NationStates Jolt Archive

At the moment, every day more than 1.9 trillion US dollars are moving around the world in foreign exchange financial markets every single day.

That's $1,900,000,000,000.

Do you think it would be a good idea to put a 0.01% tax on those transactions, and give the money to the various economic development agencies in the world? Unless my maths is really bad, that would be about 190 million dollars each day. Or almost 70 billion a year.

It would basically eliminate the need for government aid, and it would allow the 3rd world to benefit at least a little bit from the incredible wealth we enjoy.

Wouldn't that be a good thing for anti-globalisation protestors to push for? It's a real-world policy that one can clearly calculate benefits and costs for and which would actually be able to do something worthwhile.

Sounds good to me. What's a tobin?

Who would collect those taxes, and how would you assess them in this age of instant transfers around the globe?

Wouldn't that be a good thing for anti-globalisation protestors to push for?Indeed. Which is why they are pushing for it.

But how would you collect the tax and who would allocate it? It would be a good idea to collect a small additional tax to help development around the world, but it would be very difficult to determine who gets the money, especially if the people allocating it have a vested interest in diverting it to certain areas.

Assuming you can assess and collect them easily, then yes, it's a good idea. Though I think you'll find that's easier said than done.

Another idea I heard from somewhere (really not got a clue where), is that every 29th February, everyone in developed countries gives their day's pay to charity.

After a few quick calculations, it seems that if just American and British workers did this (and assuming the average wage in America is similar to that in Britain - £22500 - and there's a similar proportion of the population in employment (about 50%, I believe)), charity would gain approximately £2 billion each year. Not in the same region as $70bn, but enough to make something of a difference. Plus it might be easier to collect, especially if it's taken away from a worker's pay in the same way income tax is.

Sounds good to me. What's a tobin?
http://en.wikipedia.org/wiki/James_Tobin

Who would collect those taxes, and how would you assess them in this age of instant transfers around the globe?
Well, that's for the politicians to figure out, I guess. Several countries have laws regarding something like this already, but are waiting for an international agreement for them to kick in.

The World Bank and IMF obviously come to mind and various UN Development Agencies.

Indeed. Which is why they are pushing for it.
I suppose there are two types. Serious people and people with ski masks who protest G8 meetings. I meant the latter, and I doubt that those people would have any idea what globalisation even is to begin with.

Doesn't sound bad on the surface but I would question who collected the money and how it was distributed. I don't believe this could be a UN project because of the way they handled the oil for food program. Would have to be a neutral transparent organization.

Doesn't sound bad on the surface but I would question who collected the money and how it was distributed. I don't believe this could be a UN project because of the way they handled the oil for food program. Would have to be a neutral transparent organization.
I'll do it. :D

Assuming you can assess and collect them easily, then yes, it's a good idea. Though I think you'll find that's easier said than done.

Another idea I heard from somewhere (really not got a clue where), is that every 29th February, everyone in developed countries gives their day's pay to charity.

After a few quick calculations, it seems that if just American and British workers did this (and assuming the average wage in America is similar to that in Britain - £22500 - and there's a similar proportion of the population in employment (about 50%, I believe)), charity would gain approximately £2 billion each year. Not in the same region as $70bn, but enough to make something of a difference. Plus it might be easier to collect, especially if it's taken away from a worker's pay in the same way income tax is.

Check your calender buddy.

Check your calender buddy.

Some years, February has 29 days.

I would guess that that was the reason for choosing the date.

I suppose there are two types. Serious people and people with ski masks who protest G8 meetings.

The two are not mutually exclusive.

I don't believe this could be a UN project because of the way they handled the oil for food program.
The oil for food program was a political program though (I don't think any of the normal UN organisations handled it). I'm thinking of giving the money to UNICEF, UNESCO, WHO and UNDP.

Those organisations are fairly trustworthy, I think.

The two are not mutually exclusive.
Yeah, they're serious in the same way that an ape is really civilised. Until it throws poo at people.

