash and then argue over the shares of the pie.
That it is unwise to be heedless ourselves while we are giving advice to others, I will show in a few lines.
– Phædrus –
You’re partly right. The countries in the euro-zone (i.e. the EU-15 minus Denmark, Greece, Sweden and the UK) now effectively have the same currency, so transactions between them do not involve foreign exchange. However, they would still be required to pay when trading outside that area.
Isn’t the same true for the states of the USA?
The purpose of collecting it is to discourage large-scale speculative currency movements of the kind that have done serious damage to the economies of a number of countries (including the UK) in recent years. To my mind, it doesn’t matter how it is spent (though I don’t see why it shouldn’t be spent on sustainable development projects).
Tom, I agree with UncleBeer here. What I have read of this tax suggests that a multinational body would control the tax dollars. I don’t necesarily disagree that it would limit short term currency speculation. I do doubt that the proceeeds of the tax would be used in a way that would benefit the US.
I do not think that it is unreasonable to fear that other nations wishing to take a share of the money would do everything in their power to get maximum funds. This part is certainly analagous to states fighting for federal dollars here in the US.
MAry Hart, not wanting to give [bold]more[\bold] money to other countries does not make me a right wing nut. If there is a specific goal of helping poorer countries, there are other ways to do it, which we already do. And they are supported by many people including some conservatives who wish to better the world.
I am curious, if giving these countries money enslaves them, how are we to solve this problem? Are you suggesting that we should not only give billions away, but also refrain from requiring any specific actions by those nations? I think this is an unwise policy given various leaders tendency to line their pockets with our aid dollars.
Forgive me if I’m showing ignorance here, but why do the tax proceeds need to be collected by a world agency at all? Why not funnel them right back into the currency that was exchanged?
Thus, if you’re trading American dollars for Euros, the U.S. gets the tax. If you trade those Euros for a third-world currency, the EU gets the tax. If you trade again, the the third-world country gets the tax.
Perhaps this is what is being proposed. I can’t see how it would put an unequal burden on any group (though I have to oppose on general Libertarian principles ;)). It would prevent investors from toying with the economies of developing countries, while not extorting welfare funds from legitimate transfers/investments.
Should there be an effort to limit currency speculation?
Should such an effort result in a tax that provides funds for supposedly beneficial purposes of a global nature?
Amazingly enough, if your answer to 1) is yes, it isn’t necessarily the case that your remedy should be a tax of any kind. Seems to me, that is precisely Libertarian’s first line of defense.
As to 2), I usually prefer to know just what my tax dollars are contributing to, and have my elected representatives have some control over the distribution of the dollars. However, in this day of global financial and aid efforts, we often see our tax money spent on global efforts over which we have little control (see the United Nations for the classic example - not meaning to get Libertarian all riled up with the mention! )
Mr Z, I don’t think I’m really disagreeing (as such) with UncleBeer here either. I was just pointing out that taxation can be a means of discouraging certain types of behaviour (e.g. smoking) as well as a means of raising revenue.
It can. I am not necesarily opposing the use of a tax to effect behavior. I haven’t moved completely over to the Libertarian side yet. Nor Am I saying that decreasing speculation is bad.
Instead, I dislike the idea of other countries getting their paws on our finances. Remember that we are talking about huge sums of money to the tune of $100 billion a day.
I get the feeling that there is an underlying argument here about whether we should be doing more to help poorer nations and whether it is ethical to tax the wealthy in order to accomplish this. I have this argument with my wife all the time. She thinks that giving money to the poor is the nice thing to do and I argue about the effects on the economy. Under the Meyers-Briggs system she is a feeling type and i am a thinking type. She is a nurse and I am a manager.
I doubt we can mend that rift.
One last point though since you brought up the cigarette tax: The more you tax something, the less it occurs. The less it occurs, the lower the tax revenue becomes. So they can’ ttax something to stopit occurring, and use pre-tax figures to calculate the post-tax revenue. This is exactly what happened with cigarettes.
Should there be an effort to limit currency speculation?
If so, should it be a tax?
If so, should the proceeds be used for supposedly beneficial purposes of a global nature?
My answer to any of these would be “no”. If the first two were enacted anyway, I would still vote “no” on the third in favor of funneling that money right back into the country whose currency was sold.
It’s not the giving; it’s the giving, frequently followed by the sudden taking-back, that’s the problem.
