The European Union Financial Transaction Tax : feasibility and desirability

• Autor(a) principal: Saraiva, João Francisco Lopes Coelho de Mascarenhas
• Data de Publicação: 2016
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/21732
• topic: Financial Transaction Tax; European Commission; European financial sector; European Union; Imposto sobre as transacções financeiras; Comissão Europeia; Sector financeiro Europeu; União Europeia; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The roots of a Financial Transaction Tax date back to 1936. At that time, Keynes stated that the implementation of an internationally agreed uniform tax over financial transactions could be a solution to control the volatility of financial markets, an idea that was later developed in the 70’s by James Tobin (1972; 1974). Taking into consideration the arguments in favour and against such tax, the European Commission decided to propose the implementation of a common Financial Transaction Tax in the European Union. The main goals of this thesis are to examine the feasibility and desirability of that proposal. In addition, this essay intends to understand which would be the main implications for the European financial sector and how it would react. In order to do so, this dissertation synthesizes and interprets the main arguments in favour and against the proposal present in the economic literature. The results of this study, based on the information available, point out that not only the proposal seems unfeasible and undesirable, but also that European financial institutions would be able to avoid taxation, a situation that would probably generate negative distortions in financial markets. Moreover, this essay also concludes that are other taxation mechanisms - namely the Financial Activities Tax - that better address European Commission’s desires with the measure.