But thankfully the limited freedom that was available enabled the industrial revolution and after that even the poorest people had plasma TVs

Thank the lord for economic freedom

Adam the Libertarian

Nice analogy but the Robin Hood tax is not a tax on a person, but on an activity. And not an ‘always done by rich people’ activity like, say,quaffing champagne or flying to Monaco (both of which I would support a tax on).

It taxes the sort of speculation attracted to tiny movements. This speculation is the reason that other companies doing ‘real’ things can financially transact without it costing the earth – the presence of a myriad (no doubt venal, profit seeking, heading-for-hell) speculators on the other side of that trade.

That then raises the costs of business. Profits may go down, hurting investors, or growth may fall, or wages may fall

( Check out the identities Chris put in this very useful blogpost:
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/10/government-borrowing-capitalism.html)

Whatever money this raises will come from wages, profits, or other income. How come you statists are so certain that it will be paid for by a specific 10,000 people that you really hate?

The Dillow link should have been:

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/10/government-borrowing-capitalism.html

Don,

I’m not quite clear what argument you are making by analogy.

Are you making a positive assertion that a transaction tax will – as a matter of empirical fact – not be passed on to consumers, or are you making a normative argument that this fact should not stop us from introducing the tax anyway.

If you are arguing the former, I think you are wrong, if you are arguing that latter, well, as already set out elsewhere, you may be right.

As to the former, I wouldn’t argue that bankers have “duty” to maximize their profits, merely that prices will adjust so that the tax is partially passed on to bank customers. All I wish to argue is that the statement “The Robin Hood tax will not be passed on to consumers” is false. That’s it.

How come you statists are so certain that it will be paid for by a specific 10,000 people that you really hate?

Not now Giles, it’s story-time. I’ve always rather liked the way that nef reports start with ‘Once upon a time…’ and end with ‘…and they all lived happily ever after’. It’s the bits in the middle that are less impressive.

Didn’t Robin Hood steal from a corrupt government which had raised taxation to unpayable levels to fund pointless wars in the middle-east?

The barons forced King John to sign the Magna Carta which included clauses on property rights such as water mills, fish weirs , etc which help enabled a mercantile middle class to develop.

John was always in the shadow of his brother Richard; was considered petulent, self pitying, flew into rages ,resentful and managed to lose the royal treasure in the Wash. Brown’s similarity to John is quite startling. At least John lost the gold to the sea in an act of God, Brown actually sold it when it was at very low price.

Nice tale, I suppose the moral is that socialism will never emerge from the ruling class.

“I wouldn’t argue that bankers have “duty” to maximize their profits, merely that prices will adjust so that the tax is partially passed on to bank customers. All I wish to argue is that the statement “The Robin Hood tax will not be passed on to consumers” is false. That’s it.”

I agree. To follow the logic through, the ways in which “prices will adjust” is not some random act of fate, but will be to quite a large degree the decision of the people who run the banks (allowing for unintended consequences etc.). Specifically, they can decide the balance between the extent to which they accept that they personally end up contributing, and the extent to which they try to maintain their current standard of living and getting the consumer to pay instead.

The corollary to Tim W’s point that it is people, not corporations, who pay taxes is that it will be particular individuals who decide how much to increase, say, bank charges. There seems to be an idea that the people who run the banks can just increase charges, pass the cost on, and that there won’t be any negative consequences for them.

If they try to stick Middle England with the whole of the bill for the Robin Hood tax, then the backlash will set the two main parts of the conservative coalition against each other and create a centre-left electoral majority (as happened in the USA after 1932). If they have any sense, they will pass as little of the cost as they can on to ordinary people, in which case their wealth goes to help fund public services and reducing global poverty.

[3] Thanks for that link. Why the Treasury doesn’t take Dillow on to sort them – and us – out I’ve no idea. Economic illiteracy, I suspect.

“To follow the logic through, the ways in which “prices will adjust” is not some random act of fate, but will be to quite a large degree the decision of the people who run the banks (allowing for unintended consequences etc.). Specifically, they can decide the balance between the extent to which they accept that they personally end up contributing, and the extent to which they try to maintain their current standard of living and getting the consumer to pay instead.”

No! Wrong!

Tax incidence arguments do not depend upon what people try to do about them.

They depend upon what happens as a result of the tax.

With this transactions tax. This makes dealing in foreign exchange more expensive (this is the damn point of a Tobin Tax, of which this is an extension, you recall?).

Therefore all people who make a foreign exchange transaction pay more and thus bear some of the burden of the tax.

Giles pointed this out on another thread. Current FX spreads are around 2 basis points. Add a 5 bps tax, reduce liquidity (which is the aim, recall?) and spreads move out to, say 20 bps.

Thus everyone pays 20 bps instead of 2 bps for an FX transaction.

This has precisely sweet fa to do with what FX traders try to pay themselves, banks try to make in profits or anything like that.

You are still entirely missing the point about tax incidence.

Yes, I realise this is a spoof:

“There was no inheritance tax in these golden days”

But you seem ignorant of how the feudal system worked.

“Inheritance and Wardship Another area of feudal custom that required definition was that of the succession to fiefs. When fiefs became hereditary, the lord reserved an inheritance tax called a relief, and the size of the relief was often a matter of conflict. Again, in England, the Magna Carta established the relief as £100 for a barony and £5 for a knight’s fee; ”

They very much did have inheritance taxes.

Robin Hood: stole from the illegitimate, wasteful government and gave to the more deserving poor. Left merchants and other productive people alone, unless I missed something in the story.

remember the introduction of air passenger duty? Some airlines just raised their prices without really mentioning this extra tax. Easyjet explitly showed the addition of this “unfair government tax” and how it increased the cost of the flight. The bakders will not get a choice about who bears the tax….it will simply be added onto all transactions.

To add to Edward@12 can we not forget that he was from Notts?

BIG UP THE NG MASSIVE!

I think you’re confusing Notts with Lincolnshire…

Yet again mods, not me @ 16!

daniel,

yup. Unity et al are very good at sorting out the wheat from the chaff…