Posted on 05/28/2002 1:58:37 PM PDT by GluteusMax
Maybe we need to chop down the old one like George Washington did...
Outrageous. But expected from the commies & socialists at the UN. The article sez other nations are jealous of us. Good!! Everything we've done is reproducable. Better get to it.! Their problem is they want to be like us without spending elbow grease. Tough shit!! Ya wanna be like us? Simple, bust yer ass like we do!Any idea when and where this conference was held?
US OUTTA UN! UN OUTTA US!
We already pay a global tax, it's just hidden deep inside our domestic tax burden, but god help the first official UN tax man that steps foot on my property demanding the UN's fair share. He'll collect my payment in lead and spent casings.
EBUCK
Because, like his father, he is a member of the One-World crowd. Do you really think he is a strong supporter of this country when he won't even protect this nation's borders?
god help the first official UN tax man that steps foot on my property demanding the UN's fair share. He'll collect my payment in lead and spent casings.
You won't ever see them coming. The Fed will be paying your share for you:
See Tobin Tax:
http://www.europarl.eu.int/workingpapers/econ/107_en.htm#chap3
III. The Operation of a Tobin Tax
The basic principles of the proposed Tobin Tax are relatively simple. A small ad valorem charge would be levied on every transaction involving the exchange of one currency for another. Professor Tobin's own original suggestion was for a rate of between 0.1% and 0.5%. Later he proposed as much as 1%; but most recently has suggested 0.2%. Other economists or politicians have proposed a variety of rates, some going as low as 0.01%.
A tax levied at this level would be of negligible importance for long-term portfolio or capital investment. A rate of 0.5%, for example, would add only 0.05% to the initial annualised exchange costs of a ten-year investment project.(20) By contrast, the tax would constitute an important extra charge on short-term transactions.
How the tax would work
Supposing, for example, that a speculator anticipated a rise in the Dollar against the Euro. He might enter a contract to sell, say, 1 million Euros for a week, receiving $1.1 million. If, over the week, the Dollar then rose to parity with the Euro, he would be able to sell the $1.1 for 1.1 million Euros, netting a 100,000 Euro (10%) profit.
No doubt this profit would incur some normal tax; but this would hardly constitute a deterrent to the speculation.
The Tobin Tax, however, would fall on the gross sums involved. At a rate of 0.5%, he would pay 5,000 Euros tax when purchasing Dollars, and another $5,500 (by then equal to 5,500 Euros) on resale: total tax 10,500 Euros, representing a tax of 10.5% on the realised profit.
Even when added to normal taxes payable, this would still hardly be a deterrent.
Supposing, however, that the anticipated currency movement did not take place, and that the $:i parity remained constant that week. The Tobin Tax would still be payable on the currency operations. In this case, the speculator would pay 5,000 Euros when buying Dollars, and another $5,100 at the end of the week: a charge of 1% on his capital. On a simple annualised basis (see page 18), this would amount to a tax rate of 52%.
Moreover, if the Euro actually appreciated against the Dollar - resulting in a loss on the speculation - the Tobin Tax (unlike any tax on profits) would still have to be paid.
Calculating equivalent annual tax rates A Tobin Tax on a one-day, one-week or one-month speculation, expressed as an annualised percentage rate, can be calculated in a number of ways.
The simplest - illustrated in Table 1 - is merely to assume that the same transaction is carried out every month, week or day of the year, and multiply the tax rate by two, for each leg of the buy/sell operation; and then by 12, 52 or 365 (Tobin's own original figures for one-day transactions, however, assumed only 240 trading days in the year ). A 1% Tobin Tax on a one-month operation would thus equal an annualised rate of 24% (1% x 2 x 12).
One alternative method would be to assume a given starting sum, which is then used for monthly, weekly or daily operations over a year, the sum diminishing on each turn by the tax previously levied. By this method a speculator starting with $100, who made monthly trades without profit or loss, would have just over $78.5 left at the end of the year, representing an annualised tax rate of just under 21.5%. Weekly transactions would leave just over $35, an annualised tax rate of 65%, (as opposed to 104% by the first method). After 365 one-day trades a fraction over 6.5 cents would still be left, a tax rate of 99.4%, (as opposed to the 730% under the first method).
The figures used by Eichengreen and Wyplosz in their 1993 Brookings Paper, however, are based on compound rates arrived at by the formula:
1 + R = 1 + (2T/100) P where R is the annualised rate of interest, T is the tax rate on a one-way transaction, and P is the number of transactions in a year. For a tax rate of 1%, this produces the following annualised rates:
monthly (12) 27% weekly (30) 181% daily (220) 7,980% The figures used were based 30 trading weeks in the year, and 220 trading days.
