Snippa and twat share a common descriptive power

As Larry Elliott has noted in the Guardian, Labour appears to be committing itself to a financial transaction tax for use on the financial services sector, if it is elected.

I unreservedly welcome this. Such a tax has long been the goal of tax justice campaigners. It helps address the issue, long noted on all objective sides, that the financial services sector as a whole is undertaxed,

That’s a very cool piece of rhetoric there. If you don’t agree that finance is undertaxed you are, therefore, by definition, not objective.

not least because it enjoys VAT exemption.

Which means that it cannot reclaim input VAT. The actual impact of exemption being one of those things which – objective – observers argue about therefore but at least some of them claim that finance pays more, not less, tax because of the exemption.

True, consumers of finance probably pay less tax but that’s rather different, isn’t it?

The tax is small. The impact cannot be known as the behavioural response will be hard to assess, and attempts to avoid it cannot be entirely predicted.

Bu everyone who has tried to predict it – the EU for example – says that it will be a net revenue loser. Which is why here’s the claim that whocouldanowd is being advanced ahead of time.

It’s also true that it’s not people trying to avoid it that worries. It’s the behaviour change of the tax itself which is. There will be less trading, lower liquidity, dealing spreads will rise.

5 thoughts on “Snippa and twat share a common descriptive power”

  1. Some sort of globally agreed Tobin tax would have a deleterious effect on the world’s economy. But a unilateral Tobin tax for the UK alone would be catastrophic for the City, as 90% of the international financial business would simply move to NY, HK or Tokyo.

  2. They tried it Sweden in the 90s.

    It was a disaster.

    They scrapped it.

    It would be different in the UK

    Because reasons

  3. The swedish equivalents of spud claimed before the tax was introduced that it would bring in 1500 million krone a year. It never bought in more than 80 and averaged 50.

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