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Bill Gates Advocates Tax On Financial Transactions
First time accepted submitter wanzeo writes "With the current G-20 summit dominated by global financial uncertainty, previously unsuccessful tax strategies are getting new attention. In a short interview with the BBC, Bill Gates explains his support for a potential tax on financial transactions. The concept is sometimes called the Tobin tax after its originator, Nobel Laureate economist James Tobin, who first put forth the idea in 1972. Gates points to the success of Britain's Security Settlement Tax, and suggests that large economies like Germany, France, and the U.S. have expressed interest in his plan."
This might be one of those rare times when I actually agree with Bill Gates. A tax on financial transactions should reduce or stop some of the most exploitive behavior in the financial world. "High frequency" trading would become much less profitable, as would the even less ethical exploit of attempting to generate out of date quotes by overloading a trading system system.
Fanatically anti-fanatical
But there is a Bank of Sweden prize in memory of Nobel for economics, unlike astrology, professional wrestling, or air guitar.
Did you read the next page of the article with the guy dressed up like Link from The Legend of Zelda? Proposals include a tax on large trades in stocks, bonds, derivatives, or foreign currency.
... but the government needs to overhaul the system of taxation to a simple system without loopholes, and stop trying to figure out a way to tax everything we do. Once upon a time we didn't even need income taxes; times change, but having the government intrude on every aspect of our lives so that they can tax every little thing is not the way to go.
You have to ask what is the purpose of taxes to begin with; why do we need them and what's the most effective way to accomplish that, not keep coming up with new schemes that likely can have negative impacts on the economy. Every time the government creates a new tax, the cost of compliance adds to the amount that the government collects; more accountants need to be paid, more paperwork needs to be filled out.... the cost of compliance for the current system (not the taxes paid, but the resources spent figuring out what to pay). The tax foundation projects compliance costs to be in the hundreds of billions (Total Federal Income Tax Compliance Costs, 1990-2015).
There's got to be a better way - overhaul the tax system, don't keep adding to the mess it already is.
If we don't stop this nonsense, we're going to be taxed for every action we take and the fourth amendment will be a joke. You'll have a federal tax on food (eat beef? Well, beef causes global warming, so you'll have to pay), a commute to work tax; have coffee break tax; drive anywhere tax (this will be beyond what we already pay in gasoline taxes). Every time money changes hands? Is that what you really want? Lend me $20 and pay a tax? How about both of us? Lender tax and borrower tax, and then a pay-you-back (loan repayment) tax. How about a tax on getting money from your ATM? Or transferring money from one account to another? Or every time you pay a bill? It's simply ridiculous to continue along this path.
Stupid sexy Flanders.
The article says very little. At best he could watch TFA. and even then, nothing in it goes against what he said, that the US rich would turn it into a screw the middle class and poor objective. So I think its fair to say AC, you are the moron here. In your best case, an idiot at presenting an opposing argument.
slashdot troll = you make a compelling argument I do not like the implications of.
There are no Nobel prizes for...economics.
While, strictly speaking, that's true, it's close enough to the truth as to make little or no difference. There is a periodic prize that's awarded at the same time the Nobel prizes are awarded. This particular prize is given for achievements in economics, and the decision as to whom to award the gift to is made by the same people who award the Nobel prizes. It's called The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Your statement is little more than an exercise in pedantics.
~Loyal
I aim to misbehave.
My feelings is that banks are heaviest lobby what are in this world - they own money we need to keep to run this charade called Capitalism. They will hold governments hostage til they will relent on this.
I really hope that someone will proove me wrong, but this doesn't give any hope:
" The Chancellor George Osborne has delayed his return to London from Brussels this lunchtime after a row over proposals for a financial transaction tax at a meeting of European Finance Ministers.
According to sources Mr Osborne asked what was the point in even having a conversation about the financial transaction tax given that it was going to be rejected and then asked if it was âoethe best way to spend our timeâ.
I understand that the Chancellor said no bank would end up paying the tax and the final payer would be pensioners."
http://www.bbc.co.uk/news/uk-politics-15640299
As said Will Emerson in Margin Call (played briliantly by Paul Bettany): "One thing I can say for sure: they never loose their money".
user@ubuntubox:~$ stfu This server is going down for shutdown NOW!
