Skip to comments.Global Taxes for Global Warfare
Posted on 05/28/2002 1:58:37 PM PDT by GluteusMax
At the "International Conference on Financing for Development," President Bush faced demands from UN Secretary-General Kofi Annan and most of the rest of the world for more foreign aid from American taxpayers for bankrupt and deadbeat Socialist and Communist regimes. Foreign potentates and their allies put enormous pressure on the Bush administration to send more American tax dollars abroad, supposedly to help the Third World. And Bush buckled. He announced $10 billion in additional foreign aid over three years.
If Bush hadn't complied, he would have been portrayed as greedy and selfish. Even with the $10 billion, the foreign aid lobby wants more. Indeed, non-governmental organizations (NGOs) at the global forum before the official UN conference passed a resolution supporting global taxes on Americans which could generate billions or trillions of dollars. There was a heavy Cuban and Marxist presence at this event. Marijuana pipes were even for sale.
Before the conference, Treasury Secretary Paul Neill had been brutally honest, noting that, "Over the last 50 years the world has spent an awful large amount of money in the name of development without a great deal of success." A 1995 U.S. Senate Foreign Relations Committee report said the cost of foreign aid for the U.S. over this period has been $2 trillion.
But after meeting with rock star Bono, a proponent of Third World "debt relief," Bush decided to expand the foreign aid giveaway. Bono also persuaded Senator Jesse Helms to his cause of writing off bad loans to bankrupt regimes. In addition, Helms, who is retiring, has emerged as an advocate of more AIDS spending on Africa. According to one report, Bono's plea for the rest of the world reduced Helms to tears.
Terry Jeffrey of Human Events newspaper is crying for American taxpayers. He suggests that foreign rock stars like Bono be taxed at high rates to offset the cost of foreign aid.
Most of the NGOs at the Global Forum resent America's success. Rather than build up foreign countries by developing their own resources in the context of capitalism and free markets, the NGOs at the Global Forum want to reduce America to their level. They want to loot America's wealth and transfer our money to the rest of the world. In the process, of course, they acquire control over other peoples' lives. That gives them power and big salaries.
Foreign Aid Sex Scandal
Tragically, evidence has been uncovered showing that the foreign assistance being provided to some countries is being used as leverage to force poor people, mostly children, to have sex with UN personnel and aid workers. Investigators found a widespread and "possibly endemic" culture of sexual exploitation of children in West African refugee camps. The UN personnel, including "peacekeepers" and others were demanding sexual favors from children, mostly girls, in exchange for food rations, shelter, education and medicine.
The targeting of refugee children occurred in Guinea, Liberia and Sierra Leone. "In all three countries," said a report from the UN High Commissioner for Refugees and Save the Children of the United Kingdom, "agency workers from international and local NGOs as well as UN agencies were reportedly the most frequent exploiters of children, often using the very humanitarian aid and services intended to benefit the refugee population as a tool of exploitation." The report stated that UN peacekeepers were "among the highest paying customers for sex with children." It said some peacekeepers would pool their money to obtain a girl and then all of them would have sex with the same child.
So foreign aid has now become an evil that is used to exploit the most vulnerable among us.
The Global Tax Plan
Extreme left and Communist forces at home and abroad are mobilizing to pressure the Bush administration to endorse even more foreign aid spending. Their ultimate goal is implementation of the Tobin Tax, named after the late Yale University economist James Tobin, who signed a letter before the November 2000 presidential election claiming that the proposed Bush tax cuts for the American people were too large. James Tobin wants higher taxes. His Tobin Tax is a tax on international currency transactions in the foreign currency markets. This has been called the world's largest financial market - between $1.2 trillion and $2 trillion a day is exchanged. Proponents call the Tobin Tax the "Robin Hood Tax" because it supposedly taxes the rich to benefit the poor. But it would affect ordinary Americans' IRAs, Mutual Funds and pensions - any vehicle with money that is invested abroad.
