Robin Hood Tax

10 Feb 2010

Not sure if anyone else saw the piece on the BBC Breakfast news about the proposals being made for a 'Robin Hood Tax'.
The basic premise is, as I understood it, that banks and financial trading institutions would pay a levy on their currency transactions. The idea is that this money would then go to fight poverty.

Richard Curtis and Bill Nighy were on the news programme talking about it and, in my opinion, they made a compelling case. Unfortunately it would need to be a global thing for it to be successful so that potentially is a stumbling block. Seems to make sense though.
What do you think?

10 Feb 2010

On the face of it, it seems harmless enough but I think it would be disastrous for ex-pats who have to convert from whatever currency they have their pensions in to the currency of where they now live.
God knows, the £/€ rate is abysmal enough just now and the bankers will surely pass the charge on to customers.
For those no affected by the need for currency transactions (other than when going on holiday of course), I guess they might think it will be a good thing.
Whenever have you known a banker to accept a charge and not pass it on to the eventual consumer?

10 Feb 2010

Quote by GnV
On the face of it, it seems harmless enough but I think it would be disastrous for ex-pats who have to convert from whatever currency they have their pensions in to the currency of where they now live.
God knows, the £/€ rate is abysmal enough just now and the bankers will surely pass the charge on to customers.
For those no affected by the need for currency transactions (other than when going on holiday of course), I guess they might think it will be a good thing.
Whenever have you known a banker to accept a charge and not pass it on to the eventual consumer?

It is only bank-to-bank transactions. It would not affect personal currency transactions or money changing - that was explained in the interview.

10 Feb 2010

Quote by noladreams
On the face of it, it seems harmless enough but I think it would be disastrous for ex-pats who have to convert from whatever currency they have their pensions in to the currency of where they now live.
God knows, the £/€ rate is abysmal enough just now and the bankers will surely pass the charge on to customers.
For those no affected by the need for currency transactions (other than when going on holiday of course), I guess they might think it will be a good thing.
Whenever have you known a banker to accept a charge and not pass it on to the eventual consumer?

It is only bank-to-bank transactions. It would not affect personal currency transactions or money changing - that was explained in the interview.
As I said in my posting.. whenever have you known a banker to accept a charge he cannot pass on to the eventual consumer. As I understand it, the currency market works on spread - the difference in price between what they buy at and what they sell at. That's their margin (profit). It is inconceivable that the bank will absorb this cost. It is hidden from view and the net effect will be that the consumer will pay.
The last time we all listened to bankers and believed what they said was the beginning of the biggest world banking crisis ever.
Would you trust a banker to tell you the truth on this? I certainly wouldn't!

10 Feb 2010

Quote by noladreams
Not sure if anyone else saw the piece on the BBC Breakfast news about the proposals being made for a 'Robin Hood Tax'.
The basic premise is, as I understood it, that banks and financial trading institutions would pay a levy on their currency transactions. The idea is that this money would then go to fight poverty.

Richard Curtis and Bill Nighy were on the news programme talking about it and, in my opinion, they made a compelling case. Unfortunately it would need to be a global thing for it to be successful so that potentially is a stumbling block. Seems to make sense though.
What do you think?

We're going to see more innovative ideas on tax in the next fifteen years than in the last 150.
The Tobin tax described above is one.
Carbon taxation will be the second.
The problem is that carbon taxation will be a de facto import tariff. That's gonna cause all sorts of problems with developing economies.
My guess would be a natural resource tax would be somewhere down the line as well to discourage energy consumption. Oh, and a mileage tax of some kind as well...

11 Feb 2010

I think there should be a tax on politicians.
£1,000 per spoken word plus climate change levy (to cover all that hot air) plus VAT on the total should just about do it...

11 Feb 2010

Quote by GnV
I think there should be a tax on politicians.
£1,000 per spoken word plus climate change levy (to cover all that hot air) plus VAT on the total should just about do it...

A couple of radio appearances by Boris Johnson plus Charlie hicccups Kennedy on HIGNFY and we could bail out the Greeks...

11 Feb 2010

there will not be a tax on banks, pure theatre for public consumption.

11 Feb 2010

Quote by gulsonroad30664
there will not be a tax on banks, pure theatre for public consumption.

Exactly my point...

11 Feb 2010

Quote by gulsonroad30664
there will not be a tax on banks, pure theatre for public consumption.

A tax on transactions isn't a tax on banks.
It will effectively be a tax on not being in the dollar zone or the euro zone. If a tobin tax does come in Britain will be in the euro in under five years...

12 Feb 2010

Quote by awayman
there will not be a tax on banks, pure theatre for public consumption.

A tax on transactions isn't a tax on banks.
It will effectively be a tax on not being in the dollar zone or the euro zone. If a tobin tax does come in Britain will be in the euro in under five years...
How does that work then?

12 Feb 2010

This seems almost redundant to me. Its has the potential to create a huge reserve of money which again would require a vast mechanism to handle it. Who? The banks obviously.
And how well would the money be distributed? Same old same old probably. ie Katanga gets a new BMW and his people get counterfeit antibiotics.

12 Feb 2010

there will not be a tax on transactions. pure theatre for public consumption. load of bollox. its for the pacifying of the american public who are mad about tarp and bonuses.

