A financial transaction tax appears to be a particularly cowardly way of dealing with an ill-defined problem.

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Yep, They want to hide the true cost to the individual.

The problem is well defined.

1. The government has run up 7,000 bn of debts. Your share, 225,000 pounds (9,000 a year in interest)

2. They are still spending hand over fist, far more than they raise in taxes.

3. Raising tax rates will result in lower tax revenues. We are on the wrong side of the Laffer curve.

Anonymous 2 needed this 'Off the Record'

The one pound when you withdraw money from an ATM is extremely misleading and belies a superficial knowledge of the subject.

For those who are commenting with little idea of what has been proposed, a tax of 0.05% has been proposed on stocks, bonds, foreign currency and derivatives. To make sure you read that right, it represents one twentieth of one percent.

So if you were to be charged £1 at the ATM, you would have to be withdrawing £2000. Or when you withdraw £20, it costs you 1p.


I take the point that the ATM example was used to argue the public will shoulder all the burden but I'm not convinced by this argument either. High frequency trading (every few seconds) and huge increases in derivatives has pushed the volume of financial transactions to more than 70 times the size of the world economy, not salvageable when we run into problems down the line. A 0.05% tax would make many of these socially useless transactions unprofitable (a lot of currency speculation on tiny profit margins would go), hitting hedge funds much more than insurance and pension funds.

The public will end up paying more but not as damaging as is being made out and this would far outweigh the benefits of reduced volatility and speculation. Liquidity would of course drop but do we really need trading at 70 times the global economy to meet the liquidity requirements of the real economy?

Before 0.5% stamp duty on stocks was introduced, the same arguments were used. Miraculously, financial Armageddon didn't occur and we are still all here to tell the tale.

Robbin' Hood tax on share dealing ?
We already have one , it's called Stamp Duty .

A good tax is a simple tax that is widely understood and hard to avoid or evade either locally or internationally. Variable tax rates on differing activities create opportunities for the 'gaps' between such taxes to be exploited. Therefore, there is one simple solution and that is one simple tax, levived at a mathematically simple rate of 10%, on everything.

So 20 bn comes out of people's pockets.

You've got Labour complaining that cuts in spending of a few million is a disaster because its a reduction in spending.

Here you're proposing taking 20 bn out of people's spending.