In a letter, the office of U.S. Ambassador to the United Nations, John Negroponte, said that, "The U.S. delegation opposed global taxation" and worked to eliminate references to that item in the final "Financing for Development" conference document. But the U.S. delegation was not completely successful. The final conference document includes language recognizing the value of exploring "innovative sources of finance." This opens the door for global taxes and a global IRS.
This means that the "last remaining superpower," the U.S., didn't have the power to resist international pressure for more foreign aid. This is a dangerous precedent. The American people have to understand that what is being proposed is a massive expansion of foreign aid to the tune of trillions of dollars.
In the U.S., welfare reform has reduced the number of loafers and deadbeats on the public payroll. But reform of the global welfare system hasn't even been attempted yet.
President Bush recently said, "We need to make sure that work is an integral part of any welfare reauthorization; that the cornerstone of a good bill understands that when we help somebody find work... that leads to more independence, more self-esteem, and more joy and hope." But the current foreign aid program creates dependence and more poverty. And now he wants to spend more on it.
Bush speaks of "conditions" attached to the aid but we don't know what they are. The odds are that the NGOs themselves will continue to monitor and distribute the aid, reporting back that everything is going as planned.
Like addicts and freeloaders, the foreign aid recipients have to go through a "cold turkey" process of achieving independence on their own. At the same time, the global tax schemes have to be confronted and defeated.
Former UN Secretary-General Boutros Boutros-Ghali endorsed global taxes, including an international tax on airline travel. The U.S. General Accounting Office (GAO) in 1996 published a report on how both the Clinton Administration and the UN were promoting "alternative revenue raising proposals."
Many members of Congress were outraged and introduced various bills to stop it. But the bills never passed and the UN moved forward with its plans, which are reminiscent of King George's foreign taxes on the American colonists. That caused a revolution. Today, the American people have to rekindle that revolutionary spirit and "throw the bums out" at the UN scheming to steal more of our income and spend it on global welfare.
UN promotion of a global tax dates back to 1994, when the UNDP "Human Development Report" featured an article by Tobin himself describing the idea. The same document included an article declaring:
"Mankind's problems can no longer by solved by national governments. What is needed is a world government." The UN intention is to become a world government with a world army and an International Criminal Court (ICC) that could put Americans in jail for various "crimes," including not paying their "fair share" of global taxes. The ICC will have universal jurisdiction, even over countries that don't sign or ratify the ICC treaty.
Maybe we need to chop down the old one like George Washington did...
Any idea when and where this conference was held?
US OUTTA UN! UN OUTTA US!
We already pay a global tax, it's just hidden deep inside our domestic tax burden, but god help the first official UN tax man that steps foot on my property demanding the UN's fair share. He'll collect my payment in lead and spent casings.
Because, like his father, he is a member of the One-World crowd. Do you really think he is a strong supporter of this country when he won't even protect this nation's borders?
god help the first official UN tax man that steps foot on my property demanding the UN's fair share. He'll collect my payment in lead and spent casings.
You won't ever see them coming. The Fed will be paying your share for you:
III. The Operation of a Tobin Tax
The basic principles of the proposed Tobin Tax are relatively simple. A small ad valorem charge would be levied on every transaction involving the exchange of one currency for another. Professor Tobin's own original suggestion was for a rate of between 0.1% and 0.5%. Later he proposed as much as 1%; but most recently has suggested 0.2%. Other economists or politicians have proposed a variety of rates, some going as low as 0.01%.
A tax levied at this level would be of negligible importance for long-term portfolio or capital investment. A rate of 0.5%, for example, would add only 0.05% to the initial annualised exchange costs of a ten-year investment project.(20) By contrast, the tax would constitute an important extra charge on short-term transactions.
How the tax would work
Supposing, for example, that a speculator anticipated a rise in the Dollar against the Euro. He might enter a contract to sell, say, 1 million Euros for a week, receiving $1.1 million. If, over the week, the Dollar then rose to parity with the Euro, he would be able to sell the $1.1 for 1.1 million Euros, netting a 100,000 Euro (10%) profit.
