TaxCorporate TaxConcern over EU “Tobin tax” plan

Concern over EU "Tobin tax" plan

Plans for an EU-wide tax on financial transactions raises concerns over its impact on global competitiveness

Introducing a European-wide “Tobin tax” would damage its economic
competitiveness, a Tory MEP has warned.

The
European
Parliament
today passed a resolution calling for a global financial
transaction tax to help stabilise financial markets, but if agreement on this
failed to be achieved then Europe should look at going it alone.

Conservatives MEP
Dr
Kay Swinburne
said that the EU must not have tax-raising powers or
damage the EU’s competitiveness.

“Some kind of levy on financial institutions such as the Obama proposal could
bare some merit. However, we must not implement an EU solution to a global
problem. To do so would further reduce competitiveness of the European economy,
and raise the cost of capital to businesses,” said Dr Swinburne.

She also said that the potential for revenues raised to be used on projects
outside of protecting the economic future was unwelcome.

“Any financial levy should be to stabilise the financial system, not to raise
revenue for unrelated projects,” she added.

In a European Parliament statement, it said that any such tax must not harm
the banking system’s ability to perform its “vital role of financing real
economy investments”, or discourage the migration of capital.

“Negative repercussions on small businesses and individual investors must be
avoided,” it added.

The parliament has asked the European Commission to develop a plan for a
transaction tax in time for the EU to present a common position to the G20 in
June.

Further reading:

BBA
pooh-poohs global banking ‘tax’

Treasury
moots Tobin Tax on financial transactions

Tobin
tax is feasible says Nobel winner

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