The speculative movement of currency around the globe is getting quite large, and its rapid movement into and out of the economy of a small nation can wreak havoc with the lives of the people in that country, including a lot of people who have absolutely no say in how that money flows.
The balance between global economic forces and national sovereignty is going to be one of the major battlegrounds of the next decade, IMO. In part, that’s what the WTO protests were about: in our globalized world, are people going to have some say in what goes on, or is it going to be solely money that talks? Seems to me like the Tobin tax is part of that larger discussion.
RTF, seems to me that money and power have always controlled who calls the shots. The difference that I see in the “modern Globalized World” is that there are far less powerful countries actually annexing the land and resources of smaller ones in the past 50 years.
America does assert its influence on other countries. But we are not always simply making people carry out our will. Often we are trying to maintain peace or protect the opressed. It may be ultimately for our own good, but what is wrong with acting in your own best interests?
Off on a tangent: During the WTO protests, what I heard was that the protesters complaining about a) Americanization of other countries b) loss of cultural diversity and c) the disappearance of the small farm.
I think we have to keep in mind that many of these countries are run by intelligent sophisticated rulers and peopled by intelligent beings. THey are making their own choices on personal and national levels. It is not necesarily all the US’s fault.
(I know, I know, I am flirting with a straw man argument here. But I did hear these themes from real people.)
An analysis on the site of the Federal Reserve Board of San Francisco is here.
If the facts given therein are accurate, the Tobin tax isn’t even mostly about “redistribution.” It’s about stability - it is proposed as a negative reinforcer to destabilizing practices which threaten the entire currency system, or, it is designed to reduce the amplitude/frequency of fluctuations so that the system does not spin out of control.
One might be against “Big Government,” but the redistribution aspects of current proposals appear to be after-the-fact. And while few people think that destabilizing the currencies of the world does anyone any good (except a few winning gamblers), the author submits that destabilization is, in fact, still an open question and further concludes:
That was in April, 1999.
Hm… So maybe, if the economics are truly so fuzzy, it really is the redistribution part of the equation that is so attractive to politicians…
This is more or less a “wisdom tax”. You are wise enough to have gained funds, wise enough to know how to invest them, and wise enough to profit.
Now the pathetic and less ingenious lot will tax you for your ability to suceed where they fail.
I, for one am sick of being used (as a citizen of the US and LARGE tax contributor) as the damn cash cow or welfare of the rest of the world. I say, “you want my money, then by God do something to earn it you lazy asses”. I had to work, and so should you. My country didnt come and bum money from yours to make me wealthy. Dont attempt to do the same.
Apparently, you did not read {:-Df’s link. Even if you dismiss this as an invalid argument, I have seen nothing here which makes a compelling statement in favor of it. Just an indistinct assertion that global capital speculation is destabilizing,and absolutely no evidence to support that sweeping hypothesis.
It appears to me, you had a preformed, or prejudical, opinion entering this little debate.
What disturbs me, generally, is the severely jingoistic flavor of so many of the posters who are opposing this tax. Is it not enough for you to make your reasoned statements as to why the tax in unjust? Can you not simply express an opinion about the need or lack thereof to control potentially destabilizing currency speculation. Is it not possible to simply discuss whether the mechanics of the Tobin Tax perform the function for which they have ostensibly been designed?
I see nothing in the proposal for the Tobin Tax that singles out the United States for particular punishment. I see nothing in the OP which argues that America deserves to be singled out as an egregious destabilizer of foreign economies. Why, therefore, is it necessary to react so defensively? Why is it necessary to lash out against perceived threats to sovreignity? Why is it necessary to impugn the work-ethic of the citizens of all non-industrialized nations?
Obviously this does not apply to all those who have posted here in opposition to the Tobin Tax. I trust the differences will be obvious to all.
The best lack all conviction
The worst are full of passionate intensity.
*
Thanks, Spiritus, I was racking my brain for a polite way of saying just that.
Nobody likes taxation (talk about stating the obvious!), but if there was ever an activity that deserved to be taxed, it would be currency speculation, IMHO. Nothing is produced, no real service is rendered to anyone and it can undermine the economy of a small nation (even, mr. NewtonsApple, a nation of people) in weeks or days.
Never mind the proceeds - use them for a worthy cause or funnel them back into the economy somehow - I guess the entire idea is to keep the proceeds as low as possible, right ?
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