Teal (total economic activity levy)

[cityfanlee23]

Has anybody looked into the legitimacy of a Teal Tax?

I have been looking into it for a while, and it does seem a genuinely fantastic alternative to the current regressive taxes we have today.

 

To put it in short, only around 20% of transactions in the economy are currently taxed (meaning the ones that are have to be taxed higher)

the 80% of other transactions not taxed include certain stocks and bank transfers.

 

The logic behind Teal, is that if we tax every single transaction, we can all be taxed less (apart from banks who would be forced to pay more)

And would essentially be a direct tax on all economic activity (very similar to the 20% vat we pay on all transactions)

 

The result being we could scrap all taxes and still double the governments tax revenue, meaning we could pay off the National debt in 3 years.

 

We would only pay 1% tax on all of our transactions (instead of 20%) and only 1% on income taxation.

It's quite difficult to measure the "total economic activity" but even going on the most basic figures, UK banks turned over £75 trillion in 2013, a 2% levy (1% either side) would generate £1.5 trillion in taxation to the government and the masses are better off.

 

What are your thoughts on this plan idea? what are the drawbacks?

 

http://thereset.org/proposals/teal

 

http://thereset.org/docs/tax.pdf (calculations on the most basic form - potential could be much more)

 

 

 

[Guest]

Didn't we lose America because of this?

[cityfanlee23]

Didn't we lose America because of this?

 

Not really sure how you mean.

[Richmondfox]

I'm too busy refreshing the Mendy thread to do any research.  Is this currently being used successfully by any countries at the moment?

 

It seems like a great idea in theory but it would mean the banks/financial system paying more, something they aren't overly keen on doing as it is.

[cityfanlee23]

I'm too busy refreshing the Mendy thread to do any research.  Is this currently being used successfully by any countries at the moment?

 

It seems like a great idea in theory but it would mean the banks/financial system paying more, something they aren't overly keen on doing as it is.

 

As far as I can see it's not been implemented anywhere (as we know most countries are stuck in the debt based systems the west follow)

 

I think to make it a success we would have to nationalise the banks, probably one of the only things I think should be nationalised, a country should control it's money supply, owning the banks would make this very easy I'd have thought.

[Dodgy Bob]

For any transaction that isn't currently subject to tax but which would become subject to a 1% tax it would be naive to think businesses would swallow that as a loss. The price increase would be passed on and on until it reaches the end consumer, ie you and me. We might end up paying less in income tax but we'd pay more for everything else. Think about it, if the government is going to receive twice the amount of money it receives now, that money has to come from somewhere, and it won't come from the pockets of businesses.

[Buce]

Not really sure how you mean.

The British imposed a tax on tea in the American colonies, leading to the War of Independence.

FIF made a funny.

[Finnaldo]

The British imposed a tax on tea in the American colonies, leading to the War of Independence.

FIF made a funny.

 

Well it would of been a funny if the acronym wasn't a different word.

[cityfanlee23]

For any transaction that isn't currently subject to tax but which would become subject to a 1% tax it would be naive to think businesses would swallow that as a loss. The price increase would be passed on and on until it reaches the end consumer, ie you and me. We might end up paying less in income tax but we'd pay more for everything else. Think about it, if the government is going to receive twice the amount of money it receives now, that money has to come from somewhere, and it won't come from the pockets of businesses.

 

 

why would they put prices up? If a multinational is currently making a profit of £10m, they pay a rate of 18% corporation tax in the UK when the new cuts come in.

Currently they pay 1.8m corporation tax on those profits.

Under a TEAL arrangement, they would have to spend £180m in expenditure to be taxed the same amount as the current corporation tax level.

 

The majority of businesses in the uk would not hit that.

[Dodgy Bob]

why would they put prices up? If a multinational is currently making a profit of £10m, they pay a rate of 18% corporation tax in the UK when the new cuts come in.

Currently they pay 1.8m corporation tax on those profits.

Under a TEAL arrangement, they would have to spend £180m in expenditure to be taxed the same amount as the current corporation tax level.

The majority of businesses in the uk would not hit that.

You said 80% of transactions aren't currently taxed. I can't verify that, but if it's true then the cost of those transactions will rise. If the tax take is to double then that money has to come from somewhere. Either businesses will absorb it and make less profit, which I'd consider unlikely, or it'll be passed onto the consumer.

[cityfanlee23]

You said 80% of transactions aren't currently taxed. I can't verify that, but if it's true then the cost of those transactions will rise. If the tax take is to double then that money has to come from somewhere. Either businesses will absorb it and make less profit, which I'd consider unlikely, or it'll be passed onto the consumer.

 

To be honest the figure is up for debate as I cannot remember where I had seen it. could be wrong but I know it's a significant % of the total activity of the economy.

 

You're not grasping the concept though, businesses will more than likely pay LESS than they currently pay, unless of course they are massively overleveraged for the profits they make.

Did you not see my example?

 

A business making 10m profit is paying 1.8m in tax.

Under the Teal system their profits would not be taxed, the tax would be placed on their transactions.

that same company would need to spend 180m a year to pay 1.8m tax under a Teal system.

 

If a company is spending 18x it's profits I'd be quite worried in todays climate.

[GaelicFox]

@@FIF

Is a Genuis

LOL

[Dodgy Bob]

To be honest the figure is up for debate as I cannot remember where I had seen it. could be wrong but I know it's a significant % of the total activity of the economy.

