tag:blogger.com,1999:blog-10701792.post8610845233113477269..comments2023-12-02T00:59:10.380+01:00Comments on England Expects: Un Grande Ecole dit non au Financial Transaction TaxGawain Towlerhttp://www.blogger.com/profile/08583658895528269901noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-10701792.post-9817542481940363112011-07-18T15:43:31.124+02:002011-07-18T15:43:31.124+02:00It would hit consumers in many ways but more impor...It would hit consumers in many ways but more important than bank service charges for day to day banking activity's, this tax strikes at the heart of us all.<br /><br />A lender borrows from the interbank market over night to balance there books, the interest rate per annum is extremely low. Now apply a financial transaction tax (as it is a financial transaction) to a home owners mortgage per morning and night and the cost of borrowing goes up Massively,that cost will be handed to the consumer.<br /><br />From the perspective of an institution that deals in the Forex markets, lets assume they take a position with one thousand contracts and intend to hold that position for 90 days.<br /><br />With a financial transaction tax rate of 0.5%, a tiny tax that wont be noticed by any one according to the many charity's pushing for this, the institution faces a one million tax bill at the time of purchasing these contracts. Once daily the position is sold and re-bought instantly to roll it over which amounts to a two million financial transaction tax and again one million at the time of sale.<br /><br />It now costs one hundred and eighty two million to hold that position for three months. Requiring a 182% return before profit levels are reached...I do not need to point out what is wrong here..many point out London as proof an FTT works yet they fail to recognize that 75% of transactions are exempt from stamp duty.<br /><br />This tax would destroy London the Forex Market there is large and if this were to be implemented on a global scale it would simply stop the flow of money.<br /><br />How is a market to transact trillions a day? Corporations to exchange hundreds of billions a year?Anonymousnoreply@blogger.com