A Financial Transaction Tax for Europe?

In this article the concept of a tax on financial transactions in Europe is discussed. In the wake of the financial crisis of 2007 the European Union as well as single member states are considering imposing a tax on financial transactions to mitigate short-term, speculative trading and to generate substantial tax revenue to refinance the costs incurred during the crisis. The implementation of a tax on financial transactions would from an economic perspective have a range of consequences for the participants in the global financial markets, which must be considered. The authors analyze the potential economic consequences of a FTT and derive solutions to mitigate negative effects. The paper also intends to derive suggestions concerning the structure of a FTT. Therefore the fundamental structures of different FTT-regimes in selected states are presented. In this regard the authors chose to illustrate the risks as well as the rewards by discussing the experiences of the FTT-regimes in Sweden and in the United Kingdom in depth