13 Feb 2010

Quote by gulsonroad30664
its for the pacifying of the american public who are mad about tarp and bonuses.

Sod the bonuses Gulson, what's all this about tarps? I wasn't aware that canvas coverings or otherwise water-proofed, polymer coated materials were of such interest to our friends across the pond? dunno

I've a sneaking suspicion you're leading me up the garden path sunshine, but if they're really all that mad for 'em, I've got shitloads tucked away under t'mezzanine in t'warehouse? biggrin

Gulson, come 'ere? Quietly mind. What can you get on Ebay for 'em these days then? :dunno:
*rubs hands*
N x x x ;)

13 Feb 2010

Quote by neilinleeds
its for the pacifying of the american public who are mad about tarp and bonuses.

Sod the bonuses Gulson, what's all this about tarps? I wasn't aware that canvas coverings or otherwise water-proofed, polymer coated materials were of such interest to our friends across the pond? dunno

I've a sneaking suspicion you're leading me up the garden path sunshine, but if they're really all that mad for 'em, I've got shitloads tucked away under t'mezzanine in t'warehouse? biggrin

Gulson, come 'ere? Quietly mind. What can you get on Ebay for 'em these days then? :dunno:
*rubs hands*
N x x x ;)
Haha Neil :-)
Yeah... as some other people have said, it's a nice idea but it's hard to see it working; partly because of the "needing to be totally international" thing as mentioned above, and partly because as someone said, nobody has ever managed to make anything stick on banks, they just find a way to pass it off.
What about another idea though, we could have... not bailed them out and spent the money on something more useful? Because once we've given them our money, they're experts at not letting us have it back; that's their job, pretty much.

13 Feb 2010

Quote by GnV
there will not be a tax on banks, pure theatre for public consumption.

A tax on transactions isn't a tax on banks.
It will effectively be a tax on not being in the dollar zone or the euro zone. If a tobin tax does come in Britain will be in the euro in under five years...
How does that work then?
If you're doing all your business in dollars you don't need to change dollars into other currencies. So you don't need to hedge against dollar movements. Same for the Euro. So the cost of moving money into or out of the Euro zone will be increased, but for people within those zones the cost is minimized. Imagine you're a factory making DVD players in Shanghai. Suddenly all your transactions with Europe or USA are being taxed if you try to turn the money into your local currency.
Now take Shanghai out of that sentence and replace it with Scunthorpe. Suddenly being in the Euro zone will have a competitive advantage that will overwhelm the political arguments. It's not what Tobin and his supporters intend, but the law of unintended consequences always has worked that way.
Oddly of course we've had something like a tobin tax for a couple of hundred years in the UK. It's called stamp duty. No-once calls that a tax on stock brokers or estate agents.

15 Feb 2010

If I have correctly understood your explanation about Britain going in to the Euro, it is flawed.
If UK PLC were to join the Euro, it will be exactly the same as it is all over the rest of the Euro zone. If you are in Germany and are paid in Euro from a bank account in France, you will pay for the inter-bank/inter-state transaction.
It is for this reason that you are not allowed to move cash above a certain (fairly low) limit from one State to another on the premise that it is anti-money laundering.
For that reason, Britain going into the Euro will not solve the Tobin Tax issue, if that was your suggestion.

15 Feb 2010

Quote by GnV
If I have correctly understood your explanation about Britain going in to the Euro, it is flawed.
If UK PLC were to join the Euro, it will be exactly the same as it is all over the rest of the Euro zone. If you are in Germany and are paid in Euro from a bank account in France, you will pay for the inter-bank/inter-state transaction.
It is for this reason that you are not allowed to move cash above a certain (fairly low) limit from one State to another on the premise that it is anti-money laundering.
For that reason, Britain going into the Euro will not solve the Tobin Tax issue, if that was your suggestion.

I don't recognise your claim that you cannot move money from one country to another above a certain low limit. In fact, you can move money freely, so long as you know the correct SWIFT codes and so on.
The impact of a Tobin tax would be on hedge transactions, and other non value transactions. Here's the definition of a Tobin tax from Wikipaedia - not my favourite source but accurate on this occasion.
A Tobin tax, suggested by Nobel Laureate economist James Tobin, is a concept initially associated with a tax on all spot conversions of one currency into another.
So it wouldn't catch cross border transactions unless they involved a change of currency. The notion of a global financial transactions tax has been bandied around, but it's not a Tobin tax as such.

16 Feb 2010

Quote by awayman
snip... I don't recognise your claim that you cannot move money from one country to another above a certain low limit.
So it wouldn't catch cross border transactions unless they involved a change of currency. The notion of a global financial transactions tax has been bandied around, but it's not a Tobin tax as such.

I didn't say you cannot move money from one country to another above a certain low limit. What I said was:

Quote by GnV earlier in the thread
It is for this reason that you are not allowed to move cash above a certain (fairly low) limit from one State to another on the premise that it is anti-money laundering.

Of course you can move Euro from one EU State to another but even if you have the SWIFT/IBAN so you can do it electronically, you will be charged for the transaction as it is classed as foreign currency trading - even though the transaction is entirely in Euro.