Eurotax on Trades

  • conservativej...

    Posts: 2465

    Feb 14, 2013 10:11 PM GMT
    Perhaps little noticed by most RealJockers for whatever reason, eleven members of the EU are proposing a tax on trades related to eleven members of the block including Germany, France, Greece, Spain, Italy, and others. You can find an article from the WSJ here that provides more descriptive detail:

    Now a big surprise: I am one conservative who supports this tax. My reasons are my own. Let's just say the first to the door on this one is going to win big.
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    Feb 14, 2013 10:46 PM GMT
    It's been around for a long time. It's even got an eponym on this side of the Atlantic: the Tobin tax. this side of the Atlantic, there is a ghostly silence on a transaction tax in respectable political quarters. But that might change. This month, Senator Tom Harkin, Democrat of Iowa, and Representative Peter DeFazio, Democrat of Oregon, plan to reintroduce their bill calling for just such a tax.

    A transaction tax could raise a huge amount of money and cause less pain than many alternatives. It could offset the need for cuts to the social safety net or tax increases that damage consumer demand. How huge a sum? Mr. Harkin and Mr. DeFazio got an estimate from the bipartisan Joint Committee on Taxation, which scores tax plans. It’s a hearty one: $352 billion over 10 years.

    The money would come from a tiny levy. The bill calls for a three-basis-point charge on most trades. A basis point is one-hundredth of a percentage point. So it amounts to 3 cents on every $100 traded.

    A 0.03% transaction levy/fee/tax--is that too much for the market to bear, no pun intended?