You seek to enlist government agents to initiate force against certain persons on your behalf
Clearly, we are both doing this. That’s what taxes are all about. This comment does not distinguish your pov from mine.
Taxation is necessary to gain revenue but honest principle, integrity, honoring and protecting individual life-and-property rights are primary.
Agree.
All those [words] in bold, [above], are violated when taxes are imposed greater on one group than another.
Disagree both to the correctness of this statement and to the implication that my preferred tax structure seeks to impose greater taxes on one group than another whereas yours does not.
[Your pov] sacrifices a portion of the individual for the supposed betterment of the group. It is collectivist groupthink.
Completely wrong. [Note: The rest of your diatribe is boilerplate hyperbole much of which I agree with if I ignore your hyperbolic delivery of it.]
Underlying your position are the following two assumptions:
1. a flat tax on the base of retail sales and a zero tax on all other economic activity is appropriate, but a flat tax on retail sales and a much smaller, miniscule tax on financial transactions unfairly disadvantages the latter group.
2. the only way to measure the appropriateness of the tax burden is % of income or % of retail consumption. If either of these percents is flat, no further inquiry is necessary; if they are not, no free market justification is possible.
Before continuing, are you aware that I am challenging the above two assumptions? Do you want to understand why or would you rather manufacture your own explanation so that you can stick your tounge out, put your thumbs in your ears, wiggle your fingers while labeling my challenge “collectivist groupthink mentality?”
Deuce: Because I don't favor changing the distribution of the tax burden from what it is now to one which increases it for the middle class---the class to which, I, an individual belong? 908
Either you want to keep the tax burden the same as it is now or put the tax burden on the low income and below poverty level income people.
Disagree both to the correctness of this statement and to the implication that my preferred tax structure seeks to impose greater taxes on one group than another whereas yours does not.
You said in your last post (908) you don't want to shift the tax burden from where it is now. As it is now it violates honest principle, integrity, honoring and protecting individual life-and-property rights. That you fail to see that is your problem -- not mine. Therefore I have no desire or need to continue this discussion. You may have the last word.
1. a flat tax on the base of retail sales and a zero tax on all other economic activity is appropriate, but a flat tax on retail sales and a much smaller, miniscule tax on financial transactions unfairly disadvantages the latter group.
A minsicule tax? The Tobin tax is a compounding tax roundrobin transactions, most of which yield no profit to either side of the transaction, but the are mere movement of cash from one account to another through the processes involved in of payment of debts and conduct of commerce between individuals and nations.
At 0.5% the compounding Tobin tax places $360 Trillion dollar burden on the financial sector of the World economy.
That Tobin Tax is indeed a very severe burden on a minority group of individuals engaging in the cash transactions necessary for the conduct of modern commerce.
http://www.europarl.eu.int/workingpapers/econ/107_en.htm#chap3
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.
The main purpose of the Tobin Tax is to control world economic activity(i.e. manage economies socialist style) from the proponents of the Tobin Tax:
http://www.europarl.eu.int/workingpapers/econ/107_en.htm#intro
Introduction I.
The first formal proposal for a tax on spot transactions involving the conversion of one currency into another was made by the US Nobel prize-winning economist, Professor James Tobin, in a lecture at Princeton University in 1972(1). He further developed the concept in his Presidential Address to the Eastern Economic Association in 1978, which was subsequently published in the Eastern Economic Journal(2).
Since then, the introduction of what has become known as a "Tobin Tax" has at regular intervals figured on the political agenda. The idea of "throwing some sand in the well-greased wheels of international finance" has had a special appeal at times of turbulence on world financial markets.
A Tobin Tax would be levied on foreign exchange transactions at a uniform, but low, ad valorem rate. Prof. Tobin himself suggested rates of 0.2%, 0.5% and 1%. Current French Prime Minister Lionel Jospin suggested 0.1% in 1995, " qui ne pénaliserait pas les investissements à dix ans mais les placements à dix jours"(3).