No doubt this profit would incur some normal tax; but this would hardly constitute a deterrent to the speculation.
The Tobin Tax, however, would fall on the gross sums involved. At a rate of 0.5%, he would pay 5,000 Euros tax when purchasing Dollars, and another $5,500 (by then equal to 5,500 Euros) on resale: total tax 10,500 Euros, representing a tax of 10.5% on the realised profit.
Even when added to normal taxes payable, this would still hardly be a deterrent.
Supposing, however, that the anticipated currency movement did not take place, and that the $:i parity remained constant that week. The Tobin Tax would still be payable on the currency operations. In this case, the speculator would pay 5,000 Euros when buying Dollars, and another $5,100 at the end of the week: a charge of 1% on his capital. On a simple annualised basis (see page 18), this would amount to a tax rate of 52%.
Moreover, if the Euro actually appreciated against the Dollar - resulting in a loss on the speculation - the Tobin Tax (unlike any tax on profits) would still have to be paid.
Calculating equivalent annual tax rates
A Tobin Tax on a one-day, one-week or one-month speculation, expressed as an annualised percentage rate, can be calculated in a number of ways.
The simplest - illustrated in Table 1 - is merely to assume that the same transaction is carried out every month, week or day of the year, and multiply the tax rate by two, for each leg of the buy/sell operation; and then by 12, 52 or 365 (Tobin's own original figures for one-day transactions, however, assumed only 240 trading days in the year ). A 1% Tobin Tax on a one-month operation would thus equal an annualised rate of 24% (1% x 2 x 12).
One alternative method would be to assume a given starting sum, which is then used for monthly, weekly or daily operations over a year, the sum diminishing on each turn by the tax previously levied. By this method a speculator starting with $100, who made monthly trades without profit or loss, would have just over $78.5 left at the end of the year, representing an annualised tax rate of just under 21.5%. Weekly transactions would leave just over $35, an annualised tax rate of 65%, (as opposed to 104% by the first method). After 365 one-day trades a fraction over 6.5 cents would still be left, a tax rate of 99.4%, (as opposed to the 730% under the first method).
The figures used by Eichengreen and Wyplosz in their 1993 Brookings Paper, however, are based on compound rates arrived at by the formula:
1 + R = 1 + (2T/100) P
where R is the annualised rate of interest, T is the tax rate on a one-way transaction, and P is the number of transactions in a year. For a tax rate of 1%, this produces the following annualised rates:
monthly (12) 27% weekly (30) 181% daily (220) 7,980%
The figures used were based 30 trading weeks in the year, and 220 trading days.
All these methods of course assume that the sums changed at the beginning and end of the operation are the same - i.e. that exchange rates have remained constant over the period.
This brief illustration highlights two important points.
- First, the effective annualised rate of tax on the capital sum involved would rise in inverse proportion to the turn-around period. An operation involving the purchase and resale of foreign exchange in a one-year period would incur a total tax charge of 1% (0.5% x 2); over a one-month period of 12%; over a one-week period of 52%; and over one day of 240% (see Table 1).
- Secondly, the tax would not necessarily make all speculation unprofitable; but it would raise the degree of risk involved. A higher movement in parities would be needed to make a given operation profitable; and the penalties for making a wrong bet would be increased.