I suppose there are two types. Serious people and people with ski masks who protest G8 meetings. I meant the latter, and I doubt that those people would have any idea what globalisation even is to begin with.I think you're way off with that assumption. Honestly, I'm more than sure society at large would still have no idea what globalisation even is without those people with ski masks protesting G8 meetings.

Anti-globalisation protests currently still are about the most "revolutionary" (I'm putting it in quotes because it feels melodramatic saying it but that doesn't make it less true) movement around and they're only just beginning.

I for one don't put much trust in global capitalism reigning itself in, so someone's gotta try and take on its perversions. It's a David against Goliath battle to say the least and if it takes ski masks then so be it. Things will get a lot worse if nothing changes, so forgive me if I think that this is a case where the people (esp. those in power) have to be shook up first so they even start to think about acting and sending in the "serious people" in the smart suits.

Some years, February has 29 days.

I would guess that that was the reason for choosing the date.

Yes, but that would mean 2 billion every 4 years, not every year.

Not that it matters, of course. 2 billion is 2 billion. Just helping him fix his math.

The oil for food program was a political program though (I don't think any of the normal UN organisations handled it). I'm thinking of giving the money to UNICEF, UNESCO, WHO and UNDP.

I think agriculture may be the most important target for these funds, since ultimately one of the biggest problems is the inability of farmers to increase agricultural productivity and emerge from subsistence farming with the goal being healthy urbanization and the development of a true middle class.

The next big one would be infrastructure, obviously, followed by education. Other issues like desertification and deforestation could be addressed if these problems were also taken care of.

Yeah, they're serious in the same way that an ape is really civilised. Until it throws poo at people.

http://en.wikipedia.org/wiki/No_True_Scotsman

At the moment, every day more than 1.9 trillion US dollars are moving around the world in foreign exchange financial markets every single day.

That's $1,900,000,000,000.

Do you think it would be a good idea to put a 0.01% tax on those transactions, and give the money to the various economic development agencies in the world? Unless my maths is really bad, that would be about 190 million dollars each day. Or almost 70 billion a year.

It would basically eliminate the need for government aid, and it would allow the 3rd world to benefit at least a little bit from the incredible wealth we enjoy.

Wouldn't that be a good thing for anti-globalisation protestors to push for? It's a real-world policy that one can clearly calculate benefits and costs for and which would actually be able to do something worthwhile.A tobin tax on currency trading is not feasible. This is in part why I hate currency trading. The vast majority of currency trading is purely speculative and serves no material purpose. I seem to remember that 50% of currency trading takes place at the 6th decimal place level. Meaning that a 0.01% tax would completely wipe out currency trading at this level. The wiki also seems to be saying that only 2% of currency trading is ever for retail (meaning it takes place at such a level that it would not be significantly effected by this tax).

For me this gives an estimate of about $4million/day in tax. Not $190million.

I support such taxes for various reasons, including, but not limited to, that they would discourage currency speculation.

A tobin tax on currency trading is not feasible. This is in part why I hate currency trading. The vast majority of currency trading is purely speculative and serves no material purpose. I seem to remember that 50% of currency trading takes place at the 6th decimal place level. Meaning that a 0.01% tax would completely wipe out currency trading at this level. That would be one of the benefits of such a tax.

I support such taxes for various reasons, including, but not limited to, that they would discourage currency speculation.

That would be one of the benefits of such a tax.You couldn't just wipe out currency speculation in one day. The financial services have come to rely a great deal on currency speculation. They make huge amounts of money, and to suddenly cut off this area of investment for the banks. This would be bad for two reasons.

1) The banks would suffer hard hits to profits, which could cause panic in the markets, and maybe even a bankrun. Very definately not good.

2) It would also free up huge amounts of capital that the banks would otherwise have to invest in. The last time western banks had a huge glut of money it led to the third world debt crisis. Perhaps banks investing in currency is the lesser of two evils.

I thought this thread said, 'A Toblerone Tax?'.
For this case I'm definitely against.

