Financial transaction taxes in the EU

Eleven Eurozone countries recently decided to press ahead with the introduction of a system of taxing financial transactions (sometimes called a “Tobin Tax” after James Tobin, the Nobel-prize winning U.S. economist who first launched the idea).

In this Policy brief, ETUI senior researcher Andreas Botsch focuses on the state of play and the rationale for such a European Financial Transaction Tax (FTT). Not only would such a tax stabilise financial markets, it would also generate revenues to offset the costs of the financial crisis by paying partly for the burdens taken on by governments who had to bail out the failing banks.

The paper also looks at the effects of this tax on workers’ pension savings and the implementation safeguards needed against tax evasion or relocation of financial transactions once the system has been put in place.

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