User:Johnbarri~enwiki/TEAL Total Economic Activit Levy
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TEAL Total Economic Activity Levy
The economic crises presently besetting the world appears to be largely a function of societies living beyond their means. Mostly they are welfare states of one sort or another with inadequate tax systems. According to tealtax.co.za, a minimal levy on the value of all bank transactions in an economy should adequately fund the social and political needs of that society. The example used is the South African economy which, according to the web site, is rapidly heading the way of many European and the US economies, viz. going into ever-increasing debt in order to fund ever increasing state expenditure. The TEAL tax system purports to solve the funding needs and on the face of it, would seem to overcome many problems inherent in traditional tax systems. For example, the reported reluctance of Greek tax payers to pay taxes would be overcome and the ability of some multinational corporations to make substantial profits yet avoid US taxes would also cease, because economic activity as measured by bank transaction values, not trading results, would be the basis of the tax.
TEAL is essentially a transaction tax. These sorts of taxes are discussed at Financial transaction tax and opinions for the need for such taxes appear to be gaining momentum, with proposals in the US, (the Debt Free American Act HR1125 of 2011, currently stalled at committee level)[1]and in Europe (the EU Bank Financial Transaction tax)[2] the latter intended for banks to pay 200 Billion Euros for damage they did to the European economy. While the former is not likely to be passed by the American Congress the latter has the overwhelming support of the EU Assembly with 529 votes for and 127 against. The latter does not have force of law, yet, but EU lawmakers may have difficulty ignoring the opinion which that support reflects.
Unlike its American and European counterparts, which have specific goals (debt reduction, damage reparations), according to tealtax.co.za, the TEAL proposed for South Africa is intended to replace all other forms of government income, adequately financing government expenditure, creation of a debt free national economy and permit the expansion of expenditure where it has before been inadequate for the needs of the country.
Transaction taxes have their critics. Nigel Farage calls the EU plan a 'socialist experiment' and 'Kamikaze Economics' [3] and an article in the on-line site 'Financial Articles' [4] claims that bank customers will face higher bank fees as a result of transaction taxes.
It appears from the content of tealtax.co.za that the TEAL system will tax the transaction at account level, so the bank clients' accounts will be charged, not the banks themselves. In that system, the banks appear merely to be the instruments of collection.
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TEAL Total Economic Activity Levy