UK Tobin Tax
[Re: It’s not good – but EU’s Tobin tax won’t be as bad as feared, Friday]
It’s wrong to obsess over a 0.1 per cent Tobin tax on shares trading. We are already paying 0.5 per cent tax on shares and 0.5 per cent on options purchases through stamp duty. Then there are mergers and acquisitions fees for larger transactions. There should really be none of these if we want to compete with the US. Although this article says that a Tobin Tax will depress the value of pensions, this is already happening. A British saver, making the same contributions over the same period of time, will have a smaller pot at retirement than a Dutch citizen. We must stop obsessing with EU legislation, and put our own problems to right.
Cost of stimulus
[Re: Ultra-easy Bank of England policy is worsening economic inequality, yesterday]
Ros Altmann makes an excellent case for taking into account the societal consequences of ultra-easy monetary policy. But she should really go further. Yes, people with big mortgages and big debts are sleeping more peacefully at night while those with small savings are seeing their capital diminish in real terms. But worse, very low interest rates and huge property bubbles are locking up money in unsustainable assets. We would all do better if people who had borrowed recklessly (on their mortgages or otherwise) were forced to reckon with true market rates, and were not kept afloat by central bank stimulus.
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