All these methods of course assume that the sums changed at the beginning and end of the operation are the same - i.e. that exchange rates have remained constant over the period.
This brief illustration highlights two important points.
- First, the effective annualised rate of tax on the capital sum involved would rise in inverse proportion to the turn-around period. An operation involving the purchase and resale of foreign exchange in a one-year period would incur a total tax charge of 1% (0.5% x 2); over a one-month period of 12%; over a one-week period of 52%; and over one day of 240% (see Table 1).
- Secondly, the tax would not necessarily make all speculation unprofitable; but it would raise the degree of risk involved. A higher movement in parities would be needed to make a given operation profitable; and the penalties for making a wrong bet would be increased.
Table 1: Simple annualised effective Tobin Tax rates for differing turn-around periods, assuming constant exchange rates (see also " Calculating equivalent annual tax rates"
Nominal Tax rate (%) Effective Tax rate (annual %) 1 day/ trading day* 1 week 1 month 3 months 1 year 10 years 0.01 7.3/4.8 1.04 0.24 0.08 0.02 0.002 0.05 36.5/24.0 5.2 1.2 0.4 0.1 0.01 0.1 73/48.0 10.4 2.4 0.8 0.2 0.02 0.15 109.5/72.0 15.6 3.6 1.2 0.3 0.03 0.2 148/96.0 20.8 4.8 1.6 0.4 0.04 0.25 182.5/120.0 26.0 6.0 2.0 0.5 0.05 0.5 365/240 52.0 12.0 4.0 1.0 0.1 1.0 730/480 104.0 24.0 8.0 2.0 0.2 * As formulated by Tobin, the annualised rate was calculated on the basis of what a round-trip would cost if carried out every day, on the basis of 240 trading days in the year.
EBUCK
Would you be so bold as to consider this plan as "taxation without representation"?
Yah got Congress Critters don'chya? What more could yah ask for? </sarcasm>
In short if you will notice this is the ultimate Value Added Tax, international in scope.
"A small ad valorem charge would be levied on every transaction"
A single rate Flat Tax, with no individual returns to file. So what's a little 1% tax?:
"For a tax rate of 1%, this produces the following annualised rates:
monthly (12) 27% weekly (30) 181% daily (220) 7,980% "
Keep smiling, and bend over.
A better question is how do we stop them before they get this thing rolling. We could always not require our investors to pay then let the UN try to force us to do it.
EBUCK
EBUCK
Wha-Wha-What? daily (220) 7,980% How's that?
Trade the same dollar, over and over again in currency transactions, with both sides paying every time, a penny here a penny there mounts up.
A better question is how do we stop them before they get this thing rolling. We could always not require our investors to pay then let the UN try to force us to do it.
Actually it is unlikely to be enacted in regards the UN as it requires a treaty to do so.
How do you stop something that the slip under the door with no warning, and under other names? All one can be is aware that such taxes are in the minds of politicians as alternatives to the current way of taxing.
It's equivalent could readily be enacted here as a national tax. Apparently such a tax, as it would regard commodities & currency trading, has been proposed in the Bush FYI 2003 Budget:
(PDF) http://www.theniba.com/futuresrep/NIBA.pdf
"National Introducing Brokers Association
55 West Monroe Street, Suite 3330
Chicago, Illinois 60603
www.theniba.com
Phone: 312.977.0598
Fax: 312.977.0377
Wednesday, February 27, 2002The Honorable George W. Bush
President of the United States
1600 Pennsylvania Avenue, NW Washington, DC 20502
RE: Proposed Tax on Futures TransactionsDear Mr. President:
The National Introducing Brokers Association (NIBA) strongly opposes the proposed transaction tax on U.S. exchange-traded futures contracts currently included in your proposed Fiscal Year 2003 Budget. The NIBA, an 11-year old trade organization of professional salespersons employed in the futures and options industry, joins with domestic exchanges, trade associations and self-regulatory organizations to voice our opposition. "
And as the Newman "par user's fee". Which was investigated and proposed for application in the United States Congress during Clinton adminstration as an alternative to the income tax:
http://www.madashellclub.com/frontpage.html
CRS REPORT FOR CONGRESS 88-103 E
By
William Jackson Specialist in Money and Banking and Jack Taylor specialist in Public Finance. Economic Division. January 5, 1998
A FINANCIAL TRANSACTIONS TAX?
