The Robin Hood Tax is illegal so yah boo suckers
INTERESTING news for those who support the Robin Hood Tax, or as it’s really called, the European Union’s Financial Transactions Tax. It’s illegal.
So much for Europe’s great sprint to tax financial transactions. In a leaked opinion dated September 6, the EU Council’s Legal Service argues that the proposed levy is “not compatible” with European Union treaties because it “infringes upon the taxing competences of non participating Member States.” Translated from the legalese, that means France, say, would be collecting revenue on certain trades conducted in the U.K. though the U.K. government hasn’t agreed to the tax.
So that would appear to be that. Another very stupid idea shot down because the people proposing it didn’t even bother to work out whether it was possible to do what they proposed.
And it was indeed a very stupid idea. I actually gave evidence to the House of Lords Committee that looked into it and all I had to do was point people to the EU’s own report on the subject.
The problem is, or at least this problem is among many others, that it wouldn’t actually raise any money. Typically an EU state takes between 40 and 50% of all economic activity in tax. The FTT was estimated to shrink GDP by just under 2%. So, 50% of 2% is 1% of GDP: that’s how much less tax would be collected as a result of the effects of the FTT.
The FTT itself would of course raise some money. But that was estimated at 0.1% of GDP. So, we’d lose 1% in tax revenues and gain 0.1% for a net loss of 0.9%. Which doesn’t really sound very sensible, does it, introduce a new tax so that we can actually have less tax revenue to spend on schioolsnhospitals.
Thankfully the promoters of this idea were swo incompetent that not only didn’t they not understand the economics of what they were promoting they didn’t understand that it would be illegal.
Phew.
Posted: 25th, September 2013 | In: Money Comment (1) | TrackBack | Permalink
