rehctub didn't specifically say he supported the Robin Hood tax, only a “transaction tax” “...on every single, every day transaction...we could abolish EVERY OTHER FORM OF TAX.”

The article actually proposes taxing only “financial” transactions (which confusingly only means currency and stock trading. Aren't all deposits and withdrawals “financial transactions”?)

“computerisation of transactions has turned the logistics of collecting the tax from being quite complicated to very straightforward”

Yet absurdly the proponent doesn't want to use this easy method to tax *all* transactions and replace *all* other taxes.
Why the hell not?!

No Mr Hood will only tax “financial” transactions and it'll just be an “additional source of revenue” (i.e. Just *another* tax, not a replacement).

This is just another one of those Eat-The-Rich-Quick schemes promoted by envious didn't-think-hard-enough Communist losers.

Want to tax the rich? Well this tax *won't* tax the purchase of their mansions, their fur coats, their Tiffany tiaras, their Rolls Royces, their Karl Lagerfeld suits, their liposuction or their private jet, so the rich are going to still have a sweet old time, baby.

A tax on *all* domestic transactions (deposits and withdrawals) would tax all these things *and* stock exchange trades as well, since trading must be done using a BANK ACCOUNT!

“Businesses don't pay taxes. We do.”

Are you living in a parallel universe?
Company tax, payroll tax, business income tax (in the owners' personal tax returns), capital gains tax, excise taxes, customs duties, fringe benefits tax, stamp duties, property rates.
You could also consider compulsory superannuation a “tax”.

Yes, these costs are usually passed on to the consumer in the price we pay, but the taxes are *paid by the business*.
Businesses also must do all the paperwork and payments regarding GST (even though “we” pay it).

“would it be fair to say that any change in the taxation system will affect us all, in direct proportion to the volume of goods and services we consume”

Yes.

“it would make sense for the Banks to simply outsource their high-value transactions overseas”

And I said that would have to be made illegal. Solved.

Dear Shockadelic,

<<“and foreign cash in particular”
Not if it's explicitly prohibited in law, and it will be.>>

So that's what I asked in the first place: Are you going to introduce prohibitions, left right and center - I thought the answer was in the negative, but I was wrong.

Yes, people will go for cash. If people have legal access to unlimited Australian cash, then they will use it (including in supermarkets, which will start using cash to pay their employees and suppliers). If government refuses to print more cash due to increased demand, then cash will become more precious and have more buying power, while electronic money will depreciate: it will either buy less, or will be refused altogether by shop-keepers.

So now the government will have to ban cash, so people will turn to barter and/or use personal IOU's, even bank cheques that will never actually be turned to a bank (soon there won't be any banks left anyway), but passed from hand to hand. Of course gold/silver/metals will have to be banned too. Mines will be fenced and miners searched as they leave, those mining in open fields will be shot and you will need a certificate from the marriage-registrar to allow you to buy a wedding-ring... I suppose that fake-marriages will abound... and so will all sorts of unofficial micro-banks, and as bank-safes will be banned as well, there will be a flourish of personal safes and people who charge others for keeping valuables in their safes and guarding it.

As the government cracks down on personal promissory-notes, shelves will become empty and trade will occur beneath the floor-boards.

Eventually, barter too will be made illegal, then when people will just share freely and give each other what they need, love will also be banned: the tax-office will say: "We know you received a kiss last Wednesday - you can't fool us that you haven't paid for it..."

So this is the country you want to live in? Myself and many others will leave it while we still can!

Yuyutsu, what have you been smoking?
What's with the hysterical overreaction?

Who's going to use foreign cash?
Every time you exchange, you are charged a FEE.
That fee would be more expensive than the tax!

"Are you going to introduce prohibitions, left right and center"

No, just centre.

If you are going to have a tax system *entirely* reliant on one and only one tax, then yes, there would have to be some legal changes to make sure loopholes are closed.
But not the ridiculous extremes you dreamed up.

People could use only cash now but are reluctant to store large amounts of it for security reasons.

If businesses routinely kept thousands in cash *on their premises*, the armed robbery rate would skyrocket.
Losses from robberies would be far more detrimental than a fractional-percentage tax!
If you get robbed, you lose 100%!

People currently use less cash and more electronic, for convenience and security.
A tiny tax is not going to change behaviour much.

To minimise avoidance, you could specify in law that all salaries/wages must be paid electronically (most already do this for convenience), and all transactions over a certain amount (e.g. $500).

If you are found to break the new law, the fine would be much worse than a fractional-percentage tax, so again it's just not worth it!

People can barter right now. How many do?

Hopefully a future government will ban ludicrously hysterical straw man arguments.
Or at least offer free shock treatment for the lunatics writing them.

