So...when it's taken from the banks it's a tiny tax...that suddenly expands to hundreds of billions of pounds when it "helps" poor people.
Wow, that's magic.
It's like when Richard Pryor stole all those half-pennies from the paychecks, don't you see?
This is the sort of thing we can actually estimate (pretty roughly, I admit).
According to http://en.wikipedia.org/wiki/Derivatives_market#Netting average daily global turnover in derivatives was a trillion and a half USD in 2004, and two and a half trillion in 2007. Obviously that's before the markets melted down, so let's be conservative and say there's just a trillion dollars of business done a day in derivatives, worldwide.
"The UK remains the leading derivatives centres worldwide, with its share of turnover stable at 43% in 2007," so now we're looking at 430 billion a day.
$430,000,000,000 * 0.05% = $215,000,000 a day. Obviously people aren't trading in the UK a full 365 days a year; to keep things simple let's say 50 weeks times 5 days a week.
$215,000,000 * 250 = $53,750,000,000 annually. So with a conservative estimate I got from about thirty seconds of googling and then reducing 6-year-old numbers by a third, we're already at $50 bn, which I think is about Â£34-35 bn. That's not the fifty or a hundred or two hundred billion pounds the ad claims, but again, my numbers are hardly authoritative, and more to the point, yeah, Â£35 bn acutally is a pretty significant amount of money.
But I can see how one could get "magic" and "math" mixed up. They do have that same first syllable.
I think the criticism is about how 0.05% can't be a small, teeny-tiny amount if it results in 100 billion pounds of tax. It's not a very consistent argument. Besides, that trillion dollars a day is mostly imaginary money. Just look at AIG's credit default swaps -- they went bust because they made promises they assumed they wouldn't have to keep. Trying to put a tax on these trades would cause the universe to rip open as the imaginary money suddenly tries to become real money.
What's contradictory about a small percentage of a very, very large amount resulting in a large amount?
But really, if taxing these things even that little causes them to fall apart entirely, good riddance. Maybe if we hadn't been basing our economy on imaginary money in the first place, a lot more of us would have jobs right now.
No argument from me. Basing an economy on the whims of a bunch of narcissistic gambling cocaine addicts wasn't a great idea. But we're not going to get out of this shitty economy with some magic fairy-dust tax on said gamblers.
Money itself is imaginary.
As consensual hallucinations go, I'm hard pressed to think of one more people believe in.
Oh, that makes it OK, then.
You're allowed to not believe in it, but failure to play along with the consensus has material consequences. This may or may not suck, depending on how you go about it, but it's worth keeping in mind.
(Captcha: "crossing Pedant" - Is somebody at the NSA having fun today?)
The ability to command labour that it provides is not, which is the only part that really matters.
Yes, only in the same way and to the same extent as sovereignty and happiness. Being imaginary isn't so much of a disadvantage as people make it out to be.
Feel free to give give me all your money and spend the rest of your life imagining food.
The campaign website (robinhoodtax.org.uk) makes it clear that the "hundreds of billions of pounds per year" figure is for all financial trading worldwide, and that the figure for the UK alone is more in the tens of billions of pounds per year.
They aren't trying to just pass this in the UK - they want it passed in countries all over the world.
So does the OECD, who all nearly got clobbered by leverage on the threat of capital flight from Greece.
I think the video/campaign is very well executed. The part where it falls apart, as far as I'm concerned, is the conceit that the tax raised will go to the good causes espoused in the video. Because, you know, our government in the US, at least, is so good at spending tax dollars on good causes.
It's not that we should tax the banks, it's that we shouldn't be giving them government welfare in the first place. If we do support them through a rough spot, we should exact a controlling share instead of letting the debtor run, as it were, the asylum. Blah.
Sorry for all the, you know, interjections. It's, as it were, a bit late for me.
"Hello, casting? We need a City high-flyer. With lizard lips and a condescending smile. It would be great if he had awful lank long hair. You've got one? And his eyes don't point anywhere near the same direction? You don't say..."
That would be Bill Nighy, also seen in "Shaun of the Dead", "Love Actually", as Davy Jones in the second two Pirates Of The Carribean movies, Love Actually, and last night's Doctor Who. He's a bit of an institution in the UK :->
I'm not an expert, but from what I know, the video is disingenuous. The point of such taxes is to make certain kinds of high-frequency trading unprofitable. 0.025% per transaction is indeed nothing to a long-term value investor. If your strategy relies on millisecond advantages compounded over zillions of transactions -- it's fatal.
So this tax won't generate revenue as a simple fraction of the market -- it will eliminate a whole market entirely. But that's probably a good thing. Apparently high frequency trading is now 72% of Wall Street by volume, although many argue it contributes nothing to society other than instability. You can see a debate about a similar American proposal called the Wall Street Transaction Tax here at Zero Hedge -- look for Paul Krugman and you'll see the people who've lined up in support of the same concept. (Amusingly, the pro-tax side is taken by "Tyler Durden")
This video shouldn't be showing some daffy old upper-class twit. They should really be showing an evil computer h4x0r.
I guess they could just as easily have replaced the entire video with the Erlang Movie.
this is how I read it too. In sum, if a tax on an activity will generate hundreds of billions of dollars in aggregate, enacting such a tax will result in behavior modification rather than revenue generation.
Unlike cigarettes, these traders aren't physically addicted to this method of making money, so they'll just switch to something else.
And then they'll exploit it, creating an economic change that modifies consumer behavior, which will get labeled as 'not a bubble' until it's clear it was a bubble.
That isn't how I read it. Hopefully, the definition of a transaction can be broad enough that it covers any similar activity.
Especially in the USA, there is great reluctance to tell Wall Street how to conduct its business, for exactly the reason you mentioned. This is a fairly smart idea because it sidesteps that whole question.
At about 1:05, "they've lent to all these economies who can't possibly pay them back / Correct," is not correct.
All of the European economies could easily cover their debts by transitioning to more steeply progressive taxation, but the dictators in the Caribbean and other tax shelters are more than happy to shelter rich capital, allowing it to hold responsible governments who want to improve their citizens' quality of life from doing so.
Captcha: "class grumbles"
Thanks for pointing this out. You have the problem with the argument nailed exactly.
It is very nice of you to say that. :)
This guy is one of my favorite actors. Wonderful.
My wife's grandfather, Hugold Anderson, spent a good amount of his life campaigning for such taxation. "Taxing the Money Flow." He could see that the huge bulk of monetary transactions was no longer in the industrial sector, but in the financial one.
I like the idea of a robin hood tax, but I'm sure it will chill banking business in countries that implemented it.
Globalization and telecommunications allow banking to be done anywhere on the world. Hell, maybe they'll just go into space on a satellite. They have that much money.