Debating the Tobin Tax
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Illuminating the dark corners of the financial system MARINA PONTI FEDERICA BIONDI Financial mechanisms, as they stand today, are not able to counteract illegal transactions. Greater transparency and stricter rules should be prioritised by richer countries, not only as a means of fostering social justice and redistribution of wealth, but also as an instrument to fight criminal operations and terrorism. Along these lines, a currency transaction tax would be a relevant step forward and provide a concrete mechanism for monitoring cross-border financial transactions. “The fundamental problem is to find a social system discontent amongst the tax-paying population, thus further increasing the risk which is efficient economically and morally.” of illegal flight of funds to avoid high taxation. A vicious circle sets in. Another example of the lack of transparency in cross-border financial J.M. Keynes, 1925 transactions is the agencies that transfer money worldwide using money orders. Donor countries lament lack of resources as the reason for neglecting their These agencies have widespread networks of offices all over the world. They commitment to give at least 0.7% of GNP for Official Development Assistance. are used mainly by people who have moved from a “developing country” to a But these same countries allow the many dark corners of their financial markets “developed” one to find work and who wish to send part of their earnings to to cause large and increasing losses of fiscal revenues every year. Financial their families without the complications of opening a bank account. Considering markets are not transparent; this implies an enormous loss of revenue and the number of people in this situation, it is easy to deduce that the figures creates a breeding ground for illicit transactions. -
Creating Market Incentives for Greener Products Policy Manual for Eastern Partnership Countries
Creating Market Incentives for Greener Products Policy Manual for Eastern Partnership Countries Creating Incentives for Greener Products Policy Manual for Eastern Partnership Countries 2014 About the OECD The OECD is a unique forum where governments work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Union takes part in the work of the OECD. Since the 1990s, the OECD Task Force for the Implementation of the Environmental Action Programme (the EAP Task Force) has been supporting countries of Eastern Europe, Caucasus and Central Asia to reconcile their environment and economic goals. About the EaP GREEN programme The “Greening Economies in the European Union’s Eastern Neighbourhood” (EaP GREEN) programme aims to support the six Eastern Partnership countries to move towards green economy by decoupling economic growth from environmental degradation and resource depletion. The six EaP countries are: Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine. -
Tax Strategies for Selling Your Company by David Boatwright and Agnes Gesiko Latham & Watkins LLP
Tax Strategies For Selling Your Company By David Boatwright and Agnes Gesiko Latham & Watkins LLP The tax consequences of an asset sale by an entity can be very different than the consequences of a sale of the outstanding equity interests in the entity, and the use of buyer equity interests as acquisition currency may produce very different tax consequences than the use of cash or other property. This article explores certain of those differences and sets forth related strategies for maximizing the seller’s after-tax cash flow from a sale transaction. Taxes on the Sale of a Business The tax law presumes that gain or loss results upon the sale or exchange of property. This gain or loss must be reported on a tax return, unless a specific exception set forth in the Internal Revenue Code (the “Code”) or the Treasury Department’s income tax regulations provide otherwise. When a transaction is taxable under applicable principles of income tax law, the seller’s taxable gain is determined by the following formula: the “amount realized” over the “adjusted tax basis” of the assets sold equals “taxable gain.” If the adjusted tax basis exceeds the amount realized, the seller has a “tax loss.” The amount realized is the amount paid by the buyer, including any debt assumed by the buyer. The adjusted tax basis of each asset sold is generally the amount originally paid for the asset, plus amounts expended to improve the asset (which were not deducted when paid), less depreciation or amortization deductions (if any) previously allowable with respect to the asset. -
Time for a Tobin Tax? Some Practical and Political Arguments
