Financial Transaction Tax Won't Help Europe Get Back On Track

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By Robert A. Green, CPA and founder and CEO of Green & Company Inc. (GreenTraderTax.com and GreenTraderFunds.com)
The financial news in Europe is doom and gloom these days, with Greece headed for default. EU bailout fire trucks are being driven by auditors rather than firemen, and the fire trucks must stop off in each European capital to pick up another fireman first. Will the Greece house burn down before they arrive? Probably. One fire-chief, EC president Jose Manuel Barroso wants to collect fire service fees (
FTT
) even before putting out the fire. Per tax publisher RIA, “European Commission proposes tax on financial transactions: The European Commission, September 28, formally adopted a proposal for a bloc-wide financial transaction tax (
FTT
) that would be levied on all transactions between financial institutions that involve financial instruments where at least one party to the transaction is located in the EU. Under the proposal, unveiled by EC president Jose Manuel Barroso, the FTT would be imposed on the exchange of shares and bonds at a rate not lower than 0.1 percent and on derivative contracts, at a rate not lower than 0.01 percent. Member States could elect to impose the FTT at higher rates. An accompanying press release said that the FTT could generate EUR 57 billion per year (USD 77 billion), which the Commission proposed would come into effect on January 1, 2014. “It is time for the financial sector to make a contribution back to society,” Barroso said, suggesting that the imposition of the tax would be fair in light of EUR 4.6 trillion that taxpayers were required to provide to help banks through the recent financial crisis.” If Europe can hold it together with the Greece and PIIGS fiscal-train wreck, then Franco-German-Brussels EU federalists may get their FTT in the euro-zone or entire EU-wide. They need an EU tax to solidify and pay for an EU-fiscal union. If German taxpayers have to reluctantly pay for Greece's cheating and over-spending, then German political officials absolutely demand control as bankers to Europe. For some, that requires a fiscal union and EU treaty amendments accordingly. Franco-German-Brussels political leaders clearly don't like traders – short-seller gangs – and consider them dangerous and socially useless. Germans even called traders psychopaths recently in Der Spiegel. They will continue short-selling bans, push for FTT and harsher regulations on banks and trading. Trading and banks are valued in countries where these activities are huge contributors to the economy, jobs, taxes and culture. Even though ex-UK PM Gordon Brown (Labor) first pushed for an FTT in the EU and G-20 a few years back, a new Tory-PM Cameron-led UK is dead set against FTT and bashing banks and traders. Even UK Labor may come to their senses and realize that FTT could sink the London economy and then the entire UK. The U.S., Canada and Netherlands also value financial entrepreneurialism conducted by banks and traders and they won't allow FTT. Thankfully, most people realize that FTT is mutual destruction like with nuclear bombs – it could cause financial market destruction. You need mutual deterrence, so no one can do FTT unless everyone does it. FTT is so destructive, bankers, traders and investors will find countries to avoid it. Back to on the other hand, if Europe can't hold their fiscal-train wreck together – the likely scenario – train conductor Barroso will drive off a cliff and crash by taking the FTT route. Barroso and crew think FTT is a shining light of safety, but it's a mirage and lure to financial market and economic destruction. Franco-German-Brussels dictocrats have gone too far. They are the greedy ones trying to pick the pockets of bankers and traders. And feigning for the world's poor is cruel, when they will pocket FTT monies for their own fat-cat government over-spending ways and spend little on the poor. The FTT nuclear option will be their death Nell. It shows outrageous desperation and it's a sign they are not holding their EU scheme together.
By Robert A. Green, CPA and founder and CEO of Green & Company Inc. (GreenTraderTax.com and GreenTraderFunds.com)
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Posted In: NewsPoliticsEconomicsGeneralbanksEuropeFTTJose Manuel Barrosotaxestrading
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