Why is Barroso lying to us about the Robin Hood Tax?
A CERTAIN Mr. Barroso tells us today that the Robin Hood Tax is a really wonderful idea:
Mr Barroso said the legal requirements and conditions had been met and he did not believe the tax would undermine the single market if it were imposed across limited parts of the European Union. “I am delighted to see that 10 member states have indicated their willingness to participate in a common financial transaction tax,” he said. “This tax can raise billions of euros of much-needed revenue for member states in these difficult times.”
There are a number of problems with the whole idea of this tax but the first and most obvious is that it won’t actually raise any money. Far from it in fact, it will reduce total government revenues.
The clue is in the basic briefing paper that the European Union itself issued. They point out that as a result of the FTT then the EU economy will be 1.76% smaller than it would otherwise have been. Given that some 50% or so of the marginal changes in the economy is tax (given that EU governments collect 40-50% of GDP in tax this must be true) That means that we’re going to get a fall, from where it would have been without the tax, in revenues of some 0.8% of GDP.
The tax is estimated to collect 0.1% of GDP. So, we get in 0.1%, we lose 0.8%. This isn’t a rise in tax revenues. This is a fall.
Which leaves us with the big question. Why is this man lying to us? Or is it that he’s simply too ignorant to understand the briefing paper put out by his own organisation?
Posted: 24th, October 2012 | In: Money, Politicians Comment | TrackBack | Permalink