The "Tobin tax" specifically targets currency trading, not "financial transactions" in general. In fact, the title/body of the original article are so misleading, it should probably be yanked as troll bait. All the gory details can be had here: http://en.wikipedia.org/wiki/Tobin_tax
/// Not a super-genius . . . yet. ///
I don't know about Gates, but Buffet is well-known for bemoaning the fact that he pays less (as a percentage) in taxes than his secretary does. I have never heard of him advocating any changes that would increase the tax burden on the Middle-class relative to his own. Quite the opposite, actually.
Here's my economic theory of taxing the wealthy. You won't find it in any textbook. It may be right, or it may be crazy...
There are two types of wealthy people: the ones that actually create economic value (the Buffets, Jobs, and Gates of the world), and the ones who don't.
The latter became rich, not because of what they accomplished, but because they knew the right people. Went to the right schools. Had executive hair. Had charisma, but no actual ability hiding behind it.
If you're actually a source of economic value, taxes don't affect you as much as you'd think. Government takes, gives to the poor, makes them a bit richer, and they end up buying more of your product. There may not be a 1:1 correlation, but $1 in new taxes probably ends up being far less than $1 out of their pocket when all is said and done. It may even make you more money.
If, on the other hand, you're rich purely because of luck, then a higher tax rate affects you a lot more, because you can't count on the wealth you lose being recirculated to you. It will end up going to an actual value creator and not you.
That's why the Buffets and Gates of the world don't sweat higher taxes too much, and why you hear so much wailing and gnashing of teeth from Wall Street types over the very idea.
My 2 cents, anyway.
No, my problem is that all the government seems to want to do is find new ways to tax people..
"The" government? I pay taxes to more than one government. There's Federal tax, state tax, and local tax. As to the Feds, Federal taxes are lower than they've been in 60 years. TFA is a red herring; rather than taxing financial transactions, why not simply tax Capital Gains as income (as well as get rid of loopholes like the mortgage deduction and the charity deduction)? Why should someone who "earns" $75k gambling on the stock market pay half the tax of someone earning $75k working as a roofer? The stock answer to that is "the stock market investor has huge risks!" Really? He's only risking money, the roofer risks his very LIFE.
The stock market gambler should be paying twice the tax the roofer pays. The roofer is creating wealth, the gambler simply shuffles it around and leeches off of it. TAX WALL STREET.
Free Martian Whores!
We get so excited about the debate of "should we tax or shouldn't we" -- we forget the debate about; "Why do we have a 'Wall Street' to begin with?"
Turning over a stock in anything less than three years, and definitely less than 1 year is NOT an investment in a company -- it's an attempt to "play the market." One or two day traders might win at this -- but the professionals, who have machines that can trade in nanoseconds and shave time with the competition by using shorter network lengths to WS computers for trades are going to win. Market manipulation is also too lucrative to worry about the SEC and such -- much better to buy the regulators (as we've seen).
>> However, when we consider the Trillions more that our Government had to bail out Wall Street more than just the public "TARP funds" -- and that banks like Bank of America might be posting bigger losses in the range of $75 Trillion with the FDIC backing them. So a few pennies a trade will require a few hundred years just to PAY BACK expenses they've incurred -- much less "cover" future risks.
Another way to say this is; who is MORE crazy? The person who wants to tax the Mafia or the person who thinks you cannot trust the mafia in the first place? There is no way a group that can get the FDIC to cover $75 Trillion in "bad bets" after the fact, and AFTER a bail out for the same "mistake" (I call it fraud), is a group that CANNOT get around any tax. The Day Trader will see a tax, but if there is enough of a fee to stop the market manipulators -- be sure that they will get compensated where you are not looking.
Wall Street's EXCUSE to suck up 40% of all profits is that they help provide funds to let companies grow -- having seen the rampant leveraged buyouts, the VC funds used to sell away parts of companies, and the shuttering of tens of thousands of businesses to provide "fodder" for Hedge Funds -- it's a bit like allowing a Mercenary to continue to operate in a country after wiping out a town, because you've seen him walk a little old lady across the street once.
I once made my living with Financial Services companies -- but it felt a bit like carrying ammunition for a mercenary. Biting the hand that feeds you should be a mark of integrity, and I'd like to make a living building something or making the world a better place. ALL Financial services are a ruse, because they are predicated on "investing wisely" -- which is always a pitch of "getting back more than you put in." For every wise investment to do better than just the average of stocks, SOMEONE has to lose. By the time a company has stocks on Wall Street, it's either on someone's menu or it has all the money it needs -- and some VC firm reaped that benefit before you did.
>>"ad space available -- low rates!!!"
You already pay this tax because the HFT guys are front running you. But I would agree that an exemption for some amount of trading makes sense.