Table 1: Simple annualised effective Tobin Tax rates for differing turn-around periods, assuming constant exchange rates (see also " Calculating equivalent annual tax rates"
Nominal Tax rate (%) Effective Tax rate (annual %) 1 day/ trading day* 1 week 1 month 3 months 1 year 10 years 0.01 7.3/4.8 1.04 0.24 0.08 0.02 0.002 0.05 36.5/24.0 5.2 1.2 0.4 0.1 0.01 0.1 73/48.0 10.4 2.4 0.8 0.2 0.02 0.15 109.5/72.0 15.6 3.6 1.2 0.3 0.03 0.2 148/96.0 20.8 4.8 1.6 0.4 0.04 0.25 182.5/120.0 26.0 6.0 2.0 0.5 0.05 0.5 365/240 52.0 12.0 4.0 1.0 0.1 1.0 730/480 104.0 24.0 8.0 2.0 0.2
* As formulated by Tobin, the annualised rate was calculated on the basis of what a round-trip would cost if carried out every day, on the basis of 240 trading days in the year.
Would you be so bold as to consider this plan as "taxation without representation"?
Yah got Congress Critters don'chya? What more could yah ask for? </sarcasm>
In short if you will notice this is the ultimate Value Added Tax, international in scope.
"A small ad valorem charge would be levied on every transaction"
A single rate Flat Tax, with no individual returns to file. So what's a little 1% tax?:
"For a tax rate of 1%, this produces the following annualised rates:
monthly (12) 27% weekly (30) 181% daily (220) 7,980% "
Keep smiling, and bend over.
A better question is how do we stop them before they get this thing rolling. We could always not require our investors to pay then let the UN try to force us to do it.
Wha-Wha-What? daily (220) 7,980% How's that?
Trade the same dollar, over and over again in currency transactions, with both sides paying every time, a penny here a penny there mounts up.
A better question is how do we stop them before they get this thing rolling. We could always not require our investors to pay then let the UN try to force us to do it.
Actually it is unlikely to be enacted in regards the UN as it requires a treaty to do so.
How do you stop something that the slip under the door with no warning, and under other names? All one can be is aware that such taxes are in the minds of politicians as alternatives to the current way of taxing.
It's equivalent could readily be enacted here as a national tax. Apparently such a tax, as it would regard commodities & currency trading, has been proposed in the Bush FYI 2003 Budget:
"National Introducing Brokers Association
55 West Monroe Street, Suite 3330
Chicago, Illinois 60603
Wednesday, February 27, 2002
The Honorable George W. Bush
President of the United States
1600 Pennsylvania Avenue, NW Washington, DC 20502
RE: Proposed Tax on Futures Transactions
Dear Mr. President:
The National Introducing Brokers Association (NIBA) strongly opposes the proposed transaction tax on U.S. exchange-traded futures contracts currently included in your proposed Fiscal Year 2003 Budget. The NIBA, an 11-year old trade organization of professional salespersons employed in the futures and options industry, joins with domestic exchanges, trade associations and self-regulatory organizations to voice our opposition. "
And as the Newman "par user's fee". Which was investigated and proposed for application in the United States Congress during Clinton adminstration as an alternative to the income tax:
CRS REPORT FOR CONGRESS 88-103 E
William Jackson Specialist in Money and Banking and Jack Taylor specialist in Public Finance. Economic Division. January 5, 1998
A FINANCIAL TRANSACTIONS TAX?
THE PROPOSED FEDERAL PAR USERS FEE
Proposal to cut the gigantic federal deficit have ranged far and wide. Among them is an innovative suggestion to levy a new Federal tax that would be broadly based: the proposed par users fee. As developed by tax lawyer John S. Newman, it would collect a small sum from all checks, direct deposits, and many other noncash transfers of funds through the banking system. The proposal is presented and analyzed below.
DESCRIPTION OF THE PROPOSAL
Most economic activity in the United States is mirrored in financial transactions flowing through the banking system in the form of checks, drafts, electronic funds transfers. Each stage of the production and sale of a good or service in the economy generally requires numerous financial transactions (loans, other capital transfers, payments to suppliers of labor and intermediate products. Except for those handled by barter or cash, most transactions go through the U.S. bank clearing system. The sum of all these financial transactions is a very large number, many times larger than the gross national product. Mr. Newman has estimated it as $220 trillion. This sum represents money moving into and out of various financial accounts, and for banking purposes there is a record of each such movement. This is the base that Mr. Newman proposes to tax.
