(Before It's News)
One can easily understand the political appeal of such taxes, but also that all these could have unexpected consequences, many quite contrarian to the initial objectives.
That said, let me remind you of the financial sector’s “risk-weighted capital requirements for banks” tax; essentially based on assigning to the Sovereign a 0% risk weight and to We the People one of 100%.
That tax allows governments to collect revenues through the not so transparent channel of having more and cheaper access to bank credit. Unfortunately most of that tax is not paid by the rich and wealthy, but by the not wealthy SMEs and entrepreneurs, by means of lesser and more expensive access to bank credit.
Not only is it an immensely regressive tax, the AAArisktocracy is risk-weighted at only 20%, but, as an “unexpected that should have been expected consequence”, it also ends up causing stagnation that diminishes government ordinary tax revenues.
Even worse, that tax stimulates banks into creating excessive exposures to what has always been more dangerous to the stability of the sector, namely what has ex ante been perceived as very safe, but that ex post could turn out to be very risky.
Sir, compared to this tax, all other financial transactions taxes proposed, seems almost irrelevant.