Oxfam GB Time for a Tobin Tax? Some practical and political arguments May 1999 This paper was written for Oxfam (Great Britain) by Heinz Stecher with contributions from Michael Bailey. Comments from readers are welcome. For further information or feedback, please contact Jenny Kimmis, Oxfam GB Policy Department (+44 1865 312212 or [email protected]). Oxfam GB is a member of Oxfam International. Time for a Tobin Tax? Some practical and political arguments Summary This paper is intended to further discussion on ‘Tobin taxes’. It provides information on the currency aspect of international financial instability, looks at the arguments around a global currency transaction tax and its potential value, explores the possibility of the proposal’s further political advance, and concludes with comments on prospects for advocacy. Why a currency transaction tax? James Tobin, an American economist, made his proposal for a levy on international currency transactions in 1978. The tax was designed to deter the speculation that causes sharp exchange rate fluctuations and serious damage to economies. In the 1990s, two additional facts have sharpened interest in Tobin’s proposal and its variants. The first is the huge growth in foreign exchange trading to about $1.8 trillion per day and the corresponding increase in currency instability and related financial crises. Second, since the tax could generate substantial sums, the idea has attracted the attention of those concerned with financing development – a concern accentuated by the fiscal challenges faced by the state as well as by the growing need for international co-operation on problems of poverty, the environment and security. -
Environmental Taxation: Mirrless and Beyond
Original citation: McEldowney, John F. and Salter, David. (2016) Environmental taxation in the UK : the Climate Change Levy and policy making. Denning Law Journal. http://ubplj.org/index.php/dlj/index Permanent WRAP URL: http://wrap.warwick.ac.uk/80815 Copyright and reuse: The Warwick Research Archive Portal (WRAP) makes this work by researchers of the University of Warwick available open access under the following conditions. Copyright © and all moral rights to the version of the paper presented here belong to the individual author(s) and/or other copyright owners. To the extent reasonable and practicable the material made available in WRAP has been checked for eligibility before being made available. Copies of full items can be used for personal research or study, educational, or not-for-profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. A note on versions: The version presented here may differ from the published version or, version of record, if you wish to cite this item you are advised to consult the publisher’s version. Please see the ‘permanent WRAP URL’ above for details on accessing the published version and note that access may require a subscription. For more information, please contact the WRAP Team at: [email protected] warwick.ac.uk/lib-publications Denning Law Journal – special issue - ‘Contemporary Legal and Policy Issues in the Global Oil and Gas Sector’ Environmental Taxation in the UK: the Climate Change Levy and policy making John McEldowney* and David Salter** ABSTRACT Environmental taxation is different from many other forms of taxation as it is not only used to raise revenue but it is also able to marginally influence behaviour to protect and enhance the environment. -
Environmental Taxes and Subsidies: What Is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?
William & Mary Environmental Law and Policy Review Volume 24 (2000) Issue 1 Environmental Justice Article 6 February 2000 Environmental Taxes and Subsidies: What is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems? Charles D. Patterson III Follow this and additional works at: https://scholarship.law.wm.edu/wmelpr Part of the Environmental Law Commons, and the Tax Law Commons Repository Citation Charles D. Patterson III, Environmental Taxes and Subsidies: What is the Appropriate Fiscal Policy for Dealing with Modern Environmental Problems?, 24 Wm. & Mary Envtl. L. & Pol'y Rev. 121 (2000), https://scholarship.law.wm.edu/wmelpr/vol24/iss1/6 Copyright c 2000 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/wmelpr ENVIRONMENTAL TAXES AND SUBSIDIES: WHAT IS THE APPROPRIATE FISCAL POLICY FOR DEALING WITH MODERN ENVIRONMENTAL PROBLEMS? CHARLES D. PATTERSON, III* 1 Oil spills and over-fishing threaten the lives of Pacific sea otters. Unusually warm temperatures are responsible for an Arctic ice-cap meltdown. 2 Contaminated drinking water is blamed for the spread of avian influenza from wild waterfowl to domestic chickens.' Higher incidences of skin cancer are projected, due to a reduction in the ozone layer. Our environment, an essential and irreplaceable resource, has been under attack since the industrial age began. Although we have harnessed nuclear energy, made space travel commonplace, and developed elaborate communications technology, we have been unable to effectively eliminate the erosion and decay of our environment. How can we deal with these and other environmental problems? Legislators have many methods to encourage or discourage individual or corporate conduct. -
Financial Transaction Taxes