You're not grasping the concept though, businesses will more than likely pay LESS than they currently pay, unless of course they are massively overleveraged for the profits they make.

Did you not see my example?

A business making 10m profit is paying 1.8m in tax.

Under the Teal system their profits would not be taxed, the tax would be placed on their transactions.

that same company would need to spend 180m a year to pay 1.8m tax under a Teal system.

If a company is spending 18x it's profits I'd be quite worried in todays climate.

So if businesses are paying less tax then who is paying the extra tax that allows the government's tax take to double?

[Guest]

Well it would of been a funny if the acronym wasn't a different word.

 

If you were my age and your eyesight was failing and you were distracted because you were trying to ruin the lives of young people you might have misread the word too.

 

 

 

 

 

 

 

 

 

but I didn't

[cityfanlee23]

So if businesses are paying less tax then who is paying the extra tax that allows the government's tax take to double?

.... Did you read my post mate?

 

The majority of financial transactions are NOT taxed. 

if we tax ALL transactions through bank accounts by 1% each side, the £75 trillion in economic activity in the uk would raise £1.5 trillion.

[Great Boos Up]

Wasn't the problem down to the value of transactions against the % of transactions.

 

For example my pay, my direct debit and my cash withdrawal are all transactions and a 1% tax on a secret nuclear submarine deal is a shit load O Money.

 

It encourages less transactions.

[Dodgy Bob]

.... Did you read my post mate?

The majority of financial transactions are NOT taxed.

if we tax ALL transactions through bank accounts by 1% each side, the £75 trillion in economic activity in the uk would raise £1.5 trillion.

Yes, so when a supermarket buys a large shipment of Brexit Special bendy bananas (not currently subject to vat) and a transaction tax of 1% is applied, it will have cost the supermarket 1% more to buy those bananas than it did before. Either the supermarket will absorb that cost and it will come out of their profits, or more likely they'll pass it onto their customers in the form of a price increase. Either way, for the government to double their tax take, somebody has to pay.

[cityfanlee23]

Yes, so when a supermarket buys a large shipment of Brexit Special bendy bananas (not currently subject to vat) and a transaction tax of 1% is applied, it will have cost the supermarket 1% more to buy those bananas than it did before. Either the supermarket will absorb that cost and it will come out of their profits, or more likely they'll pass it onto their customers in the form of a price increase. Either way, for the government to double their tax take, somebody has to pay.

 

The tax take would DOUBLE. Therefore we could abolish all current taxation, including corporation tax.

Their staff would also have no income tax, no national insurance, no vat, no fuel duty. 

[cityfanlee23]

The vast majority of companies would save money, only those working on minimal margins and companies not over leveraged would end up paying more, in which case a 1% rise in costs would not effect the tax payer who will be about 55% better off because we would abolish all other taxation. 

 

I know what you're saying but the figures don't back your argument.

 

Taxes will never be good for everyone, but it depends what sort of system you want, a system that is in favour of big business, or in favour of working people.

[Great Boos Up]

But companies claim back / pass on the 20% tax through a VAT company registration number. Working people don't.

It sounds a good idea but in reality it's another poll tax. It sounds fair as in one transaction = one tax but in reality one % becomes 2.5% as it must be impossible to administrate document and enforce all transactions 

[cityfanlee23]

But companies claim back / pass on the 20% tax through a VAT company registration number. Working people don't.

It sounds a good idea but in reality it's another poll tax. It sounds fair as in one transaction = one tax but in reality one % becomes 2.5% as it must be impossible to administrate document and enforce all transactions 

 

It's also impossible to stop cash transactions being taxed...

I never said it was perfect, just better than the current system as it's much fairer. 

 

Take the EU exit, no doubt the downfall will be taken from pensioners and the working man. 

 

Companies claim back 20% vat but staff and employees do not. 

Therefore a 1% rise in costs of shopping won't make a difference, as shoppers will be 19% better off on VAT alone. 

 

You could raise more than the current tax revenue just with a 1% transaction tax on personal accounts alone. 

[Trav Le Bleu]

You do of course realise that income tax is only a temporary tax.

200 years later...

[Great Boos Up]

It would work on an insular scale but within global trading it would need the world to change. And we both know that global finances are so complex that a global nuclear war would need to happen to re start trade from scratch. I would propose it it's a socialism fantasy: a great idea but on mass it always gets abused.

[cityfanlee23]

It would work on an insular scale but within global trading it would need the world to change. And we both know that global finances are so complex that a global nuclear war would need to happen to re start trade from scratch. I would propose it it's a socialism fantasy: a great idea but on mass it always gets abused.

 

I don't understand how it would get abused. 

It's not really socialist that we all pay a fair share, it's just common sense. 

you could argue that tax cuts is a predominantly conservative idea. 

 

You'd have to nationalize the banks.

[Guest Kopfkino]

It's quite difficult to measure the "total economic activity" but even going on the most basic figures, UK banks turned over £75 trillion in 2013, a 2% levy (1% either side) would generate £1.5 trillion in taxation to the government and the masses are better off.

So the tax take would be £1.5 trillion which is a pretty high % of current GDP, the measure of income. So the government would pretty much hoover up everything, sounds more communist than communism