Market leading insight for tax experts
View online issue

Press watch: Financial transaction tax

printer Mail

‘Supporters of a financial transaction tax have a strong ally in the new French president, François Hollande, who wants to recycle the revenue raised from the so-called Tobin tax into growth-enhancing investment projects. On this, if little else, he may have the backing of Angela Merkel, but not of David Cameron, who believes the City would be damaged by the proposed levy.

‘Opponents of the FTT say it would raise the cost of doing business and would hinder rather than stimulate growth. It would cost more for firms to do currency deals and so make exports dearer, and it would push up interest rates, leading to lower investment. A lower level of transactions would mean that the yield from an FTT would be lower than expected. What's more, it would be subject to considerable tax avoidance. Brussels believes it would be nigh-on impossible to avoid paying an FTT but its attempts to quantify the tax's impact do appear to suggest there would be a hit to growth, albeit a modest one.’

Larry Elliott, Economics Editor, The Guardian
15 May 2012