Financial Transaction Tax

Goldman Sachs is one of the biggest building in many major cities and their CEOs received huge bonuses after being bailed out by the taxpayer

Goldman Sachs rules the world

Financial Transaction Tax.

In line with our policy to tax unearned income not earned income we would impose a Financial Transaction Tax. Money was intended as a method by which goods and services are distributed at an agreed value. Money was never meant to be a commodity in itself.
In 2008, prior to the global financial crisis, world trade in various financial commodities was 74 times higher than global GDP. Daily turnover for global currency trade as of April 2010 was $4 trillion ($1,460 trillion a year). This speculative activity is destabilising the world economy and creating speculative bubbles that ultimately hurt grassroots people.
The world of international finance has become a global casino where investors seeking quick profits bet huge sums of money around the clock.High frequency trading has got out of control and one commentator suggested our financial system “needs some sand in the gears to slow it down.” Wildly fluctuating currency values play havoc with exporters confidence to create jobs.

More than US$4 trillion is traded every day, and 95% of this is from speculators while 5% is to facilitate real trade. An explosion of high speed, high frequency trading carried out by computers is causing an increasing number of ‘flash crashes’ and undermining markets’ role in efficiently allocating resources.
The Kiwi dollar is currently the tenth most traded currencies in the world.
A thousand economists wrote to G20 finance ministers meeting in Washington in April 2011 urging them to tax speculators to help the world’s poor. In a show of unity rare in the economics profession, the experts from 53 countries describe the so-called “Robin Hood tax” or Tobin Tax on transactions in financial markets as “an idea that has come of age”.Supporters range from Bill Gates to the Archbishop of Canterbury.

We support a tax on currency speculation to limit high frequency trading. This was originally called the Tobin Tax but more recently called the Robin Hood Tax or Hone Heke Tax. This places a small tax on all financial trades, raises considerable revenue and is highly effective. It has a negligible effect on real investment but will render most high-speed computerised trading unprofitable.
The current size of the derivatives market is now a mind-blowing $1.4 quadrillion.  which is 23 times the value of the world’s GDP. How big is that? If you started counting at one dollar per second, it would take 32 million years to count to one quadrillion dollars.

FTT is administered by the banks. The tax will be collected through data bank facilities on every bank transaction at point of withdrawal. The percentages rates that are being talked about internationally for Financial Transaction Taxes are very small, ranging from 1% to as low as 0.05%. We suggest putting a .01% FTT on all trades of derivatives and a 0.1% FTT on all trades of stocks and bonds.
The Robin Hood Tax is justice. The banks can afford it. The systems are in place to collect it. It won’t negatively affect ordinary members of the public, their bank accounts or their savings. It’s fair, it’s timely, and it’s possible. The feral banking economy must to be brought under control.
A Financial Transaction Tax (FTT) would be like GST for the financial sector. In NZ financial services do not currently incur GST. FTTs collected via the electronic bank settlement process would be impossible to avoid.

Resource rentals

b)             Resource Rentals
Untaxing the productive economy creates wealth while taxing nature conserves the planet. We would tax the use of land, metals, oil, electromagnetic waves, water, agricultural quotas, and any resource which is part of the commons. The principle is that we pay for what we hold or take, but not what we do or make (unless we make them using precious resources or the product is environmentally or socially harmful.)

All private companies which sell basic natural resources will pay an annual rental to the public purse.

If hydro electric power stations currently owned by Government were sold to private owners, then the new owners would have to pay a water tax for our public revenue.

Water tax. The worldwide demand for water is predicted to increase steeply and we have no reason to believe New Zealand will be an exception to this trend.

The irrigation tax proposed by the Greens is a good example of a resource tax. It is a tax on the use of a scarce common resource, water for personal gain. If farmers were taxed according to the resources they used, then water intensive farming would not be as profitable as dry farming. Dairy farms would give way to sheep and beef farms and horticulture, thus reversing the trend to dried up and polluted rivers. It would also mean overseas owned utilities and monoculture agribusiness would start to pay their fair share of tax.

Likewise a resource tax on scarce resources like oil would include petroleum based fertilisers and pesticides. This  would hasten the move to organics. Another effect would be to minimise taxes for sustainable farming and consumers with a low carbon footprint. Changing to resource taxes would simplify the tax system.

China has of late moved towards a rare earth tax and has adjusted its coal taxes upwards. Australia is proposing a tax on mining.