FINANCIAL MM TRANSACTION TAXES: A tax on investors, taxpayers, and consumers Center for Capital Markets Competitiveness 1 FINANCIAL TRANSACTION TAXES: A tax on investors, taxpayers, and consumers James J. Angel, Ph.D., CFA Associate Professor of Finance Georgetown University [email protected] McDonough School of Business Hariri Building Washington, DC 20057 202-687-3765 Twitter: @GUFinProf The author gratefully acknowledges financial support for this project from the U.S. Chamber of Commerce. All opinions are those of the author and do not necessarily reflect those of the Chamber or Georgetown University. 2 Financial Transaction Taxes: A tax on investors, taxpayers, and consumers FINANCIAL TRANSACTIN TAES: Table of Contents A tax on investors, taxpayers, and Executive Summary .........................................................................................4 consumers Introduction .....................................................................................................6 The direct tax burden .......................................................................................7 The indirect tax burden ....................................................................................8 The derivatives market and risk management .............................................. 14 Economic impact of an FTT ............................................................................17 The U.S. experience ..................................................................................... 23 International experience -
Financial Transaction Tax: a Discussion Paper on Fiscal and Economic
Financial transaction tax: A discussion paper on fiscal and economic implications June 2013 The political debate surrounding the financial transaction tax has become fixated on the simplistic common denominator: collecting money, penalising banks, assuaging the markets and establishing justice. These winsome and appealing demands currently enjoy broad support in Germany. With public approval at 82% according to the European Commission's Eurobarometer survey, positive sentiment is highest in Germany ahead of both France and Greece, where approval is at 75%. And so it appears that the political common denominator has been found! However, from a macroeconomic perspective the crux is whether it would ultimately be possible to satisfy regulatory and fiscal demands by introducing the financial transaction tax. Doubts are not unwarranted in this regard. Is the financial transaction tax capable of fulfilling the necessary functions of financing, distribution and steering? Although the specific embodiment of the financial transaction tax remains nebulous for the time being, if one takes a long-term, holistic view, the direct and indirect costs of introducing such a tax appear to outweigh the benefits. The following observations summarise the manifest flaws in the concept, as well as the financial and real economic ramifications of those flaws, which have not been given sufficient consideration. In June 2012, the German federal government and the opposition published a green paper, in which they promised "to assess the impact the tax would have on pension assets, retail investors and the real economy, and to avoid negative consequences".1 It is becoming clear that this promise is untenable. In fact, a financial transaction tax is incapable of sensibly and expediently fulfilling any of the three necessary functions of a tax: financing, distribution and steering. -
Working Towards a Just Peace in the Middle East
KAIROS Policy Briefing Papers are written to help inform public debate on key domestic and foreign policy issues No. 16 February 2009 What Kind of a “New” Bretton Woods will Emerge from the Crisis? John Dillon s the world undergoes the greatest financial tutions not only failed to prevent the current crisis crisis since the 1930s, political leaders of but also contributed to it by encouraging the deregu- Avarious persuasions have been talking about lation and liberalization of financial markets. convening a new Bretton Woods conference to re- The original Bretton Woods conference estab- design the global financial system. The rhetorical lished the International Monetary Fund (IMF) to calls for a new Bretton Woods sound appealing. But oversee the financial system and the International it is not at all clear whether a new, more just and Bank for Reconstruction and Development (now sustainable order will emerge. Currently minor re- known as the World Bank) to assist with post-war forms that will only shore up an unjust economic reconstruction. Over their 64 years of existence order seem more likely. these two institutions have evolved in directions In this briefing paper we shall first look at how that would not be recognizable by their founders. the monetary system established at Bretton Woods, The IMF no longer has sufficient resources to act as New Hampshire in 1944 that had achieved relative a true lender of last resort. The World Bank has stability broke down in the early 1970s and was re- strayed from its mandate of funding genuine social placed by deregulated financial markets. -
Core 1..136 Hansard (PRISM::Advent3b2 10.50)
