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The Robin Hood Tax, A Tiny Tax On Banks  
User currently offlineTheCommodore From Australia, joined Dec 2007, 2890 posts, RR: 8
Posted (4 years 8 months 2 weeks 3 days 13 hours ago) and read 1364 times:

A friend of mine in the Uk just sent this to me.

Apparently its being considered and may well be adopted as a new tax on banks.

What are your thoughts ?

Do you think there is room for such a tax in your country ?

http://robinhoodtax.org.uk/


Flown 905,468 kms or 2.356 times to the moon, 1296 hrs, Longest flight 10,524 kms
11 replies: All unread, jump to last
 
User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 1, posted (4 years 8 months 2 weeks 3 days 13 hours ago) and read 1348 times:

Has a nice populist ring to it.

Of course, a tax on the sale of securities wouldn't affect just banks, and the cost would certainly be handed down to consumers, with both higher fees and more restricted lending. But hey, it raises more money!

And it's not new, either:

http://thehill.com/homenews/house/69...ms-push-wall-street-150b-stock-tax



Why grab a Heine when you can grab a Busch?
User currently offlineMoltenRock From , joined Dec 1969, posts, RR:
Reply 2, posted (4 years 8 months 2 weeks 3 days 12 hours ago) and read 1332 times:

Quoting newark777 (Reply 1):
Has a nice populist ring to it.

Of course, a tax on the sale of securities wouldn't affect just banks, and the cost would certainly be handed down to consumers, with both higher fees and more restricted lending. But hey, it raises more money!

To anyone who understands the issue, what caused the problem in the first place, and why a bank might choose to continue on a path it has, a populist plan is rather silly as it won't cure the core problem.

Look, the US removed the restrictions of Glass Stegall back in the late nineties because of bank's prodding it was the right thing to do, and the banking business had changed dramatically since it was passed after the Act to prevent another Great Depression. As anyone with common sense would see, it was a bad idea, but the govt gave the banks the 2 feet of rope it craved. Guess what? It hung itself with it. I'm sorry, but you bust the banks back up again because what happened this time, was what happened last time.

Why punish people for doing exactly what they are paid to do? Set strict regulations on the lines of business each are allowed to be in, and then let them figure out what niche they want to serve, how to structure their business, etc.


User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 3, posted (4 years 8 months 2 weeks 3 days 12 hours ago) and read 1324 times:

Quoting MoltenRock (Reply 3):

I agree with enacting more regulations (especially stricter capital requirements, the lack thereof being the biggest cause of the current financial crash), but that's a whole different topic.



Why grab a Heine when you can grab a Busch?
User currently offlinegeekydude From China, joined Apr 2004, 401 posts, RR: 2
Reply 4, posted (4 years 8 months 2 weeks 3 days 12 hours ago) and read 1312 times:

Quoting MoltenRock (Reply 3):
To anyone who understands the issue, what caused the problem in the first place, and why a bank might choose to continue on a path it has, a populist plan is rather silly as it won't cure the core problem.

That's exactly the point. Slapping on a such tax does not give any incentive to a banker for him to change behavior. Rather regulators should focus on designing smart regulations targetting the fraudulent practices that led to the melt down.



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User currently offlineTheCommodore From Australia, joined Dec 2007, 2890 posts, RR: 8
Reply 5, posted (4 years 8 months 2 weeks 3 days 10 hours ago) and read 1296 times:

Quoting newark777 (Reply 3):
I agree with enacting more regulations (especially stricter capital requirements, the lack thereof being the biggest cause of the current financial
crash), but that's a whole different topic.

Yes I agree with you.

But this tax appears to be quite small compared to other taxes on financial services, especially in Australia. I don't think its such a bad idea considering the millions perhaps billions of transactions carried out each and every day by banks all over the world through intertrading, they probably wouldn't even notice.



Flown 905,468 kms or 2.356 times to the moon, 1296 hrs, Longest flight 10,524 kms
User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 6, posted (4 years 8 months 2 weeks 3 days 10 hours ago) and read 1290 times:

Quoting TheCommodore (Reply 5):
But this tax appears to be quite small compared to other taxes on financial services, especially in Australia. I don't think its such a bad idea considering the millions perhaps billions of transactions carried out each and every day by banks all over the world through intertrading, they probably wouldn't even notice.

With the amount of trading that goes on, it would put a serious crimp on the associated firms, and hurt overall liquidity.

And I'm sure everyday investors won't like losing money in their mutual funds, yet still receive tax statements for transactions made in the fund.



Why grab a Heine when you can grab a Busch?
User currently offlineTheCommodore From Australia, joined Dec 2007, 2890 posts, RR: 8
Reply 7, posted (4 years 8 months 2 weeks 3 days 10 hours ago) and read 1284 times:

Quoting newark777 (Reply 6):
With the amount of trading that goes on, it would put a serious crimp on the associated firms

Yes but this tax is just concerning the banks as I understand it, no one else, and they are only charged on bank transactions. Nothing to to with other financial institutions, like broking house's or mutual mangers.

I'm no expert, maybe I'm wrong ?



