New article – the case for and potential of a financial transation tax
An extensive review of financial transaction taxes, written by William Barclay, has been published on the Political Affairs online blog. One of the choice paragraphs of this article:
Taxes are best levied when they meet two criteria: first, that they are progressive in impact and, second, that the tax discourages unproductive resource use and may even encourage a shift of resources to socially productive uses. A progressive tax raises more revenue from those individuals or institutions that have more income and or wealth while a tax that discourages unproductive resource may encourage reallocation of resources such as labor and money to uses that are at least as productive as those to which the taxed individuals or institutions would otherwise apply them. An FTT meets both conditions.
The article covers the explosion in equity markets and currency exchange, who would be burdened with a financial transaction tax, and the broader social and economic benefits of the tax. This review of a FTT on US markets and investor community has valuable insights for Australia. Whilst this article may require you to visit ‘investopedia’ or another finance dictionary, it is well worth the effort to get a greater understanding of financial transaction taxes.
Check out the full article here.
