“Financial transaction tax on securities transactions.” The responsible EU commission has submitted a draft proposal for a tax of 0.1% on transactions in stocks, loans, shares in investment and money market funds and derivatives in the EU, to be collected from large investors such as banks. Financial products for small investors are not going to be subject to the FTT. Some or all of the estimated >30 billion euros resulting from the tax will be used to bail out the large institutions paying the tax if new crashes occur in future, taking taxpayers off the hook for these institutions’ miscalculation of risks. The FTT will have to be approved unanimously by all EU countries before it can go into effect in Europe as scheduled on 1 Jan 2014.
Update on 12 Nov 2013: Apparently another English name would be a “Tobin tax,” named after Nobel economics laureate James Tobin. It’s a penalty he proposed decades ago on “short-term financial round-trip excursions” in order to “dissuade speculators.”
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