Financial Transaction Taxes in Theory and Practice

National Tax Journal 69(1): 171-216, 2016

46 Pages Posted: 1 Jun 2019

See all articles by Leonard E. Burman

Leonard E. Burman

Tax Policy Center; Maxwell School; Urban Institute; Syracuse University - Center for Policy Research

William G. Gale

Brookings Institution

Sarah Gault

affiliation not provided to SSRN

Bryan Kim

affiliation not provided to SSRN

Jim Nunns

affiliation not provided to SSRN

Steve Rosenthal

Urban-Brookings Tax Policy Center

Date Written: March 2016

Abstract

We explore issues related to a financial transaction tax (FTT) in the United States. We trace the history and current practice of the tax in the United States and other countries, review evidence of its impact on financial markets, and explore the key design issues any such tax must address. We present new revenue and distributional effects of a hypothetical relatively broad-based FTT in the United States, finding that, at a base rate of 0.34 percent, it could raise a maximum of about 0.4 percent of GDP ($75 billion in 2017) in a highly progressive manner.

Keywords: financial transaction tax, taxation of financial sector, FTT design, FTT revenues, FTT distributional effects

JEL Classification: H21, H25, G12

Suggested Citation

Burman, Leonard E. and Gale, William G. and Gault, Sarah and Kim, Bryan and Nunns, Jim and Rosenthal, Steve, Financial Transaction Taxes in Theory and Practice (March 2016). National Tax Journal 69(1): 171-216, 2016. Available at SSRN: https://ssrn.com/abstract=3385503

Leonard E. Burman

Tax Policy Center ( email )

Urban Institute
2100 M Street NW
Washington, DC 20009
United States
2022615742 (Phone)

Maxwell School ( email )

400 Eggers Hall
Syracuse, NY 13244
United States
315-443-3114 (Phone)

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States
202-261-5248 (Phone)

Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

Sarah Gault

affiliation not provided to SSRN

Bryan Kim

affiliation not provided to SSRN

Jim Nunns

affiliation not provided to SSRN

Steve Rosenthal

Urban-Brookings Tax Policy Center ( email )

Urban Institute
2100 M Street NW
Washington, DC 20009
United States
202-261-5511 (Phone)

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