A General Financial Transaction Tax: A Short Cut of the Pros, the Cons and a Proposal

  title={A General Financial Transaction Tax: A Short Cut of the Pros, the Cons and a Proposal},
  author={Stephan Schulmeister},
  journal={European Finance eJournal},
The idea of introducing a general financial transaction tax (FTT) has recently attracted rising attention. There are three reasons for this interest: First, the economic crisis was deepened by the instability of stock prices, exchange rates and commodity prices. This instability might be dampened by such a tax. Second, as a consequence of the crisis, the need for fiscal consolidation has tremendously increased. A FTT would provide governments with substantial revenues. Third, the dampening… 

An Idea Whose Time Has Come: Adopt a Financial Transactions Tax

growing number of politicians, civil society organizations, economists and some financiers have become strong advocates of a global Financial Transactions Tax (FTT). An FTT is a tiny tax on financial

The Global Financial Crisis and the Stabilizing Effect of Financial Transaction Taxes

With the liberalization policies that started in the 1980s, almost a race began in lifting the barriers to capital movements, particularly in developing countries, with the aim of achieving capital

Financial Transaction Taxes: Benefits and Cost

Proponents of financial transaction taxes (“FTTs”) claim that such taxes will raise revenue and discourage “destabilizing speculation.” Opponents of FTTs claim that they are unlikely to achieve their

Financial Sector Levies and Taxes: Critical Choices for China Domestically and in the G20

The Global Financial Crisis (GFC) sparked vigorous debate on the role of financial institutions and capital markets, and the extent to which such institutions and markets should contribute to the

A step too far? The European financial transactions tax on shadow banking

ABSTRACT This paper focuses on the European Commission's proposals to include the repo market – a market systemic to European (shadow) banking – in the financial transactions tax (FTT). It asks why

Adopting a Currency Transaction Tax When Avoidance is a Possibility: Which Currencies Would Take the Lead and What Rate Could they Charge?

The need for more funding to address development goal is crucial. Acceptance is growing that transaction taxes of all types can be a useful supplement traditional forms of development finance. This

Financial transaction tax: Small is beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be

A Financial Crisis Manual Causes, Consequences, and Lessons of the Financial Crisis

On the fifth anniversary of the beginning of the Great Recession, there is still no consensus on the lessons to be gleaned from the lingering crisis. What provoked the largest financial and economic

Taxing of financial sector as possible own resource of EU budget

The discussion about the possible taxation of the financial sector has started in the European Union as a result of the financial crisis which has spread to the Europe from the United States in 2008.

Boom-Bust Cycles and Trading Practices in Asset Markets, the Real Economy and the Effects of a Financial Transactions Tax

Over the past three decades, trading in asset markets has become progressively more short-term oriented ("faster"), with traders attempting to exploit intraday price trends. Yet, over this time,



A General Financial Transaction Tax Motives, Revenues, Feasibility and Effects

Speculative trading, especially in the financial derivatives markets, not only increases the volatility of exchange rates, prices for raw materials and share prices over the short run but also over

When financial markets work too well: A cautious case for a securities transactions tax

Unlike most major industrialized nations, the United States does not impose an excise tax on securities transactions. This article examines the desirability and feasibility of implementating a U.S.

Asset Price Fluctuations, Financial Crises and the Stabilizing Effects of a General Transaction Tax

The deepening of the recent crisis was driven by the simultaneous devaluation of stock wealth, housing wealth and commodity wealth. The potential for this devaluation process had been "built up"

Sand in the wheels or spanner in the works? The Tobin tax and global finance

This paper presents a radical critique of the Tobin tax--a tax on currency transactions--by undercutting certain assumptions about the size and character of the world's foreign exchange markets which

Securities Transaction Taxes for U.S. Financial Markets

This paper examines the viability of security transaction excise taxes (STETs) as one policy tool for promoting a more stable financial environment, specifically with respect to the U.S. economy.

A Proposal for International Monetary Reform

a system of pegged parities that relied on the debts in reserve currencies, mostly dollars, to meet growing needs for official reserves. Trif fin and his followers saw the remedy as the

A European VAT on financial services

EU financial services are exempted of VAT for technical reasons. This paper argues that the changed nature of bank-client relationships and advances in information technology have opened the door to

Two Cases for Sand in the Wheels of International Finance

The incompatibility of pegged exchange rates, international capital mobility and national monetary autonomy is a basic postulate of open economy macroeconomies. In the present environment of high

Technical Trading and Trends in the Dollar-Euro Exchange Rate

The study explores the pattern of exchange rate dynamics based on the dollar-euro rate. It documents the performance of technical trading systems in this market, and it analyses the impact of

The Profitability of Technical Stock Trading Has Moved from Daily To Intraday Data

This paper investigates how technical trading systems exploit the momentum and reversal effects in the S&P 500 spot and futures market. When based on daily data, the profitability of 2580 technical