Sin Taxes for the Financial Industry

I really wished Jeff Frankel blogged more since economists have established an (undeserved) reputation in the media as John Hodgman-style general experts, but the prominent ones who aren’t named Krugman skew decidedly right and reinforce the laissez faire conventional wisdom.  That said, Frankel came through today with a post on the head of Britain’s financial regulatory agency coming out for transaction taxes in order to shrink the trading volume and raise funds.

Transaction taxes are of course a pet policy of mine (a better economy via better systems design!), and they have a lot of potential to raise government funds while creating positive secondary effects, in the same vein as other proposed ‘sin taxes’ such as on soda or pollution.  While it may be hard to quantify the behavioural impacts of these taxes, what matters from a policy-making perspective is that, regardless of size, the impacts are positive.

I have yet to see anyone argue that transaction taxes could shrink the time-horizon of investors or increase market volatility.  The debate, when it occurs (which is rare, since opponents do not seem willing to engage the issue), is over the significance of the impacts.  But of course the impacts aren’t the primary reason to enact the policy; you pass it to raise money for something useful.  Something like health care or supertrains or robot gladiators.  Any behavioral impacts are gravy.

I really wish that public anger over the bailouts and bonuses to the financial industry could be harnessed into passing a transaction tax — it would certainly be a more productive use of the anger than the abortive attempt to pass special bonus taxes.

1 comment to Sin Taxes for the Financial Industry

  • CBC hit a nerve with CanWea! home > media centre > news reeaesls02/08/2013 Wind Rush documentary requires fact-checks on health and global wind experienceOttawa, February 8, 2013 – According to the Canadian Wind Energy Association (CanWEA),the documentary Wind Rush, presented on CBC’s Doc Zone February 7, 2013, requires clarification and fact-checks concerning wind energy development in Canada and around the world.CanWEA regularly consults with experts in science, medicine, and acoustics here in Canada and around the world to ensure the industry is reviewing all credible information related to wind energy and health. While the wind energy industry welcomes a fact-based debate about energy choices, CanWEA is disappointed that the film did not provide multiple nor balanced expert views on a wide range of issues discussed, particularly with respect to wind energy and human health.CanWEA was also not contacted by the filmmakers to provide comment, background, or context with respect to wind energy development across Canada and the film makes no effort to present the views of regulators, utilities or electricity system operators.We provide important fact-checks here:Wind Energy and HealthThe wind industry has been delivering clean electricity for more than 30 years. Worldwide, there is now over 240,000 MW of installed wind energy capacity, delivering affordable and reliable electricity in over 90 countries. Today the majority of people that live and work around wind turbines have productive and positive experiences in Canada and around the world.The balance of scientific evidence and human experience to date clearly shows that wind energy is not harmful to humans. The documentary does not provide a balance of perspectives on wind energy and human health. Please consult the 17 international reviews on this matter that have engaged dozens of scientific, medical, and acoustics experts – none of whom appear in the documentary.The documentary raises concerns related to infrasound from wind turbines. A report recently released by the South Australian Environment Protection Authority (EPA), consistent with most studies in this area, concluded that “…the level of infrasound at houses near the wind turbines assessed is no greater than that experienced in other urban and rural environments, and that the contribution of wind turbines to the measured infrasound levels is insignificant in comparison with the background level of infrasound in the environment.”The documentary features many comments by Dr. Nissenbaum. However it is important to note that much of the research he has undertaken that is referenced in the documentary has been reviewed by experts at the first Environmental Review Tribunal (ERT) in Ontario, by the Queen’s Bench of Saskatchewan and by an independent expert panel established by the Massachusetts Department of Environmental Protection and the Massachusetts Department of Public Health (MassDEP/MDPH, 2012). Both courts, as well as the Massachusetts independent expert panel, found no justification for halting wind energy development as a result of the information presented by Dr. Nissenbaum. Further, the MassDEP/MDPH panel concluded that attributing any of the observed associations to the wind turbines (either noise from them or the sight of them) is premature .The documentary suggested that the distances wind turbines are setback from residences in Ontario is a cause for concern. In fact, a 2011 study from the Minnesota Department of Commerce found in their review of setbacks in thirteen countries that “the average lower setback distance is approximately 470 meters, and the average upper setback distance is 700 meters.” In Ontario, the regulations do not permit wind turbines to be closer than 550 metres to a residential home.Wind Energy in DenmarkThe documentary argues the Danish population has turned against wind energy this is not the case. A June 2012 survey from the Danish Ministry of Energy, Climate and Buildings, however, showed that 83 per cent of Danes support continued development of wind power both on- and offshore. In addition, 95 percent of Danish parliamentarians, from multiple political parties, have supported Denmark’s new and more aggressive wind energy targets.A Responsible Industry Delivering Real BenefitsAs the voice of Canada’s wind energy industry, CanWEA supports the responsible and sustainable development of wind energy. CanWEA’s global industry-first Best Practices for Community Engagement and Local Consultation recognize the fundamental right of every citizen to play an active role in any new development in their area. These Best Practices were informed directly by input from local municipal officials and stakeholders. Wind energy is universally recognized as one of the safest and most environmentally friendly sources of electricity available to us today. It also provides significant economic benefits to rural communities and is now cost-competitive with most conventional forms of electricity generation.For more information or interview opportunities, please contact:Ulrike Kucera, Media Relations OfficerCanadian Wind Energy Association (CanWEA)Tel: 613-234-8716 ext. 228 | Mob: 613-867-4433Email: Lejla Latifovic, Communications OfficerCanadian Wind Energy Association (CanWEA)Tel: 613-234-8716 ext. 241 | Mob: 613-608-8226Email:

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