Plan for tax on financial trades advances in europe ny times.com
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‘Robin Hood’ Trading Tax Nudged Forward in Europe Log in to see what your friends Log In With Facebook
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By JAMES KANTER
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Published: January 22, 2013
BRUSSELS — A hotly contested tax on financial trades took a big step FACEBOOK What’s Popular Now
forward on Tuesday when European Union finance ministers allowed TWITTER A Map of Human Leeches, Lye and
a vanguard of member states to proceed with the plan. Dignity Spanish Fly
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Enlarge This Image The so-called Robin Hood tax would SAVE
apply to trading in stocks, bonds and E-MAIL
derivatives. Although the tax would
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probably be small — one-tenth of a
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percentage point or less on the value
of a trade — it could earn billions of REPRINTS
euros for struggling European
governments.
Algirdas Semeta, the European
commissioner in charge of tax policy,
called the decision “a major milestone in tax history” and
said the levy could be imposed starting next year. But deep
concerns about how it would work could still lead to delays.
Georges Gobet/Agence France-Presse —
The European Commission, the bloc’s policy-making arm,
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Algirdas Semeta, the European taxstill needs to draft the final legislation, and the 11 states in
commissioner.
favor of the law will have to give their unanimous approval
before it becomes law — two more than the minimum
required for legislation to be drafted.
A significant complication is opposition to the tax by Britain, which has the largest trading
hub in Europe in the City of London. But because Britain has decided to stay outside the
group of states applying the tax, its resistance would probably not stop the plan from
moving ahead.
Among the 27 members of the European Union, the proposal has firm backing from
Germany, France and nine other countries. Others might eventually support the idea,
which is closely associated with James Tobin, a United States economist and Nobel
laureate who suggested a version of it in the 1970s.
Although Britain would not be required to assess the tax, the law could still have an effect
on its financial sector by raising the costs of transactions that involve institutions inside
the tax zone.
The decision to move forward with the tax was “regrettable and likely to serve as another
brake on economic growth,” Richard Middleton, a managing director at the Association for
Financial Markets in Europe, an industry group based in London, said on Tuesday.
Backers of the tax originally expected the proceeds to go to humanitarian and
environmental causes. But the debt crisis and difficulties in the banking sector have
adjusted priorities. Governments are now keener to use the revenue to help prop up shaky
banks and finance the European Union’s budget.
If the plan were applied across the entire bloc, it could generate 57 billion euros annually,
or about 0.5 percent of European Union’s output, according to the European Commission.
But that amount is likely to be significantly less without Britain’s participation.
The next stage is for Mr. Semeta, the European tax commissioner, to propose legislation.
2. He has already suggested a tax of 0.1 percent of the value of stocks and bonds traded, and
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0.01 percent of the value of derivatives trades.
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One challenge is formulating the law so it does not prompt traders to move outside taxed mna3000@gmail.com
jurisdictions. Another is deciding who pays the tax when traders in cities like Frankfurt or Change E-mail Address | Privacy Policy
Paris, where the tax would apply, conduct business with traders in cities like London or
New York, where it would not.
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A version of this article appeared in print on January 23, 2013, on page B6 of the New York edition with the headline:
Proposed Tax On Trading Moves Ahead In Euro Zone.
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