Why an EU financial transactions tax is a red herring

Ever since it was first mooted in the 1970s, a financial transactions tax (FTT) has often been thought of as an interesting idea that cannot work in practice (because it needs to be adopted universally if it is not to be undermined by tax arbitrage). In other words, the difficulty of implementing the FTT has often been an excuse for not taking a view on its underlying substance.

However, the terms of the debate have now shifted. Many EU countries want to adopt an FTT, whether others do or not. All of which raises two questions: what explains the political momentum behind an FTT; and is it a good rather than just interesting idea?

ESO: Background information: EU commission plans new spin on financial tax http://www.europeansources.info/record/eu-commission-plans-new-spin-on-financial-tax/

ESO: Background information: Barroso backs transactions tax http://www.europeansources.info/record/barroso-backs-transactions-tax/

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