1/4% Tax on all stock trades pushed in NY Times today

Introducing a financial transaction tax across the European Union would wipe out or displace up to 90 per cent of derivatives transactions and hit the bloc’s economic output by almost 1.8 per cent over the long term, according to an official impact assessment.


European officials argue some “mitigating effects” in the final tax design will limit the hit on the economic output to around 0.5 per cent over the long term, in part because the money collected will be invested in areas to stimulate growth.

But in the official model used by the European Commission, imposing a tax of 0.1 per cent on stocks and bond trades and 0.01 per cent on all derivatives is found to reduce long-run gross domestic product in the EU by 1.76 per cent.

Meanwhile in this scenario tax revenues generated amount to just 0.08 per cent of GDP, or €10bn, meaning the levy will cost significantly more than it raises for governments.


Mr Barroso will make the argument that the tax is emphatically justified, in spite of the hit to GDP, because of the enormous taxpayer contribution to shoring up the banking system, which has to date amounted to more than a trillion euros in guarantees. “It is only normal that the financial sector makes its fair contribution,” one commission official said.
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http://www.ft.com/cms/s/0/53d33c34-e924-11e0-9817-00144feab49a.html#axzz1YkMj1apR
 
http://www.ft.com/intl/cms/s/0/53d33c34-e924-11e0-9817-00144feab49a.html#axzz1ZB5VEiGM

New transaction tax would drive trade in derivatives from Europe

José Manuel Barroso, European Commission president, will on Wednesday unveil plans for a new tax on all types of financial instruments used by European investors, arguing it is a fair way for taxpayers to claw back the costs of the banking crisis.

However, a draft European Commission impact assessment of the planned levy, seen by the Financial Times, underlines the dangers of driving business away from the EU, raising costs of capital and damaging the economies of the 27 member states.
 
http://www.ft.com/intl/cms/s/0/c4cb5688-e53c-11e0-852e-00144feabdc0.html#axzz1ZB5VEiGM

UK faces tax plan hit despite mooted opt-out

The European Commission is to propose as early as next week a sweeping new EU tax on financial transactions that could cover the City of London even if the UK opts out.

Under a plan being pushed by José Manuel Barroso, European Commission president, the new tax would apply to “all types of financial instruments” used by European investors.
 
A well-placed EU source said the commission was considering charging a minimum rate of 0.1 per cent on all types of financial transactions, except those for derivatives, on which a minimum 0.05-per-cent rate would apply.

But he warned that the numbers may change.
Taxing derivatives - a financial instrument traders use to bet or hedge against the price of goods - is seen as a way to curb speculation, which has been blamed for exacerbating market anxiety over the eurozone's debt woes.

The tax would not apply to official bodies such as the European Central Bank and the eurozone's bailout fund, nor to currency trading - to avoid making life more complicated for embattled eurozone governments.
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They are not going to learn or even acknowledge there overwhelming hand in the crisis, are they?

http://www.monstersandcritics.com/n...ropose-financial-transaction-tax-on-Wednesday
 
Quote from sheda:
[...]the levy will cost significantly more than it raises for governments.
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Of course the loss in GDP will not hurt the commission who get to receive their shiny new tax, but it will hit the nation states instead.

The commission couldn't care less about the overall destructive economic effect as long as they get more power and more taxes.
 
Quote from Explorer:

Of course the loss in GDP will not hurt the commission who get to receive their shiny new tax, but it will hit the nation states instead.

The commission couldn't care less about the overall destructive economic effect as long as they get more power and more taxes.
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This report is down right scary. So the EC found that the tax will do much more harm than good and they expect these countries to go for that? Why in the hell would any EU or EZ country vote for this piece of garbage.

Simply amazing,

-Guru
 
Possible EU FTT scenario:

1. The EU commisssion proposes an FTT that covers the entire EU (27 countries).

2. The UK, Sweden, the Netherlands and Malta vote against the EU-wide FTT.

3. The EU then proposes a Eurozone only FTT (17 countries).

4. The Netherlands and Malta say they won't participate.

5. The 15 remaining EuroZone countries enact the tax among themselves, and do so in a way that does as much economic damage as possible to the UK, Sweden, the Netherlands and Malta.

6. Financial services companies flee Europe en masse, taking with them hundreds of billions in investment capital, and relocate to the US, Canada, Australia, Singapore, Hong Kong, the Cayman Islands, Dubai, etc.

7. Since Germany is the driving force behind the FTT, the newspaper headline 5 years from now reads: "Germany Destroys Europe -- Again!"
 
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