THE PROPOSED FEDERAL PAR USER’S FEE
Proposal to cut the gigantic federal deficit have ranged far and wide. Among them is an innovative suggestion to levy a new Federal tax that would be broadly based: the proposed “par user’s fee.” As developed by tax lawyer John S. Newman, it would collect a small sum from all checks, direct deposits, and many other noncash transfers of funds through the banking system. The proposal is presented and analyzed below.
DESCRIPTION OF THE PROPOSAL
Revenue Base
Most economic activity in the United States is mirrored in financial transactions flowing through the banking system in the form of checks, drafts, electronic funds transfers. Each stage of the production and sale of a good or service in the economy generally requires numerous financial transactions (loans, other capital transfers, payments to suppliers of labor and intermediate products. Except for those handled by barter or cash, most transactions go through the U.S. bank clearing system. The sum of all these financial transactions is a very large number, many times larger than the gross national product. Mr. Newman has estimated it as $220 trillion. This sum represents money moving into and out of various financial accounts, and for banking purposes there is a record of each such movement. This is the base that Mr. Newman proposes to tax.
The tax would be levied at some very low rate—Mr. Newman suggests one-two-hundredth of 1 percent, or .00005—on each transfer out of an account with a financial institution. Inter-bank clearances and certain inter-account transfers would be exempt. Cash movements would likewise be exempt. Government transfers would be taxed on their deposit rather than their withdrawal (i.e., taxed to the recipients instead of the governments, as an exception to the general collection rule). The bank handling the account involved in the taxed transaction would \deduct the required tax from the account and remit if to the Federal Government at the same time that it deducted the principal amount from the account, making collection virtually automatic.
Is it a User Fee?
The proposed tax is called a “user fee” by its author because it is levied on a financial system created and maintained by the Federal Government. Mr. Newman suggests that it can be viewed as a fee for the services provided by the government. In clearing transactions and insuring deposits. Mr. Newman characterizes his fee as a “par” fee in return for the Government ensuring acceptance of chicks at 100 cents on the dollar (par), without recipients worrying whether the instrument would be redeemed a par by the issuing bank. This terminology stems from conditions in banking that existed many years ago, when bank liabilities issued in one location were subject to discounts if presented elsewhere, i.e., “nonpar” valuation for their presenters.
In most tax literature, “user fee” means a government charge related to the cost of providing the government services, analogous to a price in the private economy. The charges presently levied against financial institutions for Federal deposit insurance, wire transfers, and the like by their regulators are “user fees” in this sense. Mr. Newman’s proposed fee is in addition to the present fees and is intended to raise revenue for general Government use. Not to reimburse specific Government costs.
Indeed, to the extent that Federal legislation (beginning with the National Bank Act of 1863 and continuing through P.L. 96-221) has forced depository financial institutions to maintain cash reserve to among other things, facilitate the clearance of payment instruments, some would suggest they already more than compensate the Government for such services by submitting to a large implicit tax: lost earnings on the reserve. The “reserve tax: seems to be largely passed on to customers in the form of service charges and lowered or zero interest on checking accounts.
ARGUMENTS IN FAVOR
Mr. Newman estimates the base for his proposed “user fee”. The sum of the transactions clearing the banking system annually, as “at least $220 trillion.” (CRS is unable to verify this estimate independently.) Clearly the proposed tax base is very large a very large base can be combined with a very low, unobtrusive tax rate to produce large Government revenues without unduly upsetting taxpayers. Very low rates make evasion and avoidance unprofitable activities for most taxpayers, as was the case in the successful collection of Federal “stamp duties” on many financial transactions in the 1860s. The levy would not likely be large enough (at Mr. Newman’s suggested rate) to induce many payers to shift to barter or cash payments and the “underground economy.”
The tax would be a very easy levy to collect. The bank doing the final processing of the transaction would simply program its computer to deduct from the account the amount of tax as it deducts the amount transferred in the transaction. Remittance could them easily be made to the Treasury’s tax and loan accounts that are presently maintained within the commercial banking system. The financial community could be allowed to retain a small portion of the amounts collected, perhaps 1 percent, for serving as collection agent. The entire system could operate virtually automatically for most routine transactions. Most recipients would thus not feel the imposition of the “fee.” The payers would probably treat the small sums deducted as a nuisance only, of even lesser irritation to them than sales taxes.
