“Two Nobel prizewinners, including the outspoken critic of the financial system Joseph Stiglitz, and scores of professors at universities from Harvard to Kyoto, are calling on G20 governments to back a financial transactions tax on speculative dealings in foreign currencies, shares and other securities of 0.05 per cent – say £500 on a £1m transaction.”

Might I suggest that people go and read those two papers? They are the actual justification for the tax after all. Once you’ve done so you can come back and run through the following logical chain.

1) We do indeed already have a financial transactions tax (FTT). Stamp Duty on shares (The Baker paper specifically uses this as its starting point).

2) Who bears the economic burden of this FTT? Well ,several pieces of research over the years (Oxcera for one) say that it’s pension funds in hte form of lower pensions and companies in hte form of higher costs for raising capital (which feeds through into lower wages or the workers).

3) OK, who will bear the eonomic burden of the proposed FTT?

Any one who says that it’ll be just the banks of the bankers needs to look very hard at point 2) again.

@Matthew Taylor, @Thomas Byrne – in answer to claims this “won’t raise a fraction of the money it’s supporters claim”

Let’s take the $400billion figure. Taking the research done by the RHT campaign, by Schulmeister: http://www.wifo.ac.at/wwa/servlet/wwa.upload.DownloadServlet/bdoc/WP_2009_344$.PDF

His research – based on hypothetical transaction tax receipts in the global economy 2007 – calculates that if the levy was 0.05%, the maximum range that the RHT called for (down to 0.005%), it would indeed reduce transactions by 65%. However, this would still generate 1.205% of World GDP if the reduction was ‘medium’ or to 0.682% of World GDP if the reduction was ‘high’. See page 13.

Now, if you take world GDP in 2007 to be $54.9 trillion (using these World Banks from Google’s Public Data site – http://bit.ly/aDFfHB), my calculation is that the tax would raise between $374.418 billion and $661.545 billion.

Which backs up the Robin Hood Tax claim that:

“Various experts (Schulmeister (2009) who provides a good summary of the work of others, Baker et al (2009), and our own campaign research) have produced estimates of the tax receipts, using various methodologies. All estimates are in the hundreds of billions of dollars.”
http://robinhoodtax.org.uk/how-it-works/the-big-idea/

Soros bet like fuck on crashing the pound to make his money. These people are happy to bet against the stability of a country for their own personal gain (and I don’t blame them).

A Tobin Tax is the ultimate one-way bet. You’d have to be really stupid, not to make money off it. Of course these people back it.

But in the meantime, here is a quote from the Robin Hood Tax campaign press release:
“The UK campaign is part of an international movement with similar calls being made in the USA, Europe and across the developing world. Gordon Brown, Angela Merkel, Nicolas Sarkozy, Nancy Pelosi, Jose Manuel Barroso, Meles Zenawi (Ethiopia) have all spoken out in recent months in support of some form of transaction tax.

Financial figures who have backed transaction taxes include Lord Turner (FSA), George Soros, Warren Buffet, Avinash Persaud (chairman of Intelligence Capital), Sir Philip Hampton, (RBS chairman) and Terry Smith (chief executive of money brokers Tullett Prebon).”

http://www.actionaid.org.uk/102311/the_robin_hood_tax___a_crisis_for_the_banks_becomes_an_opportunity_for_the_world.html

And as Owen Tudor said on this blog on Monday:

“The call for a global tax is backed in Europe by Gordon Brown, Angela Merkel and Nicholas Sarkozy. President Lula in Brazil and Prime Minister Zenawi in Ethiopia are keen. So is the Chancellor in Austria, the former head of the Bank of India, the Speaker of the US House of Representatives Nancy Pelosi. Warren Buffet and George Soros, Joe Stiglitz and Paul Krugman – financiers and nobel prize winning economists are supporters.”

Ended up blogging on this this evening: http://bit.ly/aqaw4x Picks up on David’s three “Claims” towards the end.

The one he omitted is the biggie – which both Tim Worstall and Thomas Byrne identified – the fact that this tax won’t raise a fraction of the money it’s supporters claim. I’m with Nolan on the prospects for international consensus, and if we could achieve it, wasting it on a tax which won’t raise what it’s supposed to seems a strange move.