Dear Shockadelic,

<<A tiny tax is not going to change behaviour much.>>

A tiny tax is not going to fill the government's coffers. Unless it is substantial and painful, it's just going to be one more hassle among many.

<<To minimise avoidance, you could specify in law that all salaries/wages must be paid electronically (most already do this for convenience), and all transactions over a certain amount (e.g. $500).>>

I don't do it for avoidance (the few times I received income in cash I reported it on my tax-return), I already pay most of my purchases/services in cash, that is whenever I am present in person at the shop rather than buy something over the internet. I always for example bought my cars in cash. I rather not leave an electronic trail of information behind me, linking me with what I bought. I suppose you also want to turn those whose religion forbids them to use electronic devices into criminals?

So what you suggest amounts to forcing surveillance plus something like the Indian salt-tax, requiring people to purchase something (banking) which they do not require, a collusion between government and banks.

Beyond all, this proposed tax is most unfair, it's completely arbitrary, it distorts free markets in an irrational way of having everyone trying to minimise transactions rather than considering the deal itself. Why should one, for example, pay 5 times more on the capital of their savings if they deposit it in 5 consecutive 1-year term deposits instead of one 5-year deposit? Why should one pay tax on their savings because their bank closed the branch nearby, gave them a poor service or behaved unethically so they had to move to another bank?

Comparatively, income tax is the fairest and most logical.
(yes, certain aspects of income-tax need to be simplified: introducing a flat rate, starting at negative-tax for zero income and removing most deductions, but it's better than what you suggest even as it is)

<<People can barter right now. How many do?>>

With your new tax, everyone will.

I suspect that Yuyutsu may be much closer to the realities of a transaction tax than is evident from your assessment, Shockadelic.

>>A tiny tax is not going to change behaviour much<<

That's a very bold assertion.

Entire industries have already been established, grown and flourished on the basis that people are reluctant to pay a penny more in tax than they are obliged to. And when you consider that in order to replace all other taxes, your new system needs to raise at least $14,000 from every man, woman and child in this country, every year, the incentive to search out alternate payment methods will become a daily imperative.

But this is not the key issue.

As you have already pointed out, "all the taxes businesses pay [are] included in the shelf price", and agreed with me that "we, the consumers, the general public, are going to pay for it".

In order to get us to pay the tax that they incur on our behalf, all businesses will have to raise their prices.

Across the board.

Because you cannot in reality price-discriminate your products on the basis of the ability of the consumer to pay, so...

Those least able to pay any increase in price will be hardest hit. Exactly the people, you will note, who benefit least from the abandonment of income tax.

Your new tax system will therefore a) benefit them not at all, with your cancellation of all other taxes, but b) disadvantage them in terms of their buying power.

A piddling tax of 0.02% on my own transactions will be almost unnoticeable, especially if my income is tax free. And I suspect this will be the attitude of rich and poor alike.

But because i) the tax has to be paid somewhere, and ii) the companies who pay it will pass on those costs to the consumer, it is the consumer who will pay.

$14,000 a head.

Yuyutsu “A tiny tax is not going to fill the government's coffers”

Current exemptions, rebates, deductions would be gone.
Companies now pay 30%, but on what?
*Net* income *after* they've deducted their stock purchases, salaries (including those big executive ones), advertising marketing expenses, new product development, truck fleet costs, dividends, etc.

Under a transaction tax, there are *no* deductions, so businesses would be taxed every time they spend money or receive money.

Stock traders would also be taxed every time they buy or sell shares, not just when they make a capital gain.

Black markets and tax evasion would not be justified.
The fines would far exceed the tax, you may as well just pay the tax and stop worrying about getting prosecuted.

All of these previously untaxed transactions are now taxable, so it all adds up to a lot, even with a small tax rate.

“religion forbids them to use electronic devices”

Who are these loonies?

“forcing surveillance”

You are already under surveillance by the tax office.
You will be, whatever taxes exist.

“requiring people to purchase something (banking) which they do not require”
“With your new tax, everyone will [barter].”

Not required? Then why were they invented? Security, convenience.
Want to keep all you money in cash under the bed? Go ahead. You'll regret it.
Want to never know what anything is worth, and spend half your life haggling? Go ahead. Give yourself a headache.

“it distorts free markets”

Actually it's completely *neutral*.
No product or service or person is taxed at a greater rate than another.
Deposits and withdrawals being taxed creates *no bias* toward saving or spending, imports or exports.

Changing accounts *within* the same institution could be exempted, if circumstances make it necessary (branch closing).

If you change banks, have 16 different accounts, don't trust your family to all use the same account, that is *your* choice. With choice comes obligations.