Financial transaction tax

Financial transaction tax

Key points:

The EESC feels that:

  • the primary objective of an FTT should be to change behaviour in the financial sector by reducing short-term speculative financial transactions;
  • traditional banking will not be affected by an FTT;
  • the second objective of an FTT is to raise public money. In the long-term, revenues should provide a new general source for public income;
  • the FTT would have a progressive character as the customers of the financial institutions, as well as the institutions themselves, represent the wealthiest parts of society;
  • the introduction of this tax would involve virtually no administrative, technical or economic costs as these transactions are already computerised;
  • with a changed behaviour in the financial sector and at the same time increased public incomes the FTT has what is called a double dividend;
  • a tax rate has to be searched which leads to a balance between these two objectives of the FTT
  • a European system for a Financial Transaction Tax should be kept on the agenda for financial reforms.