A 2010 report from the International Monetary Fund identifies the financial sector of the economy-particularly in the United States-as substantially undertaxed.Įven a tiny financial transaction tax would raise tens of billions of dollars in much-needed revenue. government is currently operating at its lowest level of revenues in more than 60 years. ![]() A financial transaction tax would bring in much-needed revenue While the idea of a modest financial transaction tax-or FTT, as it is often known-has been around for a long time, with budget balances and economic growth strained in the aftermath of the Great Recession policymakers around the world are taking a new look at the tax.īelow are five reasons why the world is catching on to the financial transaction tax as a smart policy tool. Though many countries around the world already have a financial transaction tax in place, the United States does not yet levy such a fee on trading. The tiny tax makes some of the most speculative unproductive trading unprofitable, thus steadying markets and promoting real investment while raising much-needed revenues. ![]() financial markets, based on our analysis. It has been more than 70 years since John Maynard Keynes wrote about the value of a financial transaction tax in “mitigating the predominance of speculation over enterprise in the United States.” A financial transaction tax works by levying a miniscule fee on the estimated $2.9 trillion of daily financial activity through the trading of stocks, bonds, and derivatives in U.S.
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