Financial Transactions Tax: Panacea, Threat, or Damp Squib?

Abstract:     
Attempts to raise a significant percentage of gross domestic product in revenue from a broad-based financial transactions tax are likely to fail both by raising much less revenue than expected and by generating far-reaching changes in economic behavior. Although the side-effects would include a sizable restructuring of financial sector activity, this would not occur in ways corrective of the particular forms of financial overtrading that were most conspicuous in contributing to the crisis.

Number of Pages in PDF File: 37

Keywords: Debt Markets, Emerging Markets, Taxation & Subsidies, Banks & Banking Reform, Economic Theory & Research

working papers series