I am not an expert, and no I can not explain exactly how it will happen.
I believe you mean to say "I have no idea what I'm talking about but I am going to say it anyway". Yeah buddy I actually make money by trading stocks so I know how it works. You, and everyone else that argues against HFT, have no fucking clue how the market works. HFT cannot alter the price. Because if Goldman Sachs is on one side of the trade with HFT, then JP Morgan is on the other side doing just the opposite. Otherwise you would be seeing prices all over the map, all the time. HFT is not a price maker, it's a price taker. When real money comes into the market - like on the day of the "flash crash" (a day that cost me, personally, $20,000), that is when the price moves. And curiously when the "flash crash" happened all the computers were instantly taken offline because the price moved so quickly it tripped the fail-safes. So what happened? For 5 minutes NO ONE WAS BUYING, which is why the market plummeted. If someone had left their computer on they would have bought the entire market. But since buying the whole market is not something a brokerage wants to do - even if it had money for it - the algorithms stopped the programs.
If you are desperate to sell and no one is around to buy, you will lower your price until someone buys. If you are desperate to sell and someone (a HFT program) is around to buy, you sell right away and usually close to the price you wanted. But you people who are completely clueless as to how a market works fail to understand this simple concept. In your theoretical world you think that just because you want to sell something, someone is going to buy it. Or just because you want to buy something, someone is going to sell it to you. That's not how the market works at all.
Seven puppies were harmed during the making of this post.
While I'm on the fence about the tax, I am definitely with you on making high frequency trading as difficult and least profitable as possible.
Most people know this and the only people who like high-frequency trading are those who profit from it directly. The markets work for these traders and these traders work for the markets.
Normal people and the companies listed on the markets are hurt by this arrangement. They would gladly take their business to another market that had more sane trading rules.
Which gets to the actual problem - regulations on securities markets. We have a classic example of regulatory capture here, so starting a competing market is effectively impossible. NASDAQ couldn't happen today.
Like anything else there needs to be a market in markets (sup, dawg), and this has been prevented from happening, so we wind up in this surrealistic position with markets that hurt most of its participants to enrich the very few (a net transfer of wealth). The 1% isn't just on Wall Street - their accomplices in Washington are essential to the mechanism.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
And thus it won't affect individuals who use their rupees to buy lamp oil, rope, or bombs.
Putting the tax burden on those who insist on playing with depositor money, privatizing profits and socializing losses is a start towards fairness. Not much of a start, granted, but a start. Unfortunately, money = unaccountable political power. Until congress and the class from which most of congress comes (i.e. the wealthy) are barred from office, this will never happen.
Please do not read this sig. Thank you.
The point is so many people fall all over themselves to defend the repugnant crap the Koch brothers are doing with their fortune, meanwhile Bill Gates actually uses his money for good and people crawl out of the woodwork to make sure no one gives him any credit whatsoever.
Do you have any reason to believe the people allegedly doing all of this are the same people? Isn't it possible that whoever is praising the Koch brothers are not the same people decrying Bill Gates?
According to conservative ideology, Bill Gates was the poster boy for success
I don't understand, are you for or against conservatism? Do you have the official conservative guidebook that says unequivocally that Bill Gates is the "poster boy" for anything? Otherwise, you're using a whole lot of words just to prove that you don't really know what you are talking about.
The soylentnews experiment has been a dismal failure.
If that's the stock answer you get, then I suppose you are asking the wrong person. The right reason why capital gains are taxed lower is because they've already received an additional tax before being distributed. Capital gains, are subject to a corporate income tax before they are distributed, so they are taxed both before and after distribution. Salary, on the other hand, is NOT subject to corporate taxation (contrary to what Joe the Plumber would have you think), so the only taxation it receives is the income tax after it's paid out. The lower value of capital gains tax is supposed to even this out.
Now, capital gains can come in a few different forms. It can come in the form of a dividend, which clearly works as described above. On the other hand, it can also come in the form of an increase in the stock value, and that's not so clearly tied to the corporate assets. In theory it should be somewhat reflective of the corporate assets, and those assets have likewise been reduced by the amount of the corporate tax, so to that degree, the above holds true. However, stock value also has a large component that ISN'T tied directly to corporate assets, but rather just to the whims of the market, and I think it's fair to say that portion of it is only subject to the capital gains rate.
Note, I'm not saying I believe the capital gains rate is too high, too low, or just right. I'm merely explaining the logic behind it being lower.
