The Tobin tax could end up making almost as much trouble for David Cameron as the tea tax made for Lord North.
And it could also push the UK into a new and healthier relationship with the Anglosphere instead of EUrabia as the American Revolution led to the greater second empire.
WRM, the club med issues as well as proposed Tobin tax are directly connected financially to Europe’s sovereign debt crisis; and unless more involvement (euros, leverage, backing, etc.) by ECB nothing proposed will stem financial difficulties straining EU (reflected in global market losses last two days).
The Tobin Tax would be a large obstacle to Germany and France creating a major center of finance inside the core 17. Without a tobin tax and with it’s proximity to Europe London could maintain its standing. It could be the place where Europe’s rich and it’s large corporations go to invest in ways forbidden or highly taxed and regulated on the continent. I also believe that Europeans do not share a sufficiently common vision of Europe to make a highly integrated core 17 work. A minor recent example is Germany’s decision to phase out all nuclear power while France gets 70% of it’s base load from nuclear. Language and cultural differences will need literally generations to soften before a true political union is feasible.
Hmmmm, as I recall, Greece instituted a tax on financial transactions back when it was trying to meet the Maastricht criteria. Only problem was that there weren’t that many transactions to make the tax a worthwhile revenue tool. So, the government directed the national banks to offer to the general public low-interest loans specifically for playing the stock market. Everybody and his brother’s grandmother poured into the market, putting up everything possible as collateral. It was a wild ride which ended in a severe crash, people were ruined (except the insiders and politicians who got out first), banks were stuck with bad loans and dodgy collateral – but hey, the government got to collect on the way down, too. And Greece made it into the EU.
Why on God’s green earth aren’t we in America talking about replacing capital gains and corporate income taxes with a 1.5-3% transaction tax and a low gross receipts tax.
It’s stable, broad, fair, and flat. It is easily collected, and avoids the idiotic complexity of taxing capital gains and derivative transactions.
I’ve heard a few weak arguments like “the financial institutions wouldn’t survive because they engage in so many different kinds of transactions, all with huge volume.”
This makes no sense. Whatever the increased cost, it would be dwarfed by dropping cap gains and the corporate income tax.
The Archbishop of Canterbury has decided, with impeccable timing, to lob a stick of dynamite in the fishing pond.
This is most likely a response to the recent arguments about the Occupy London group and their camp at St. Paul’s.
I wonder how much consideration Dr. Williams has given to the implications of aligning himself with an EU initiative against the Conservative coalition; and the impact on the LibDems torn between pro-EU inclinations, their position in the coalition, and the impact of a EU Tobin Tax on the UK.
Not to mention the modern variant on an old saying: “The Liberal Democrats are the Church of England at prayer.”
Plus the Labour party calculating whether or not the current unpopularity of bankers trumps that of the EU among voters.
The Archbishop may find this pond is the home of numerous bad tempered alligators.
In addition a Tobin Tax is, given the inventive minds of City financial wizards, not too difficult to avoid and unlikely to either raise money or stabilise markets.
See Tim Hanford’s ananalysis http://timharford.com/2011/10/a-%e2%80%98robin-hood%e2%80%99-tax-is-no-way-to-redistribute/
I think Tony Blair recognized when he was Prime Minister that Great Britain could never successfully integrate with a Union made up of nations on “the continent” which is why he worked so hard to cozy up to George W. Bush at the beginning of the Iraq War. Blair realized that if Britain was to continue to fight above it’s weight class it would ultimately need to do this in partnership with the United States not Europe.
Blair could not have known that Americans would elect a President from out of no where who felt no affinity for the special relationship between Britain and the United States because he was steeped in an anti-colonial ideology that blamed the British Empire for most of the geopolitical difficulties faced by the contemporary world.
It is ironic that the United States has historically favored European integration as a way to contain Germany but in it’s new version, Germany is likely to emerge as the nation that calls most of the shots in Europe.
As the old saying goes, be careful what you wish for because it might actually come true.