CANADA House of Commons Debates VOLUME 144 Ï NUMBER 060 Ï 2nd SESSION Ï 40th PARLIAMENT OFFICIAL REPORT (HANSARD) Monday, May 25, 2009 Speaker: The Honourable Peter Milliken CONTENTS (Table of Contents appears at back of this issue.) Also available on the Parliament of Canada Web Site at the following address: http://www.parl.gc.ca 3639 HOUSE OF COMMONS Monday, May 25, 2009 The House met at 11 a.m. GOVERNMENT ORDERS Ï (1200) Prayers [English] CANADA-COLOMBIA FREE TRADE AGREEMENT Ï (1105) IMPLEMENTATION ACT [Translation] Hon. Stockwell Day (Minister of International Trade and Minister for the Asia-Pacific Gateway, CPC) moved that Bill VACANCY C-23, An Act to implement the Free Trade Agreement between MONTMAGNY—L'ISLET—KAMOURASKA—RIVIÈRE-DU-LOUP Canada and the Republic of Colombia, the Agreement on the The Speaker: It is my duty to inform the House that a vacancy Environment between Canada and the Republic of Colombia and the has occurred in the representation, namely Paul Crête, member for Agreement on Labour Cooperation between Canada and the the electoral district of Montmagny—L'Islet—Kamouraska—Riv- Republic of Colombia, be read the second time and referred to a ière-du-Loup, by resignation effective May 21, 2009. committee. [English] He said: Mr. Speaker, I thank the House for the opportunity to address issues related to what I believe and what many people Pursuant to subsection 25(1)(b) and subsection 26(1) of the believe is an important government initiative, and that is the Parliament of Canada Act, a warrant has been addressed to the Chief establishment of a formal free trade agreement with Colombia. -
Wealth Transfer Planning
Wealth transfer planning WEALTH TRANSFER PLANNING Familiar landscape. New opportunities. Where do you start? In contrast to the individual income tax landscape, the wealth transfer tax-planning landscape may seem very familiar. Yet the doubling of the exclusion amount provides new opportunities for individuals to move their wealth transfer plan further down GLOBALIZATION the path before these favorable provisions sunset. TAX POLICY UPDATE RESOURCES HOME MENU 3 2019 essential tax and wealth planning guide | Part 2 Wealth transfer planning Familiar landscape. New opportunities. Familiar landscape. New opportunities. Where do you start? Familiar concepts, larger scale Where do you start? Consider paying gift WEALTH TRANSFER PLANNING taxes currently Thinking outside The transfer tax system, which includes gift, estate, and generation-skipping not have an estate greater than the applicable exclusion amount, but the box transfer taxes, has been the object of extensive political debate for the last would have if they had not engaged in wealth transfer during life. While that twenty years. Yearly bills in both the Senate and the House of Representatives number is impossible to know, it is interesting to note that in 2017, more have proposed repeal of the system outright. While the political landscape than 239,000 gift tax returns were filed reporting over $74.73 billion in gifts. necessary to accomplish outright repeal never materialized, Congress has Comparatively, the gross estates reported on the 12,700 estate tax returns twice in the last ten years delivered significant transfer tax relief by increasing filed in 2017 totaled $192.1 billion. GLOBALIZATION the applicable exclusion amount—the amount each taxpayer “excludes” from transfer taxation—from $3.5 million in 2009 to $5 million in 2010, and Of concern, however, is that the estate tax exemption increase under the from $5.49 million in 2017 to $11.18 million in 2018. -
Financial Transaction Tax: Review and Assessment
CPB Discussion Paper | 202 Financial transaction tax: review and assessment Jürgen Anthony Michiel Bijlsma Adam Elbourne Marcel Lever Gijsbert Zwart Financial transaction tax: review and assessment Jürgen Anthony *, Michiel Bijlsma †, Adam Elbourne ‡, Marcel Lever § and Gijsbert Zwart ** January 16, 2012 Abstract We explore whether a Financial Transactions Tax (FTT) is likely to correct the market failures that have contributed to the financial crisis, to what extent FTT succeeds in raising revenues, and how the FTT compares to alternative taxes in terms of efficiency. We find little evidence that the FTT will be effective in correcting market failures. Taxing of transactions is not well targeted at behaviour that leads to excessive risk and systemic risk creation. The empirical evidence does not suggest that the introduction of an FTT reduces volatility or asset price bubbles. An FTT will likely raise significant revenues and we estimate those revenues for the Netherlands. In the short term, the incidence of the tax will be chiefly on the current holders of securities. Ultimately, the tax will be borne in part by end users, and we estimate the likely effects on economic growth. When compared to alternative forms of taxation of the financial sector, the FTT is likely less efficient given the amount of revenues. In particular, taxes that more directly address existing distortions, such as the current VAT exemption for banks, and the bias towards debt financing, provide more efficient alternatives. Keywords: Financial transaction tax, Tobin