The taxation of Financial Transactions: An estimate of Global Tax Revenues[La taxation des transactions financières : une estimation des recettes fiscales mondiales]

The financial transaction tax (FTT) is often described as a utopia whose implementation would signify an insurmountable impediment to financial markets. However, stock market transactions have been taxed in the United Kingdom since as early as the seventeenth century, in the form of a stamp duty which generates around 4 billion euros each year – and does so without hampering the City's development. Virtually all developed countries have used it at some point, and even today more than thirty countries in the world tax financial transactions, including Switzerland, Hong Kong or Taiwan, as well as France. Actually, it seems that the FTT has the attributes of a good tax. The FTT is not particularly distortive, tax revenues are potentially high, and the collection costs are minimal. It also has a redistributive effect. The equivalent of the UK stamp duty or the French FTT applied by the G20 countries, notwithstanding its numerous exemptions, would raise between 156 and 260 billion euros per year (according to a nominal rate of 0.3% or 0.5%). Extending the tax to derivatives and intraday trades would bring additional revenue, while improving transparency in financial markets.