The Taxation of Financial Transactions: An Analysis of the French System[La taxation des transactions financières : une analyse du dispositif français]

Debates on the taxation of financial transactions (FTT) are longstanding and primarily focus on its effects on markets and the economy. In practice, however, the FTT is less of a regulatory tool and more of a fiscal instrument. This article examines the FTT from this perspective. Our contribution specifically aims to address two questions generally overlooked in previous studies: who pays the FTT and how? Our analysis focuses mainly on the FTT in force in France (FTT-F). In practice, the FTT-F is not a tax on transactions, but only on transfers OF SHARES that are recorded on a daily basis. A large portion of transactions is excluded from the scheme, which significantly reduces the tax base. It is estimated that the transactions actually taxed represent, in the end, only 15% of the total. The incidence of the FTT primarily impacts financial intermediaries, for whom the reduction in trades represents a loss of income, while individuals bear a minimal cost. Additionally, approximately half of the tax is collected from abroard, and the FTT-F has a strong redistributive aspect. The collection of the FTT-F is not carried out by the public administration but is delegated to Euroclear France, a private company subsidiary of an international group. We propose that the collection should instead be directly handled by the General Directorate of Public Finances (DGFiP), with the support of the Fiancial Markets Authority (AMF), which has the necessary data; there are real synergies between its activity of monitoring stock market transactions and the collection of the FTT-F. This, of course, implies that the human and financial resources of the AMF are increased accordingly. Changing the collection system would improve controls, broaden the tax base, and significantly increase tax revenues, while enhancing transparency and equity.