Yes, but that would mean 2 billion every 4 years, not every year.

Not that it matters, of course. 2 billion is 2 billion. Just helping him fix his math.
Actually, it is 2 billion every year - I divided the amount produced every 29th February by 4.

Considering that a huge amount of that money would be used to buy oil (hence 'petrodollar') itwould hugely affect the U.S economy. A lot of people who would normally buy oil in USD would clamour to use another currency and when that happens the value of U.S currency would be able to slump a lot easier.

At the moment, every day more than 1.9 trillion US dollars are moving around the world in foreign exchange financial markets every single day.

That's $1,900,000,000,000.

Do you think it would be a good idea to put a 0.01% tax on those transactions, and give the money to the various economic development agencies in the world? Unless my maths is really bad, that would be about 190 million dollars each day. Or almost 70 billion a year.

It would basically eliminate the need for government aid, and it would allow the 3rd world to benefit at least a little bit from the incredible wealth we enjoy.

Wouldn't that be a good thing for anti-globalisation protestors to push for? It's a real-world policy that one can clearly calculate benefits and costs for and which would actually be able to do something worthwhile.

ARGH!
Stupid American short-scale trillion...
Preserve tradition and use the long-scale! Use 10^18 as one trillion!
:D

Ilaer

Sounds good to me. What's a tobin?

TOOBIN!

http://en.wikipedia.org/wiki/Toobin'

ARGH!
Stupid American short-scale trillion...
Preserve tradition and use the long-scale! Use 10^18 as one trillion!
:D

Ilaer

But computer processors would not have sounded as powerful.

Think about computer hardware propaganda :( .

At the moment, every day more than 1.9 trillion US dollars are moving around the world in foreign exchange financial markets every single day.

That's $1,900,000,000,000.

Do you think it would be a good idea to put a 0.01% tax on those transactions, and give the money to the various economic development agencies in the world? Unless my maths is really bad, that would be about 190 million dollars each day. Or almost 70 billion a year.
My first reaction:

No, that's a huge amount of money you're wasting. I oppose foreign aid at the best of times, and now you're creating a whole new bureaucracy with an interest in perpetuating it.

If ever you have a problem you want never to go away, create a government department dedicated to dealing with it. Since everyone who works their owes their livelihood to the continued existence of the problem, it will never go away.

My second reaction:

That would be a really expensive tax to administer. If you do it (and I don't want you to), you have to pay for the tax out of its own revenues. So that $1.9 billion you collect has to then cover the costs of collecting itself, and the net you can distribute. At least then it would only cost $1.9 billion.

But computer processors would not have sounded as powerful.

Think about computer hardware propaganda :( .

That's another thing: use proper powers of two, stupid adverts. I don't want to be told that my hard drive is 320 gigabytes when in fact it's 298 because you used powers of ten, you lying illegitimate lovechildren.

Ilaer

You couldn't just wipe out currency speculation in one day. The financial services have come to rely a great deal on currency speculation. They make huge amounts of money, and to suddenly cut off this area of investment for the banks. This would be bad for two reasons.

1) The banks would suffer hard hits to profits, which could cause panic in the markets, and maybe even a bankrun. Very definately not good.

2) It would also free up huge amounts of capital that the banks would otherwise have to invest in. The last time western banks had a huge glut of money it led to the third world debt crisis. Perhaps banks investing in currency is the lesser of two evils.It wouldn't wipe out speculation, it would simply discourage it. At most, it would wipe out short-term speculation, and encourage long-term speculation.

That's another thing: use proper powers of two, stupid adverts. I don't want to be told that my hard drive is 320 gigabytes when in fact it's 298 because you used powers of ten, you lying illegitimate lovechildren.

Ilaer

But that doesn't lend itself well to making the consumer as ignorant and thus more likely to buy crappy stuff.

Just imagine all the problem when/if we get quantum computer. Trying to properly state how much data something has when it is based on four states rather than two and the fact the by examining it you already get a different total.