A General Financial Transaction Tax Motives, Revenues, Feasibility and Effects

WIFO, March 2008

76 Pages Posted: 26 Nov 2010

See all articles by Stephan Schulmeister

Stephan Schulmeister

Austrian Institute of Economic Research

Date Written: 2008

Abstract

The issue of whether a tax should be levied on transactions of financial assets (FTT) has been controversial ever since it was proposed by Keynes (1936). The debate turns on the answers to three questions. First, is there excessive trading in financial markets which causes exchange rates, stock prices, and commodities prices to fluctuate excessively over the short run as well as over the long run? Second, would a small tax on financial transactions hamper destabilizing speculation without reducing liquidity beyond the level needed for market efficiency? Third, will the revenues of a general FTT even at a low tax rate be substantial relative to the costs of its implementation?

Suggested Citation

Schulmeister, Stephan, A General Financial Transaction Tax Motives, Revenues, Feasibility and Effects (2008). WIFO, March 2008. Available at SSRN: https://ssrn.com/abstract=1714395 or http://dx.doi.org/10.2139/ssrn.1714395

Stephan Schulmeister (Contact Author)

Austrian Institute of Economic Research ( email )

P.O.Box 91
Vienna, 1103
Austria
+4317982601 242 (Phone)
+4317989386 (Fax)

HOME PAGE: http://stephan-schulmeister.priv.at/

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