When they started strong arming windows onto OEM vendors, OS2 was a potential adversary.
The wages paid to employees are not taxed a income. Thus, your company does not pay tax on your salary.
Sales tax is State and local, not Federal. Feel free to move to a State that does have sales tax. For example, Oregon, Montana or New Hampshire. Feel free to rent if you don't want to pay property tax.
Yes, we need to drastically reduce military and conflict spending. But you do have a degree of control over many of the taxes you pay.
Learning HOW to think is more important than learning WHAT to think.
When I heard of this way back when, this kind of tax was supposed to replace most other taxes. That part seems to have been lost somewhere along the way though.
So, if I go and buy a hotdog from a street vendor with cash, and he keeps the cash, and uses it to buy gas later, there is no tax on the money?
On the other hand, if I pay with debit card, and his vending service pays him through a check, and then he pays for his gas using a debit card, then it is taxed 3 times?
If this is the case, I see a quick resurgence in cash, followed by a host of new payment types that get around the letter of the law.
Free unix account: freeshell.org
Actually, the military spending (Not just DOD) is actually ~60% of federal spending when you include everything related to defense including homeland security, CIA etc, military projects at NASA, veterans affairs etc plus the interest on the debts directly related to these projects.
Right now the DOD (only about half of all defense spending) is fully 50% of the world spending on military. The US is only 20% of the world GDP. therefore the CORRECT spending on the military is actually about 25% of what we actually spend...
Social security is not a problem. It is completely funded through payroll taxes.
Medicare IS a problem but the solutions is politically unpalitable... True comprehensive coverage of every single person with a reduction in actual benefits (primarily not offering MRIs when X-rays are sufficient)
Because the stock market deals in REAL goods and property, not just straight capital exchange. People investing in the economy is a societal net gain. Gambling is only a societal net gain through taxation, hence why its taxed more.
Good-bye
why not simply tax Capital Gains as income
I advocate this as well, though you would need to eliminate corporate income tax. Dividends should also be taxed as regular income. This would have the additional benefit of severely reducing overseas corporate tax havens, in fact possibly even making the US a haven. It would wipe out the entire corporate "creative accounting" industry, which IMHO is a good thing. I'm sure there will still be ways to dodge taxes, but nothing like the mess we have now.
I have no problem with keeping things like the mortgage deduction below a certain income limit, and phase it out for higher earners. Ease the shock to the housing market by grandfathering current loans. Most deductions should not be available for higher earners, except for charitable contributions.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
So what exactly changed so much in the real world, that those 5 minutes were so important? Did all of the worlds corporations suddenly declare they were bankrupt?
Saying people were 'desperate to sell' just highlights one of the problems of the stock market - it's not about the performance of the corporations, just their second by second stock prices.
So why should the people support a stock market like that? Why not implement a 10% tax on any stock trades where you keep the stock for less then a few days?
The value of stocks became somewhat disconnected from any "real" value long ago. I'm opposed to differentiating tax levels by how you made the money. All income should be taxed the same.
Anarchists never rule
capital gains are NOT double taxed, you would be thinking of taxes on dividends.
capital gains should, if anything, be taxed as unearned income
Snowden and Manning are heroes.
The part of the rules of the game that are broken is that rich people don't have to pay their fair share of taxes. Warren Buffet giving every penny he has to the US Government would not fix the problem. Changing the tax system would.
Claiming that he should just give his money away is a flippant ridiculous answer. It is similar to telling people who point out that the planet is overpopulated that if they think the planet is over populated, they should just kill themselves. It is neither a legitimate answer, nor helpful. The sad thing is that I think there are a lot of people who actually believe it is legitimate.
He said capital gains, you're thinking of dividends. Two different things. One is, I own Stock A, and stock A distributes some percentage of it's profits to stockholders. The other is I buy stock B for $1, sell it for $2, and have "capital gains" of $1. Similar to the difference between investing in real estate to rent, and investing in real estate to sell.
Often corporate taxes don't apply to capital gains. Lets say I bought a house 10 years ago for $150k. Today I sell it for $200k. I had capital gains of $50k, which I would have to report and be taxed on. That $50k has never encountered corporate taxes. Now, the other $150k, that gets alot more complicated...
Seriously I feel as though all these people saying "corporate taxes are already applied to capital gains!" have never actually done business taxes.
What do you mean?
I buy a share of stock for $10 (with my post-tax income), and sell it for $15. I made capital gains of $5.
Where was that $5 subject to "corporate income tax"???