What is a financial transaction tax?

Financial transaction tax is a tax collected on certain types of financial transactions, but not for specific assets or organizations. Of course, these taxes are designed to increase revenue, but are often intended to change the behavior of financial institutions and markets, usually to minimize excessive risk and speculation, both behavior that are widely considered harmful to healthy market functioning. Taxes in financial transactions have a very long history, but as a result of the global financial crisis in 2008 they gained much more interest and appeal. The purpose of the purchase or sale of shares that was originally designed by John Maynard Keynes. These taxes, which impose a modest total tax, usually not more than 2% per transaction, are to limit the frequency with which investors buy or sell stocks. Even a modest tax like this would cause some types of fast tuspekulative trading with rn-bruising could reduce both the market volatility and the percentage of speculators in the SROSticking with the number of long -term investors. Experiments with these taxes have not convincingly show whether they are effective in removing bubbles.

currency speculation is another major problem facing modern governments, and various versions of the financial transaction tax have been designed as a possible solution to this danger. Monetary speculators earn money by moving quickly to manipulate the value of the national currency, entering and leaving positions in this currency at high speed. This practice, albeit potentially lucrative, can cause a serious disruption of the value of the nation's currency and can subsequently damage trade and other areas of national financial policy.

Financial transaction tax can be used to reduce this kind of speculation activity. Paul Spahn suggested a tax on a financial transaction that would tax a normal exchange of currency at a very modest rate, a rate that would generate income but not providingSerious motivation to prevent currency exchange, as it would also harm the economic health of the country that uses such a tax. However, if the trade moved the currency of the nation outside the extensive band price, the second, much higher tax rate would be active. This would effectively make it impossible to benefit from speculation of currency, as much higher tax rate would consume all potential profits.

The

Global Financial Crisis in 2008 focused new attention on the possible usefulness of the financial transaction tax. This attention was practical aspects that were to do with the ability to reduce dangerous future speculation. There was also a widespread feeling of outrage on the activities of the banking industry, especially in the UK and the United States, and many politicians' proposals as well as a way to restore money from bankers from stabilization of financial markets.