How exactly is not having this extremely speculative stock and currency trading running at the timespan of milliseconds became ‘having to do everything for themselves’? Or are we speaking of the market where i buy groceries?
Both are parts of one continuum. Somewhere in the middle is e.g. a possibility of making billions by creating Google.
A proper tax can make a part of this continuum mostly unprofitable. We just better be careful not to remove unnecessarily big part. Good luck finding a rational solution for such politically charged topic!
I think you need to justify the “needless” in your description of such back-and-forth speculative trading, as it a) has gone unquestioned b) is not self-evident, and c) otherwise begs the question about whether we need to actually do anything about it at all.
Seems generally correct at the first sight, but to be more sure about it, I would like to read an analysis by an economist who is able to consider more side effects than I am aware of.
The specific impact on society could also depend on many small details, like how exactly is the tax specified, what exceptions are there, how exactly the tax must be documented and paid, in international business how is it decided which government will get the tax, etc.
For example if A must pay 1% tax when selling something to B, and then B must pay 1% tax when selling the same thing to C, would it be possible to create some arbitrage system that would convert it to only one transaction from A to C, thus avoiding paying half of the tax? What if people only did business with virtual dollars, and once in a month converted those virtual dollars to the real dollars, paying the 1% tax only for real dollars that change hands? Would such system allow to replicate the current nanosecond stock trading, making this tax mostly meaningless?
On the hand, if the law would tax every virtual currency, it could end with World of Warcraft players having to include every XP gained for killing a murloc into their tax report. Perhaps a tax expert would be required to estimate the value of LW karma in dollars, too.
I am not an economist, nor do I play one on TV. My current studies (mostly maths, modelling and statistics) do contain a sizeable econ component, however, so I pay attention to these things.
I also have plenty of other things I could be doing with my time. Would you appreciate me talking at length about the pros and cons of financial transaction taxes?
Would such system allow to replicate the current nanosecond stock trading, making this tax mostly meaningless?
This back-n-forth trading can probably only exist if the rules of it are actively enforced by governments acting against own interest on money of third parties (taxpayers). I don’t think that this system can be recreated by bunch of self interested agents. Let the virtual currency be, my taxes won’t be paying for stability of that currency or for enforcement of any kind of rules on it. For the libertarian dream there must be a big badass government enforcing zillion laws and regulations against it’s own interest. Take that out and the dream evaporates.
Both are parts of one continuum. Somewhere in the middle is e.g. a possibility of making billions by creating Google.
A proper tax can make a part of this continuum mostly unprofitable. We just better be careful not to remove unnecessarily big part. Good luck finding a rational solution for such politically charged topic!
Well, one percent tax would eliminate very huge fraction of needless back and forth speculative trading, while doing nothing to hurt Google.
I think you need to justify the “needless” in your description of such back-and-forth speculative trading, as it a) has gone unquestioned b) is not self-evident, and c) otherwise begs the question about whether we need to actually do anything about it at all.
Seems generally correct at the first sight, but to be more sure about it, I would like to read an analysis by an economist who is able to consider more side effects than I am aware of.
The specific impact on society could also depend on many small details, like how exactly is the tax specified, what exceptions are there, how exactly the tax must be documented and paid, in international business how is it decided which government will get the tax, etc.
For example if A must pay 1% tax when selling something to B, and then B must pay 1% tax when selling the same thing to C, would it be possible to create some arbitrage system that would convert it to only one transaction from A to C, thus avoiding paying half of the tax? What if people only did business with virtual dollars, and once in a month converted those virtual dollars to the real dollars, paying the 1% tax only for real dollars that change hands? Would such system allow to replicate the current nanosecond stock trading, making this tax mostly meaningless?
On the hand, if the law would tax every virtual currency, it could end with World of Warcraft players having to include every XP gained for killing a murloc into their tax report. Perhaps a tax expert would be required to estimate the value of LW karma in dollars, too.
I am not an economist, nor do I play one on TV. My current studies (mostly maths, modelling and statistics) do contain a sizeable econ component, however, so I pay attention to these things.
I also have plenty of other things I could be doing with my time. Would you appreciate me talking at length about the pros and cons of financial transaction taxes?
Yes, please!
I would, if you have something interesting to say.
This back-n-forth trading can probably only exist if the rules of it are actively enforced by governments acting against own interest on money of third parties (taxpayers). I don’t think that this system can be recreated by bunch of self interested agents. Let the virtual currency be, my taxes won’t be paying for stability of that currency or for enforcement of any kind of rules on it. For the libertarian dream there must be a big badass government enforcing zillion laws and regulations against it’s own interest. Take that out and the dream evaporates.