I was a bit sceptical a few posts back about the proposed European Financial Transaction Tax (see here). To recapitulate, this would be a turnover tax on financial markets. The proposed rate varies: France is apparently contemplating a rate of 0.2%, the European proposal is 0.1% (but only 0.01% on derivatives) and the group out on William Street in Melbourne thought 1% would be a good idea.
In this era of the global village and super-thin margins, I wondered how such a tax could be made to operate unless all the major financial centres in the world introduced it (unlikely?) without relegating the markets in the countries that do introduce it to a position off the world stage. But then I saw in Wikipedia that
in fact transfers of shares in London attract a "Stamp Duty reserve tax"
of 0.5%! Now, I don't know all the ins and outs of the British tax
(it seems to be limited to shares, and seemingly other financial
instruments such as bonds and derivatives aren't covered), but it doesn't seem to have stood in the way of London being a financial centre.
So when I read that a number of European countries are moving forward with the concept of a FTT- see here and here - I was forced to reconsider my initial impression that the Germans and the French might be giving a "free-kick" to London's status as a financial centre. But is the "devil in the detail"? Perhaps a tax on transfers of shares (as in London) is one thing, but it seems the Europeans are contemplating a much broader tax? And when the purpose of a tax is stated to be "to discourage financial speculation" (as distinct from raising revenue), I think there is still a basis for reservations.