Flown 905,468 kms or 2.356 times to the moon, 1296 hrs, Longest flight 10,524 kms
User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 8, posted (4 years 8 months 2 weeks 3 days 10 hours ago) and read 1281 times:

Quoting TheCommodore (Reply 7):
Yes but this tax is just concerning the banks as I understand it, no one else, and they are only charged on bank transactions. Nothing to to with other financial institutions, like broking house's or mutual mangers.

I'm no expert, maybe I'm wrong ?

Sorry, I was referring to the legislation that was proposed in the US, since I can't find any concrete info on what transactions this movement is proposing being taxed, just "transactions between banks," or language to that effect.

To me, it just seems as though the people behind this "Robin Hood Tax" are taking advantage of populist emotion to raise money for their individual causes. Either way, the cost will be passed down to the bank customers, not eaten by the bank themselves.



Why grab a Heine when you can grab a Busch?
User currently offlinePyrex From Portugal, joined Aug 2005, 4025 posts, RR: 28
Reply 9, posted (4 years 8 months 2 weeks 3 days 8 hours ago) and read 1250 times:

Quoting MoltenRock (Reply 2):
Look, the US removed the restrictions of Glass Stegall back in the late nineties because of bank's prodding it was the right thing to do, and the banking business had changed dramatically since it was passed after the Act to prevent another Great Depression. As anyone with common sense would see, it was a bad idea, but the govt gave the banks the 2 feet of rope it craved. Guess what? It hung itself with it. I'm sorry, but you bust the banks back up again because what happened this time, was what happened last time.

Oh, no, not this crap again... how many times do I have to explain this to you? Removing Glass Steagall in the late 1900s had absolutely nothing to do with the recession (which was caused by mortgages - the simplest banking product there is, and who have been securitized since the mid-1980s or even before that by both banks and brokerages) and in fact, one could argue that with Glass Steagall still in place the recession would have been much, much worse (as in, J.P Morgan would not have been allowed to buy Bear Stearns, and the Fed could not have held a gun to the head of Bank of America to force it to buy Merrill Lynch).

But then again, I am sure you are of the school of though that all regulation is good regulation so I don't even know why I bother. (how are those 10 different bank regulators working out for you, by the way?).



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User currently offlineMoltenRock From , joined Dec 1969, posts, RR:
Reply 10, posted (4 years 8 months 2 weeks 3 days 7 hours ago) and read 1241 times:

Quoting Pyrex (Reply 9):
Oh, no, not this crap again... how many times do I have to explain this to you? Removing Glass Steagall in the late 1900s had absolutely nothing to do with the recession (which was caused by mortgages - the simplest banking product there is, and who have been securitized since the mid-1980s or even before that by both banks and brokerages) and in fact, one could argue that with Glass Steagall still in place the recession would have been much, much worse (as in, J.P Morgan would not have been allowed to buy Bear Stearns, and the Fed could not have held a gun to the head of Bank of America to force it to buy Merrill Lynch).

But then again, I am sure you are of the school of though that all regulation is good regulation so I don't even know why I bother. (how are those 10 different bank regulators working out for you, by the way?).

Oh, stop it. Where did I ever say it was the prime cause or only cause of the Great Near Depression, thank you very much? Ask any of the major bank CEOs what was going on in the huge derivatives depts they had and they couldn't explain it. CEOs with MBA degrees mind you.

The mortgage laws aside, since this thread is not, nor ever has been about "mortgages", we are talking about banking laws. When you have a bank the size of Wells Fargo or Bank of America, you have an entity larger than many countries entire GDP, and larger than hundreds of central banks around the world. Yes, I have an MBA and I will readily admit I have no business being a regulator of credit default swaps. You're asking a govt dept. to manage a dozen or more core monetary/economic expertise to regulate a multi-trillion $$$ entity. I'm sorry but if you're top of your class at any of the major business schools the last thing you'll consider is a govt regulator position. Why take a job where you only make $150,000 to $200,000 when you can join private enterprise and make two or three times that, easily (plus bonuses)? How can you expect a government regulator to know all of these core monetary sciences?

But if you really want to get technical, yes the Bush administration forced a number of banks to take money they claimed they didn't need. It was a move to calm the markets, so that a bank run wouldn't start based on who took money and who didn't. It was a clumsy policy to be sure, but frankly there's not a whole lot of sympathy out there for these banks who have screwed the Average Joe for the past 10 years or more. (Not my words, or my belief but that is the public perception. Perception is reality. The banks did a shitty job of managing it.) But the banks have always known they are subject to the regulations, rules, and limits the various agencies of the US & state govts put on it. So cry me a river that they are having their wings clipped. That dog don't hunt. It's going to be pretty hard for you to say someone getting their pay whacked from $850,000 to $600,000 as an example, is going to get much sympathy among average, hard-working, Americans.


User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 11, posted (4 years 8 months 2 weeks 3 days 2 hours ago) and read 1217 times:

Quoting MoltenRock (Reply 10):
It was a move to calm the markets, so that a bank run wouldn't start based on who took money and who didn't.

Which is why most of this "banks that are being supported by taxpayer money" talk is baloney.



Why grab a Heine when you can grab a Busch?
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