The subject of bank taxes has evidently been under discussion for the last several years. The research on this topic identified numerous articles dealing with G20 meetings where the topic was discussed but with no resolution.
"Excerpt
Shortsighted to oppose bank tax, IMF warns
Sat Apr 24, 2011
WASHINGTON (Reuters) – Countries that weathered the global economic crisis with their financial systems relatively unscathed are being shortsighted by opposing a global bank levy, the IMF’s chief said on Saturday.
International Monetary Fund Managing Director Dominique Strauss-Kahn suggested a bank tax would be helpful in preparing for crises that could strike anywhere and indirectly criticized countries that might think they would never feel the brunt of a downturn."
"Excerpt
Time for an international bank tax?
Jun 7th 2010, 14:51 by R.A. | WASHINGTON
In talks over the weekend, the G20 opted to abandon plans (for now at least) for an internationally coordinated bank tax, thanks in part to strong opposition from countries like Japan, Brazil, and Canada, whose banks did not need public assistance."
The reference to the Tobin tax is very interesting. Here is the definition from Wikipedia.
"A Tobin tax, suggested by Nobel Laureate economist James Tobin, was originally defined as a tax on all spot conversions of one currency into another. The tax is intended to put a penalty on short-term financial round-trip excursions into another currency."
[i]Wikipedia has an extremely informative review of this tax. One of the sections that I found extremely interesting was the technical difficulties in tracking currency exchanges for the application of the taxes. Here is the excerpt dealing with that section. [/i]
"Is the tax easy to avoid?
[edit] Technical feasibility
Although Tobin had said his own tax idea was unfeasible in practice, Joseph Stiglitz, former Senior Vice President and Chief Economist of the World Bank, said, on October 5, 2009, that modern technology meant that was no longer the case. Stiglitz said, the tax is "much more feasible today" than a few decades ago, when Tobin recanted.
However, on November 7, 2009, at the G20 finance ministers summit in Scotland, the head of the International Monetary Fund, Dominique Strauss-Khan, said, "transactions are very difficult to measure and so it's very easy to avoid a transaction tax."
Nevertheless in early December 2009, economist Stephany Griffith-Jones agreed that the "greater centralisation and automisation of the exchanges' and banks' clearing and settlements systems ... makes avoidance of payment more difficult and less desirable."
In January, 2010, feasibility of the tax was supported and clarified by researchers Rodney Schmidt, Stephan Schulmeister and Bruno Jetin who noted “it is technically easy to collect a financial tax from exchanges ... transactions taxes can be collected by the central counterparty at the point of the trade, or automatically in the clearing or settlement process."
(All large-value financial transactions go through three steps. First dealers agree to a trade; then the dealers’ banks match the two sides of the trade through an electronic central clearing system; and finally, the two individual financial instruments are transferred simultaneously to a central settlement system. Thus a tax can be collected at the few places where all trades are ultimately cleared or settled."
The Dodd-Frank reform bill has closed a big loophole in the US, when the ledger to ledger transactions were disallowed. The ledger to ledger transfer was the internal transfer of money from one account to another within the same banking system. The transfer now has to use the Fedwire network (federal reserve wire network) or Chips (Clearing House Interbank Payments System) which means,big brother is seeing and tracking it.
The reform bill also disallowed the transfer of currency exchange direct into gold or silver. If you recall, Dinar Trade (Ali) had it set up that you could exchange your dinars for gold. Can't do that anymore, have to exchange first for USD, then buy the gold.
It is also interesting that Ali discontinued wire transfers all together, followed by closing his business doors in the US. There is now another dinar trader (Dinar Banker) that has also discontinued wire transfers.
