Transaction tax:

The circulation of goods from the point of manufacture to the point of consumption should be carried out by administrative means only.

The market economy of commodity exchange, is an unwieldy and clumsy system of transactions in which people fulfill their personal material needs by using one another. Market exchange is where those involved in it and praise it, view other human beings as a means to fulfill personal individualistic ends.

The point is that deals and dealing within a market economy resembles theft. It means heartless manipulation of a customer seen with a parasitical eye ready to suck the blood or demand the pound of flesh out of credit and loans in order to entice the buyer. The buyer also entices the seller with the colour of money.  Each interaction between two counterparts is a transaction, To sell on terms involves transactions that depend on such things as usury or the confines of controlled market. Such a controlled market is exemplified by the EU single market but can also be seen in global free trade deals.

Socialisation of exchange plans the economy at the level of distribution in a controlled and even manner without any element of barter or dealing. It extends social production as an aspect of society to society at large. Why does it do this? Because the accumulation of wealth is concentrated at the point of production as a result of adding value to a product by the productive forces, which is labour in the main. The selling of the product in a market realises the value added. The issue is that any claim on new values created can be transferred either to the capitalist, the Government and the state or the workers in the form of wages. Taxation, such as, Value Added Tax, or purchase taxes, can be taken as a form of claim. Credit loans and higher purchase schemes have been methods of extracting claims against added value by the financial institutions because of interest on such loans and insurance schemes. Other such claims are made by levies attached in the distribution system involving transportation, wholesale and retail and commercial marketing through advertising.

Transaction tax? Why should the financial oligarchy be able to do transactions in the first place?

The European Union financial transaction tax (EU FTT) was a proposal made by the European Commission to introduce a financial transaction tax (FTT) within some of the member states of the European Union initially by 1 January 2014, later postponed to 1 January 2016, then to the middle of 2016 and then to September 2016. In October the European Commission was instructed to draft the tax by the end of 2016.

In April 2013, George Osborne, the Chancellor of the Exchequer, announced that his country had filed a legal challenge of the decision authorizing the use of enhanced cooperation to implement the FTT with the European Court of Justice.

There are proposals by the Labour Party to target the financial sector with a transaction tax. It has been labelled a, “Robin Hood Tax” to give the impression that it steals from the rich to give to the poor.

The monopolies and banks have squealed, “foul play”, protesting that they will be forced to move vast swathes of their operations out of Britain. Employees in the City, with crocodile tears and threats over 400,000 jobs, as workers in the City would face the sack as Finance Capital flees, so tax receipts would fall and the deficit grow.

It is said that the EU would welcome a financial transaction tax, because Germany could claim the financial headquarters from the City of London and move it to Frankfurt. The European Commission proposed it in 2013 as a way to ‘bolster national coffers’ and “temper irresponsible trading”. The contradiction has sharpened between EU states, particularly the powerful German economy versus the rest and their interests. France was previously the main sponsor of an EU financial transaction tax, but new President, Macron has now said that the levy is not a priority. A financial transaction tax was raised in the EU referendum and since that time, the oligarchs and Conservative representatives in Government still obsess about the dangers to their industry from Brexit.

The real threat to Britain’s economy comes from the transactions and those that control them, the oligarchs. Why should there be such transactions at all either in London, the EU, Hong Kong, Frankfurt or New York? Without which, there would be no such transactions. Mutual exchange of products on the basis of mutual benefit in any part of the world can easily take place without the interference of financial monopoly institutions, The prices of goods can easily be calculated on any new values created on products for comparative exchange. It was estimated by Labour that £4.7bn a year with tax on derivatives trade and bond sale could be made (predicated on a tax rate of 0.2 per cent of the value of transactions for banks) . The billions changing hands in the form of transactions, are nothing compared to the stock and bond exchanges made out of claims on the product extracted through such transaction taxes. These are the real controls sovereign nations could make over trade without such “deals”.

John McDonnell, during the election, had said, ‘In terms of the City of London, the hedge funds, the banks, we need you to pay a bit more, because we need you to invest fairly in our society’ . In response to the Conservative “Magic Money Tree” taunts over funding arrangements, Labour has given its own costings,  Labour wants to expand the current stamp duty on share transactions so that it would apply to market makers. It has said that it would use the money to fund public services.

In 2015, then-chancellor George Osborne, vowed to sue the commission in the European Court of Justice if the tax affected the City of London. The contradiction has sharpened between EU states and their interests. France was previously the main sponsor of an EU financial transaction tax, but for now the new French President has said that he does not now want to make an issue of it.

Modern Communism does not recognise a “transaction tax” as a solution to long-term investment in a sustainable modern economy. At best it can only be seen as a concession to finance capitalism and control of the monopolies and concessions are not solutions. A real solution lies in socialisation of exchange and planned economy at the level of distribution, in a controlled and even manner without any element of barter or dealing. Exchange encompasses transactions and monopoly right to claim on the product through ownership and share in the product. This Monopoly right has to be fundamentally restricted out of the equation, so that the producers can raise their claim to the point, where they are the decision makers as to where investment in the social economy and manufacture can take place.