The extensive records presently maintained in the banking system would be adequate to allow Government verification and audits of the tax collection system. Unlike most other new tax proposals, no elaborate new system of administering the tax would be required, at least for those transactions that stayed within the present bank clearance system. The proposed low rate of tax would make extensive efforts to avoid the tax uneconomical for smaller transactions, further simplifying the administration and enforcement problem
Changing rates of tax would be a fairly simple matter that could be accomplished quickly (at least as an administrative problem) by merely notifying the banks to change the rate in their computer programs. If quick rate changes for fiscal policy reasons were politically feasible in this country, this tax could certainly be designed to accomplish this purpose easily.
ARGUMENTS AGAINST
For taxpayers with large aggregate financial transactions (i.e., major corporations), even a low rate of tax can be profitably avoided if the cost of avoidance is relatively small. Since this tax would strike only transactions clearing through the U.S. banking system it could be avoided by dealing in cash, be barter arrangements, or by conducting the transaction through foreign banking systems. Extensive efforts to prevent this type of avoidance could lead to far greater administrative costs; but the possibilities for avoiding the tax could reduce considerably Mr. Newman’s estimated tax base of $220 trillion.
Another possibility for avoiding the tax, and thus reducing the tax base, would be vertical integration of operations. Payments to outside suppliers go through the banking system and thus would incur the tax; the same item supplied from within the corporation could avoid the tax. This is a common effect of European-style “turnover” taxes, and other taxes like this one, can be decreased by decreasing the number of transactions involved in an operation.
This tax may be overstated in another sense, also. The base is so very large because it counts the same dollars over an over again. Gross national product (GNP), the final market value of all economic transactions, is around $4.5 trillion; financial transactions totaling $220 trillion are the sum of many turnovers of the dollars making up GNP, as well as many movements of capital and financial paper that do not add to the GNP as any other $11billion tax would be, regardless of the stated rate. The $11 billion is almost exactly one-quarter of one percent of 1987 GNP. In absolute dollars, it is essentially the same amount as the revenue shown in the 1987 budget from the Federal excise taxes on tobacco and alcohol. The continuing absorption of small sums from the circular flow of dollars reflecting ongoing transactions becomes clearer in chart 1 (on the next page—the spatial relationship of the 50-cent deduction from the $100 circle is clearly not to scale).
The fact that this proposal would tax the same dollars again and again as they move through the economy makes it difficult to determine the final incidence of the tax. The tax represents an increase in the cost of doing business for business taxpayer, and it may be assume that the tax, like other costs, would be passed forward in price increases wherever possible. Since the tax is on financial rather than real transactions, however, its impact on the final price of any good or service depends on the number of financial transactions it takes to make each purchase at each stage of production (e.g., a check to purchase an intermediate good from a supplier, a check from the supplier to the earlier stage input supplier, checks for loans to cover each item used, and so on for each stage of production and final sale of each product). If the accumulated tax on all such transactions were ultimately passed through to final consumers, the tax would be the equivalent of a sales tax on all goods and services levied at a rate (expressed as a fraction of final sales price) considerably in excess of the stated rate pf .00005. In the case of the stamp taxes of the 1960s mentioned above, for example, final product prices rose be many times the totals off the par-item intermediate-stage taxes.
Politically, the relatively “hidden” nature of the tax and the ease with which its rates could be raised would not be regarded as positive points by everyone. Some prefer to have taxes that are not easily ignored as a means of imposing fiscal discipline on Government activities.
SUMMARY
The proposal has appealing features. Its very low rate, making the tax virtually unnoticeable by most taxpayers, combined with the very large base many times GNP, could possibly produce large amounts of revenue fairly painlessly. It would rely on a well-established system of electronic records and thus could be an easy tax to collect.
The proposal has disadvantages in that : (1) transactions could be structured so as to escape the tax (cash, trade credits, asset swaps) on very large transactions; and (2) the tax would increase business costs and thus could be presumed to increase the price of goods and services throughout the economy. The rate of price increase, however, would depend on the financial transactions involved in the production and sale of the products, since each separate financial transaction increases the total tax bill. This “cascading” effect is ultimately passed through each stage of production as price increases, as the similarity cascading turnover taxes often used in Europe are, the tax would ultimately be borne primarily by consumers.
Maybe next election, more Conservatives will vote Conservative, even if the Conservative candidate is not a Republican. After things like this, the USA Patriot Act, Campaign Finance Reform and other liberal and/or one-world actions, I don't know how those Conservatives who voted for him can sleep at night. Things may not be going well, but at least I don't have to live with the fact that I helped Dubya get elected.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.