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The European Union should tax financial transactions on its territory even if other world powers do not agree to do the same, the European Parliament said on Tuesday. The financial transaction tax (FTT), also known as “Tobin tax” after United States economist James Tobin who suggested taxing currency exchanges in the 1970s, would see traders pay a small fraction in tax for every operation on the markets.
The EU has supported the idea, but stepped back from it when discussions to introduce it at a global level failed at a summit last year of the Group of 20 (G20) major economies. But the parliament dismissed fears - expressed by several EU governments, as well as by the European Central Bank and the European Commission - that going it alone on the FTT would provoke a capital flight from the bloc. “If imposing this tax worldwide proves too difficult, then the EU should impose it at a European level”, - a statement from the assembly said.
Lawmakers calculated that it could raise “around 200 billion euros (280 billion dollars) a year” and argued capital flight would not be damaging if only "purely speculative trading were to move to other jurisdictions, since this would increase market efficiency.
Non governmental organizations welcomed the parliament`s non-binding suggestion, calling for the extra revenue to be challenged into development and climate change aid. “This is great news.
The EU alone could raise tens of billions of euros to help millions of people pushed into poverty because of bankers’ greed”, - said Elise Ford from Oxfam International. But the EU commissioner for taxation, Algirdas Semeta, stuck to the official line, assuring he would urge current G20 chair France to revive talks on a global FTT, while stressing that a move towards an EU-only tax would be "premature"
Source: GAAP.ru
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