12 comments on “So it\’s not just bastard neo-liberals like me who understand the FTT then

  1. I am torn. On the one hand, anything Labour List says is likely to be rubbish. On the other I don’t want to be closed minded, well, too close minded or sectarian.

    So I suppose it is fair to say that pigs rooting under oak trees may find the odd acorn.

  2. So I suppose it is fair to say that pigs rooting under oak trees may find the odd acorn.

    Being Labour List, they’ll have been rooting in a pine forest – and because they did find a pine cone, they’ll insist we treat it as an acorn.

    I’m more likely to believe that an overdose of recreational hallucinogens has temporary brought one of them vaguely close to reality.

  3. That’s unfair. Credit where it’s due – the article is shows a better understanding of the detailed operation of the FTT and its flaws than just about anything outside the specialist press.

  4. That article is mostly okay – amongst other things it doesn’t mention the disadvantage of the FTT going straight to (not recently signed off by the auditors) EU funds and it thinks that an international FTT would be better rather than worse.

    But that’s not the point – we’re getting at Labour List, not at Mr Rowney (who seems to be their professional burr in the saddle, like Graeme Archer in the New Statesman.) Have you checked any of the other articles? This and, considering the BBC’s endless sucking up to New Labour when they were in power this, just as examples.

  5. He does have go at a strawman though: “I’ve also heard opponents of the FTT claim that ordinary consumers like you and I will have to pay the FTT as we daily enter into financial transactions using online banking, credit and debit cards.”

    I haven’t heard any opponents of the FTT saying this, so I’m slightly lost as to why he should feel the need to bring this up, especially as he then goes to make a much much stronger case as to the actual level of damage this is going to do than I have heard anyone else make (even when they are getting it right).

  6. On which note, is he actually right about the FTT applying at every stage in the transaction and on both buy and sell sides?

    If so:
    – that’s a doozy – stunned that that hasn’t been jumped over already…
    – was this also the case for the Swedish bond tax in the 1980s? i.e. was it really a 0.003% tax causing an 85% drop in volume, or was the effective rate many multiples of that?

  7. My favourite part:

    “it’s not impossible that consumers might be indirectly charged the cost of the FTT by financial institutions; however this is an argument against all taxation”

  8. Ahh, but he has good intentions so he is right. You on the other hand have ill intentions, so you are wrong.
    Simples.

  9. You on the other hand have ill intentions, so you are wrong.

    Not quite. We are assumed to have ill intentions by the mere assumption that we are right-wingers.

    Some of us may well be, of course. Right wingers as well as ill-intentioned.

  10. SE, of course. I was simply pointing out how the left can deem the same answer to be at once both right and wrong depending on who reaches that answer. Its about supposed intentions, not content or outcomes.

  11. I left this comment there

    ——————————

    A qualified congratulations. While this analysis is fundementally correct and very welcome (especially given where it is published), I think in one important area you have actually under-played the problem.

    You say:

    “I’ve also heard opponents of the FTT claim that ordinary consumers like you and I will have to pay the FTT as we daily enter into financial transactions using online banking, credit and debit cards. This again isn’t true, at least in the context of the financial transactions conumers commonly think of. The FTT specifically excludes from its scope loans, deposits, spot foreign exchange transactions, emissions credits and commodities and most consumer product such as insurance contracts, mortgage lending and consumer credit. You won’t pay the FTT every time you use your debit card at ASDA. However, it’s not impossible that consumers might be indirectly charged the cost of the FTT by financial institutions; however this is an argument against all taxation and does not take into account the splitting of retail and investment banking as proposed by the Independent Commission on Banking.”

    There are two points here:

    1. Consumers will bear the burden of an FTT in more ways than just borrowing money, insurance products or buying FX. Pretty much every product we buy these days sits at the ends of a chain of global supply and manufacture. At every step of that chain ( extraction, processing, raw material supply, component manufacturing, assembling, distribution and sale), you will typically find a set of a currency, FX and interest rate hedges – the cost of which get bundled into the final sale price. Thus consumers will bear the burden of an FTT in far more ways than just a straight pass through on consumer banking and lending. Which also means the splitting of retail and investment banking is irrelevant.

    2. It is not correct that consumer burden is an arguement against “all taxation”. While it is correct that the burden of taxes levied against corporations is not actually born by corporations, it actually falls on some combination of the owners (or more accurately, capital), employees and consumers. The actual split of this incidence will depend on a variety of factors such as: the typeof tax, the industry and the openess and size of the economy in which it operates. It is a specific feature of transaction taxes like the FTT that they are almost always passed on to consumers. This is not the case for corporation tax generally (the burden of which, in the UK at least, tends to fall mainly on employees).

  12. On a more constructive note, I am genuinely encouraged by signs of intelligent life on the british left. That would be a most welcome development. Other than Chris Dillow (and a couple of commentators here), where do I get more like this?

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