Economic Impact Assessment of Financial Transaction Tax
Malgorzata Twarowska and
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Malgorzata Twarowska: Maria Curie-Sklodowska University in Lublin, Poland
Jolanta Szolno-Koguc: Maria Curie-Sklodowska University in Lublin, Poland
The last financial crisis, the role of financial institution in this process and the big scale of public aid to the financial institutions generate many ideas of introduction of new additional tax on financial institutions. There are proposals of financial transaction tax, financial activity tax and different bank taxes. The main ideas and assessment of financial transaction tax are presented in the article. The main subject of analysis are macroeconomic consequence of imposing special tax for financial institutions, the role of such tax for EU budget and stability of financial market. Although the FTT achieves its fiscal target to a certain degree, it clearly misses its main objective. It cannot deter the financial sector from entering into risky business transactions, nor can it prevent future banking crises. The FTT can even jeopardise the stability of the financial markets, as minimum tax rates encourage the leakage of financial transactions within the EU. It is questionable whether a taxation of banks seated in third countries is even admissible at all.
Keywords: tax; finance; management; crisis; European Union (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:tkp:mklp13:1013-1019
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