- 0.15% on the €2000 coming in = €3
- 0.15% on the €2000 in payments (credit card purchases, cheques, bank debits etc) = €3
- Total = €6
I should note that this value could be increased under certain circumstances. For example, I have suggested that the rate for withdrawing cash should be higher than for electronic transactions. Let's assume that the cash withdrawal rate is 5 times the electronic payment rate (I want to discourage cash payments), and that the person uses €200 a month of cash. In this case, the numbers would be
- 0.15% on €1800 = €2.70
- 0.75% on €200 = €1.50
- i.e. an extra €1.20
Even so, the total would be €6 + €1.20 + €1.50 = €8.70, and you would still only be paying tax at 0.435%.
Let's take a completely different case. Imagine you are very wealthy, and you have €1.2 million invested in a bank. No salary - just income from your investments - and you get a return of say 5% on your investments. That's €60,000 a year, or €5,000 a month. Assume that you spend all of that. Here's what you would pay
- 0.15% of €5000 on the money coming in = €7.50
- 0.15% on the €5000 on the money going out = €7;50
- Total €15 tax.
Well, the interesting thing is that the total tax paid is actually hidden, and will depend entirely on how the bank is using your money. Assume that your €1.2 million is invested in a bank that uses your money to speculate. They take €1million of your money and use it to buy dollars, then pounds, then swiss francs, then yen and back to euros again. And it does this sort of operation 100 times a day. Assume 20 trading days a month, that is 2000 trades with €1million, and with 0.3% on every one of them. To work out how much is left, you take (100%-0.3%) and raise it to the power 2000. Result = 2.4%. Your €1 million would have shrunk to just €24,565 - unless of course the bank is doing operations that make a profit of at least 0.3% each time. That's pretty difficult, even for whizz-kid traders with PhDs in Maths.
Something tells me you wouldn't leave your €1.2 million with a bank that did that. Instead, you might use your €1.2 million to invest in something useful, like providing capital to a company that is proposing to manufacture something that people want to buy, or provide services that people actually need.
And if you did that, you would pay 0.15% of €1million when you invested in the company (once), and 0.15% on any dividends that you get paid, or when you sell your share of the company at some later stage. So, you choose? Invest in industry? Or leave your money with the speculators.
Surely, this makes it clear that any rational person with money would choose to maximize their income - and that isn't what happens when you let people speculate with you money.