Bill Nighy on the Robin Hood Tax

He\’s back in The Guardian. My comment on his piece:

\”It would be passed on to ordinary people? According to the IMF it would be paid predominantly by the richest.\”

That\’s not actually what the IMF says, not completely and totally.

The IMF report is here:

http://www.imf.org/external/pubs/ft/wp/2011/wp1154.pdf

In the short term the tax will lower the price of all securities which are subject to the tax. Many of these are held by rich people so yes, the rich will carry the burden. But do note that your pension plan also holds the same assets and your pension plan will fall by the same amount as those shares and bonds of the rich.

So, this is, in part, a tax upon your pension. However, the IMF goes on to point out that that is only the short term effect. The long term is something different:

How much overall investment would fall as a result of the STT would depend on the relative
elasticities of capital supply and demand. In a small, open economy, the after-tax return on
capital is determined on the world market. In response to imposition of the STT, capital
would flow out until its after-tax return was restored to the world market level. In the long
run, capital owners would therefore not bear the burden of the STT; it would fall on workers, who as a result of the smaller capital stock would be less productive and receive lower
wages. If, however, the capital supply is less than perfectly elastic, the STT will lower the
return on capital, and capital owners will share the burden of the tax with workers.

So the tax will lead to lower wages for everyone. Isn\’t that just lovely?

Nicolas Sarkozy\’s insistence that revenue should be used to help the poorest, the hungry and those hit by floods and other extreme weather episodes linked to climate change has been particularly important.

Well, yes, but we\’ve another problem here. What revenue? What extra revenue is that?

As the EU\’s own report points out there will be some income from this tax, yes. But the tax will also cause the economy to contract. Meaning that we get less revenue from all of the other taxes. And as the EU\’s own report goes on to say, the net effect on revenue will be negative. The FTT will actually *reduce* the amount of tax collected.

So, to recap: the Robin Hood Tax will reduce pensions, reduce wages and won\’t in fact raise any money. Could someone remind me why anyone wants to do this again?

10 comments on “Bill Nighy on the Robin Hood Tax

  1. “Could someone remind me why anyone wants to do this again?”

    Judging from the first few fawning comments on that piece, the answer is ‘Because a celebrity endorses it’…

  2. It’s incredible isn’t it. We spend centuries fighting over who should make the decisions and as soon as we get some semblance of liberal democracy people start demanding that actors are put in charge of tax policy.

  3. “Why would anyone what to butter the consequences? ;-P”

    So they aren’t so painful when you get buggered by them1 :D

  4. This may be a good point to let the political scum hear “no”.

    Half the cash that the Tobin wants to raise will hire an organisation:
    Lawyers to make trouble
    PIs to look into and publicise the dirt on political/bureaucratic scum–here and in Europe.
    A task force of intel pros to monitor, subvert and control the “intelligence” services
    A propaganda group to stage suitable stunts–it would be interesting if “stars” who endorse this kind of thieving acquired a following of hecklers who were dedicated to examining the issues during every performance.
    Low-level elements to prevent police action
    Privateers for when they try to bring in the military
    Whatever else is needed.
    The thieving and oppression will go on forever until someone, somewhere stands up to say “no” and makes it stick. The City has the money. The amount of shite the state has flung their way recently should break any connection between them and the sheer publicity value of announcing the above measures would put the “government” into panic. Cammy Baby, a crooked moron who thinks issuing dictates about plastic bags (in the face of economic disaster) is something he should be involved with, is not up to such a challenge.

  5. Given that the roles with which I associate Bill Nighy with seem to be spivs, conmen, thieves and unreliable tossers of various hews, I have to wonder why the tax-dodging Guardian wheels him out as an authoritative commentator on economic policy

  6. The FTT is bad in so many ways I do not know where to start. It only makes sense if the purpose is to punish at any cost.

    The commission guessed that they can introduce this at a cost of 0.5% of EU GDP. That is more than €600 billion in lost GDP. Per year. On top of that they hope to suck out another €60 billion or so. That is 1.5 EFSFs per year!

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