The tax would be levied at some very low rateMr. Newman suggests one-two-hundredth of 1 percent, or .00005on each transfer out of an account with a financial institution. Inter-bank clearances and certain inter-account transfers would be exempt. Cash movements would likewise be exempt. Government transfers would be taxed on their deposit rather than their withdrawal (i.e., taxed to the recipients instead of the governments, as an exception to the general collection rule). The bank handling the account involved in the taxed transaction would \deduct the required tax from the account and remit if to the Federal Government at the same time that it deducted the principal amount from the account, making collection virtually automatic.
Is it a User Fee?
The proposed tax is called a user fee by its author because it is levied on a financial system created and maintained by the Federal Government. Mr. Newman suggests that it can be viewed as a fee for the services provided by the government. In clearing transactions and insuring deposits. Mr. Newman characterizes his fee as a par fee in return for the Government ensuring acceptance of chicks at 100 cents on the dollar (par), without recipients worrying whether the instrument would be redeemed a par by the issuing bank. This terminology stems from conditions in banking that existed many years ago, when bank liabilities issued in one location were subject to discounts if presented elsewhere, i.e., nonpar valuation for their presenters.
In most tax literature, user fee means a government charge related to the cost of providing the government services, analogous to a price in the private economy. The charges presently levied against financial institutions for Federal deposit insurance, wire transfers, and the like by their regulators are user fees in this sense. Mr. Newmans proposed fee is in addition to the present fees and is intended to raise revenue for general Government use. Not to reimburse specific Government costs.
Indeed, to the extent that Federal legislation (beginning with the National Bank Act of 1863 and continuing through P.L. 96-221) has forced depository financial institutions to maintain cash reserve to among other things, facilitate the clearance of payment instruments, some would suggest they already more than compensate the Government for such services by submitting to a large implicit tax: lost earnings on the reserve. The reserve tax: seems to be largely passed on to customers in the form of service charges and lowered or zero interest on checking accounts.
ARGUMENTS IN FAVOR
Mr. Newman estimates the base for his proposed user fee. The sum of the transactions clearing the banking system annually, as at least $220 trillion. (CRS is unable to verify this estimate independently.) Clearly the proposed tax base is very large a very large base can be combined with a very low, unobtrusive tax rate to produce large Government revenues without unduly upsetting taxpayers. Very low rates make evasion and avoidance unprofitable activities for most taxpayers, as was the case in the successful collection of Federal stamp duties on many financial transactions in the 1860s. The levy would not likely be large enough (at Mr. Newmans suggested rate) to induce many payers to shift to barter or cash payments and the underground economy.
The tax would be a very easy levy to collect. The bank doing the final processing of the transaction would simply program its computer to deduct from the account the amount of tax as it deducts the amount transferred in the transaction. Remittance could them easily be made to the Treasurys tax and loan accounts that are presently maintained within the commercial banking system. The financial community could be allowed to retain a small portion of the amounts collected, perhaps 1 percent, for serving as collection agent. The entire system could operate virtually automatically for most routine transactions. Most recipients would thus not feel the imposition of the fee. The payers would probably treat the small sums deducted as a nuisance only, of even lesser irritation to them than sales taxes.
The extensive records presently maintained in the banking system would be adequate to allow Government verification and audits of the tax collection system. Unlike most other new tax proposals, no elaborate new system of administering the tax would be required, at least for those transactions that stayed within the present bank clearance system. The proposed low rate of tax would make extensive efforts to avoid the tax uneconomical for smaller transactions, further simplifying the administration and enforcement problem
Changing rates of tax would be a fairly simple matter that could be accomplished quickly (at least as an administrative problem) by merely notifying the banks to change the rate in their computer programs. If quick rate changes for fiscal policy reasons were politically feasible in this country, this tax could certainly be designed to accomplish this purpose easily.
