Tobin, Or Not Tobin?

30 May 2013 By Dominic Elliott

Revisiting Europe’s flawed financial transactions tax was the only way to save it as opposition rose. Brussels plans to dilute it and phase implementation. Mk II is less harmful and will raise less revenue. But there are still better ways to address the under-taxation of finance.

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European countries plan to scale back a proposed financial transactions tax drastically, initially imposing a tiny charge on share deals only and taking much longer than originally intended to achieve a full roll-out, Reuters reported exclusively on May 30.
A redesigned levy would raise only about one tenth of the 35 billion euros once targeted, officials who have worked on the matter told Reuters.
Under the new plan, the standard rate for trading bonds and shares could drop to just 0.01 percent of the value of a deal from 0.1 percent in the original blueprint. The tax would initially cover share trading, from next year, with bond trading only covered up to two years later. Derivatives trading would be covered later, if at all.

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