Were the transaction the consequence of long-term investment, indeed, such a levy would constitute a negligible extra cost to the total project. However, were the transaction to be a short-term speculation, involving movements in and out of a particular currency in a matter of weeks, days or hours, it could constitute a significant charge, and "increase the risk of foreign exchange loss"(4).
A Tobin Tax would serve a number of objectives:
- In so far as short-term, speculative transactions have a destabilising effect on currency markets (see next section), a fall in the volume of such transactions would reduce exchange-rate volatility. This, in turn, would improve the financial climate for "real" trade in goods and services.
- The tax would also serve to put a "fiscal buffer" between economies. A government whose exchange rate was under threat would need to raise short-term interest rates by less in order to defend a particular parity than would otherwise be the case. The potentially damaging effect on growth and employment would consequently be reduced.
- The tax would also, of course, raise revenue - perhaps some $360,000,000,000 a year world-wide, based on a 0.5% rate and $1 trillion foreign exchange market turnover during each of 240 trading days(5). Prof. Tobin's suggestion was that this should be paid into a central fund controlled by the IMF or the World Bank, so providing considerable extra resources for international stability programmes.
The levying of a Tobin Tax would also, however, present some daunting problems.
- There would need to be agreement on its application in every financial centre in the world - otherwise foreign exchange markets would move to "tax-free" jurisdictions. The problems of introducing a withholding tax on interest even within the EU alone do not augur well for the chances of such an international agreement.
- Levying the tax on an estimated $1 to 1.5 trillion turnover a day would be a massive administrative task, even if the effect of the tax was to reduce the total. Turnover in the foreign exchanges in a month is roughly equivalent to the value of world-wide trade in a year.
- There would also be considerable problems in defining:
- the tax base (would market interventions by central banks, or transaction between other governmental or international bodies, be covered? Would it also cover "beneficial" trading by market makers, or financial intermediaries providing stabilising liquidity? ); and
- taxable transactions (a tax on foreign currency transactions alone could be avoided through the derivatives markets).
- It is not even certain that a Tobin Tax would increase exchange-rate stability. When a currency was under attack by speculators, the cost of the tax would almost certainly already have been discounted, possibly resulting in greater, rather than lower, volatility. A Tobin Tax would have had little effect in preventing the fall of the Mexican peso in early 1995, for example, nor that of the S.E. Asian currencies in 1997.
Discussions in the European Parliament
The European Parliament's Subcommittee on Monetary Affairs last held in-depth discussions on the Tobin Tax and related issues on 6 October, 1993. A public hearing on International Monetary Cooperation within the Framework of the Easing of Restrictions on Capital Markets considered, among other contributions, seven papers from outside experts, together with a paper from Sub-Committee Chairman, Christa Randzio-Plath. These were subsequently published by the Directorate-General for Research (Economic Series W-12/rev., January 1994).
Some of these papers made reference to the Tobin Tax proposals, though most only briefly. As in the case of the paper presented by the Chair, a tax was seen as one of two possible mechanisms to limit speculation, the other being to require purchasers of foreign currency against domestic currency to place a certain percentage of those purchases in the form of non-interest-bearing deposits with the appropriate central bank. Unlike the Tobin Tax, there has been some practical experience of this latter mechanism: it was, for example, used by the Spanish Government during the September 1992 EMS crisis.
The experts were heavily against either a tax or special deposits, which were seen as a form of re-introduced control on capital movements. This, as the executive summary noted,
"would penalize the development of the financial markets, which represented a significant share of the most highly developed European states' GDP. This would also represent a step backwards in terms of the achievement of the Single Market..."
Some of the spontaneous contributions during the hearing, however, were less hostile to limited restrictions on capital movements. A number considered that solutions might be sought to the practical problems of introducing a Tobin Tax. The broad conclusions of the hearing were that much stronger international cooperation in the economic and monetary field was required:
"The stability of the world economy could be improved by international cooperation, specifically by the creation of a global monetary system, a global supervision framework, a global taxation system and a global trade rationalisation agreement"(6).
In such a context, it is indeed possible that a Tobin Tax would become feasible.