Robin Hood Applies For A Position At The Inland Revenue

[hmmm_tea]

There's been a lot of talk of this "Robin Hood Tax" recently. If it's passed you by so far, here's Bill Nighy to explain it:

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It all sounds lovely doesn't it? However, when you dig deep down in the system, where's this money actually coming from? Taxing money as it bounces around the financial system is all well and good, but it's got to get in there somewhere, so it's not entirely removed from our savings and loans, etc.

What gets hit then? The obvious thing that springs to mind would be the banks profits, which I certainly wouldn't object to. However, as with any other corporation, the banks main purpose is to make profit, so they will obviously try to recoup these losses from somewhere. Where?

It would be lovely to think it would hit all the bankers wages and bonuses, especially given public feeling towards these at the moment. However, bankers don't get paid large sums of money because they deserve it more than highly skilled workers in other sectors, or because the banks like giving them large sums of money. In fact, the banks would probably like to pay them as little as possible in order to maximise profit, but need to pay in accordance with the market rate in order to retain the staff.

In the end I suspect most of the cost will end up being carried by the people, whether through increased bank charges or through increased costs of products from other corporations as they cover there increased costs. If you want to do the real Robin Hood thing then use an income tax to tax the rich to raise these funds. Anything else will tax the poor too, which isn't very Robin Hood.

OK, it would raise a lot of money, which could be used to help with a lot of issues within the world, and in the process give us all a clear conscience while we live in relative paradise compared with much of the rest of the world. Given that at the heart of many of these major issues lies consumerism and the hording of resources and property, and it's the monetary system that actively encourages these activities, surely it would be better to address the issue at this level?

The greed of the banking sector is a massive wound on our society, you can't just fix it with a sticking plaster.

Comments

[randomchris.livejournal.com]

I think part of the intention is also to make bankers think twice about each trade they're making. Some of the current problem at least has been caused by banks and other stock market traders, bond traders, currency traders etc., selling and buying shares, bonds, derivatives and currencies at very high speed - sell one day, buy back the next etc. (or even every hour) resulting in rapid, unpredictable price fluctuations which are bad for the markets and for the products being traded. With a tax in place, there would be a (slight) incentive to hang on to shares for longer, to take an interest in how companies are run on a year-to-year basis rather than their share price at that precise moment, and to take an interest in making things keep going up at a steady speed rather than making a quick buck as soon as the price starts dropping.

[mobbsy.livejournal.com]

very high speed - sell one day, buy back the next etc. (or even every hour)

You're overestimating the timeframes involved by a few orders of magnitude:

We thus posit that with regards to the debate surrounding HFT [High Frequency Trading], only trades held for short periods should be considered.
In our study we shall consider holding periods as short as 10 milliseconds and as long as 10 seconds; in our view the latter already stretches the definition of HFT but we include it to err on the side of generality

http://www.cis.upenn.edu/~mkearns/papers/hft.ps

Traders are already paying for services to ensure sub-millisecond latency between their trading servers and the exchanges.