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Those forex tax collectors just love their work!

Bad news for all Forex traders, if British Prime Minister Gordon Brown gets his way - a new tax is being proposed on all currency transactions to help raise up to $50 billion for global aid funds. The proposal also calls for a levy on all mobile phone calls as well as an international lottery to improve health systems in the poorer countries of the world.

What will the new tax be?

The proposal is for what seems a modest 0.005% new tax, which he refers to as a micro-tax; presumably hoping to dupe us into thinking it’s insignificant. He calculates that the annual international Forex trade is worth $1 quadrillion, that’s $1,000 trillion. But the main point is that on a $10,000 transaction you’d end up paying an extra $50 tax. Of course ultimately a lot of this tax could well get passed on to the ‘man in the street’ looking to exchange currency before going abroad on his vacation. Which raises a point that old Gordon Brown doesn’t seem to have thought through - that they’ll have $50 less to spend abroad, possibly in a developing economy - directly helping that local economy to grow and become more self-sustaining!

Global recession hitting global charities.

Whilst the principle behind the proposal might be all well and good, helping those less fortunate than ourselves, it is quite ironic that Gordon Brown and the British finance markets were one of the main reasons for the worlds economy being in such as mess; leading to western aid budgets being slashed. Interestingly Britain isn’t prepared to introduce it themselves to solely there own Forex markets - knowing that the international trade would just disappear abroad. But, Germany, France and the USA are hinting at being prepared to support the proposal - so don’t think the USA will be immune from this new tax, if there ever is international agreement on it.

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