forum.We were surprised to find that the Les Républicains (LR) political party took over our proposal for taxation of all electronic payments (see our book Financial speculation must be taxed, Odile Jacobs, 2019). However, in our book, the use of 0.2% microtolls to fund ecological transformation has been interviewed by Guillaume Peltier. JDD The effective tax rate of 2% will be levied on April 17.
Surprisingly, the proposal originated from LR. Indeed, this tax will mainly put pressure on those who accumulate back and forth between their bank accounts (ie, wealthy households and the financial industry) who are part of the party’s usual supporters. Will Guillaume Peltier pass?
Indeed, the idea is tempting: in France, the gross domestic product (GDP) represented by electronic payments is more than one hundred times. Even if the toll fee is cut in half, the micro toll fee is only 0.2% (our recommended rate, ten times lower than Guillaume Peltier) can still generate 10% of GDP (50 times, 0.2%), about 250 billion euros (almost equal to The sum of value-added tax and income tax). Therefore, we defend this idea first proposed by the American economist Edgar Feige in the 1990s.
Unfortunately, the details are the devil. The 2% tax rate proposed by LR, even if it seems very low, will cause huge turbulence in the operation of the economy. Imagine a corporate treasurer who invests his one-month cash surplus. Even if the interest rate returns to a normal value (for example, 5% per year), one month’s investment can only earn 0.4%.
The 2% tax will completely eliminate the company’s cash management and also eliminate the inter-bank market, which is essential for the transmission of monetary policy from the European Central Bank (ECB)! We must not kill the goose that lays the golden eggs.