"Many concerns motivate
these proposed taxes. Some people want the financial sector to pay for the
tremendous economic costs that they believe it imposed on everyone in the
global financial crisis of 2008. Others believe that the financial sector
should bear its “fair share” of taxes; such beliefs are particularly strong in
countries where financial transactions are exempt from value-added taxes and
therefore “escape” taxation. Still others simply want new revenues to support
additional government spending, reduce the deficit, or provide tax relief to
other sectors. Finally, some commentators believe that too much financial
activity focuses on short-term rather than long-term goals. They believe that a
transaction tax would force investors and businesses to focus more on long-term
values and less on short-term activities that they perceive to be wasteful."
"Not all taxes are
economically sensible, regardless of how desirable they may appear. A
transaction tax imposed at any economically meaningful rate by only some
countries would cause many transactions to be shifted to other countries,
resulting in far less revenue than a simple static analysis might suggest.
Furthermore, to the extent that a financial transaction tax would generate
substantial revenue, the tax and the associated reduction in liquidity would
lower asset prices. Lower asset prices would cause decreased corporate
investment, resulting in less capital per worker in the long run and thus lower
wages throughout the economy. Therefore, governments should be extremely wary
of introducing or increasing financial transaction taxes."