For taxpayers with large aggregate financial transactions (i.e., major corporations), even a low rate of tax can be profitably avoided if the cost of avoidance is relatively small. Since this tax would strike only transactions clearing through the U.S. banking system it could be avoided by dealing in cash, be barter arrangements, or by conducting the transaction through foreign banking systems. Extensive efforts to prevent this type of avoidance could lead to far greater administrative costs; but the possibilities for avoiding the tax could reduce considerably Mr. Newmans estimated tax base of $220 trillion.
Another possibility for avoiding the tax, and thus reducing the tax base, would be vertical integration of operations. Payments to outside suppliers go through the banking system and thus would incur the tax; the same item supplied from within the corporation could avoid the tax. This is a common effect of European-style turnover taxes, and other taxes like this one, can be decreased by decreasing the number of transactions involved in an operation.
This tax may be overstated in another sense, also. The base is so very large because it counts the same dollars over an over again. Gross national product (GNP), the final market value of all economic transactions, is around $4.5 trillion; financial transactions totaling $220 trillion are the sum of many turnovers of the dollars making up GNP, as well as many movements of capital and financial paper that do not add to the GNP as any other $11billion tax would be, regardless of the stated rate. The $11 billion is almost exactly one-quarter of one percent of 1987 GNP. In absolute dollars, it is essentially the same amount as the revenue shown in the 1987 budget from the Federal excise taxes on tobacco and alcohol. The continuing absorption of small sums from the circular flow of dollars reflecting ongoing transactions becomes clearer in chart 1 (on the next pagethe spatial relationship of the 50-cent deduction from the $100 circle is clearly not to scale).
The fact that this proposal would tax the same dollars again and again as they move through the economy makes it difficult to determine the final incidence of the tax. The tax represents an increase in the cost of doing business for business taxpayer, and it may be assume that the tax, like other costs, would be passed forward in price increases wherever possible. Since the tax is on financial rather than real transactions, however, its impact on the final price of any good or service depends on the number of financial transactions it takes to make each purchase at each stage of production (e.g., a check to purchase an intermediate good from a supplier, a check from the supplier to the earlier stage input supplier, checks for loans to cover each item used, and so on for each stage of production and final sale of each product). If the accumulated tax on all such transactions were ultimately passed through to final consumers, the tax would be the equivalent of a sales tax on all goods and services levied at a rate (expressed as a fraction of final sales price) considerably in excess of the stated rate pf .00005. In the case of the stamp taxes of the 1960s mentioned above, for example, final product prices rose be many times the totals off the par-item intermediate-stage taxes.
Politically, the relatively hidden nature of the tax and the ease with which its rates could be raised would not be regarded as positive points by everyone. Some prefer to have taxes that are not easily ignored as a means of imposing fiscal discipline on Government activities.
The proposal has appealing features. Its very low rate, making the tax virtually unnoticeable by most taxpayers, combined with the very large base many times GNP, could possibly produce large amounts of revenue fairly painlessly. It would rely on a well-established system of electronic records and thus could be an easy tax to collect.
The proposal has disadvantages in that : (1) transactions could be structured so as to escape the tax (cash, trade credits, asset swaps) on very large transactions; and (2) the tax would increase business costs and thus could be presumed to increase the price of goods and services throughout the economy. The rate of price increase, however, would depend on the financial transactions involved in the production and sale of the products, since each separate financial transaction increases the total tax bill. This cascading effect is ultimately passed through each stage of production as price increases, as the similarity cascading turnover taxes often used in Europe are, the tax would ultimately be borne primarily by consumers.
Maybe next election, more Conservatives will vote Conservative, even if the Conservative candidate is not a Republican. After things like this, the USA Patriot Act, Campaign Finance Reform and other liberal and/or one-world actions, I don't know how those Conservatives who voted for him can sleep at night. Things may not be going well, but at least I don't have to live with the fact that I helped Dubya get elected.