11 European Countries Adopted A Financial Transactions Tax, And The U.S. Should Too

11 members of the Eurozone today received the go-ahead to apply a financial transactions tax to trades of stocks and derivatives that occur within their countries. The EU’s tax commissioner called it “a milestone for EU tax policy“:

EU ministers have given the go ahead for 11 eurozone members, including France and Germany, to prepare a new financial transactions tax. [...]

The tax – also known as a Tobin tax after the economist who originally came up with it 40 years ago – is expected to be charged at a rate of 0.1% of the value of any trade in shares or bonds, and 0.01% of any financial derivative contract.

Although the tax is not being adopted by the UK, which already charges its own 0.5% stamp duty on trading in shares, it will nonetheless have to be paid by investors trading on the London Stock Exchange who are based in one of the 11 countries.

The other nine going ahead with the tax are Spain, Portugal, Italy, Belgium, Austria, Slovakia, Slovenia, Greece and Estonia.

As former Labor Secretary Robert Reich tweeted, “Most of Europe will now tax financial transactions, generating billions for hard-pressed budgets. U.S. should do same.” It’s unclear how much revenue Europe will raise, but the European Commission “had previously estimated that such a tax across the 27-nation bloc could yield €57 billion a year,” while “the 11 nations pushing ahead represent about two-thirds of the EU’s economy.”

Here in the U.S., lawmakers have unsuccessfully tried to implement a financial transactions tax in the aftermath of the 2008 financial crisis. The benefits of such a tax are two-fold. First, it would raise billions of dollars to repair a federal budget that expanded in the wake of a recession caused in large part by Wall Street malfeasance, thus making the financial sector repay for the damage it caused. Second, it would slow down some of the high-frequency trading that has exploded in recent years, bringing more stability and safety to financial markets.

Last year, a group of 52 financial executives, including several former heads of mega-banks JP Morgan and Goldman Sachs, endorsed the idea. Forty countries around the world have already embraced a transactions tax.

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Conservative Think Tank Ranks Countries With Government-Run Health Care As The Freest In World

Heritage President Jim DeMint.

Former Senator Jim DeMint, the new president of the conservative Heritage Foundation, has decried Obamacare as “a cancer” that is “is fundamentally inconsistent with liberty.” During the Senate Obamacare fight, DeMint famously declared “If we’re able to stop Obama on this, it will be his Waterloo. It will break him.”

But a new report from DeMint’s own organization suggests that, far from being incompatible with freedom, countries with health care systems with as much or significantly more government control over healthcare are the freest countries in the world.

The report in question is Heritage’s Economic Freedom Index, released annually since 1997. The report defines the concept of “economic freedom” in misleading right-wing terms, but even by those standards, it appears that universal health care systems far more expansive than Obamacare aren’t “fundamentally inconsistent with liberty.” In fact, the ten “freest” economies in 2013 by Heritage’s lights range from mandating individuals save a certain amount of money for health care to almost the entire health care system, including hospitals, being owned and operated by the government:

1. Hong Kong: The semi-autonomous city inside China has a universal, publicly run health care system: about 80 percent of Hong Kong hospitals are government owned and operated. While private supplemental insurance is available, it’s more expensive than public services.

2. Singapore: Singapore is often cited as a free-market health care system that works. But one of the centerpieces of the Singaporean model, as conservative David Frum notes, is a government mandate requiring citizens to place a certain percentage of their income in “medical savings accounts” to ensure they can pay for routine health care costs out of pocket (when their income is inadequate to pay, the government pays direct subsidies a la Obamacare’s Medicaid expansion). Hardly seems consistent with DeMint’s point that health care mandates are “slippery slopes” towards the death of freedom.

3. Australia: Australia has a single-payer system in which, like Canada, doctors are privately employed but all Australians are eligible for insurance coverage through a government-run provider called Medicare.

4. New Zealand: The Kiwi government has made most services free or nearly free to all residents; the government covers roughly 80 percent of national health care expenditures and directly owns and operates about half of all health care services in the country.

5. Switzerland: This Swiss system is closer to the American health plan post-Obamacare than most other national systems; Switzerland has both privately owned health care and privately-provided insurance together with an individual mandate to purchase health insurance. Interestingly, Swiss insurers are legally prohibited from profiting on the basic, mandatory insurance package.

6. Canada: Our northern neighbor is, of course, the most famous example of a single payer system in the United States.

7. Chile: Like Singapore, Chile mandates that individuals pay into health savings accounts to cover health care costs and supplements the accounts of poor Chileans. It also has both publicly and privately run health care services.

8. Mauritius: A tiny island nation in the Indian ocean, Mauritius has government-run health services that cover roughly 70 percent of the country’s health expenditures, with private supplemental practices making up the remainder. All government health services are provided free of charge to Mauritian citizens, which has helped the country improve quality of life for its citizens markedly in the past two decades.

9. Denmark: As in Mauritius or the United Kingdom, the Danish government owns and operates the vast majority of the health care system.

Number 10 on the list is, of course, the United States, which will finally join the rest of the top ten “most economically free nations” in providing universal or near-universal health care when Obamacare is fully implemented.

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