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Tuesday, 10 November 2009

Gordy and a Tobin Tax

"A study by the Austrian government showed that a 0.05% tax imposed on UK financial trades would raise about £100bn a year. That spells a near end to the debt problem caused by the banks and/or cash for climate change action in poor countries. Now, Brown says, the risks fall on the taxpayer, the rewards on the banks; but a new system must insure against future risk and yield a fair levy to society."
That'd be lovely.
"But that remarkable £100bn is the sum the Treasury would reap even if a transaction tax were to lead to a highly unlikely two-thirds drop in UK transactions"
that's a pretty conservative estimate, so a 0.05% tax WITHOUT a drop would probably wipe out our deficit. And there's also the possibility that some people might be willing to pay for a decent service.

"Brown needed a public reckoning, a time to say: "The world has changed and so have I. Like other leaders and most economists in the boom years I got things wrong. I should have regulated more, not less. Our new industrial policy acknowledges that I relied too much on the financial sector. When the facts change, I change my mind. As everyone should, I learn from experience, and now I see what must be done. Not only was the whole economy unbalanced by the dominance of finance, but the rewards were too unfairly shared in the boom years; we must ensure the pain of these hard times is born by the broadest shoulders.""
Agreed.

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