The EU's Tobin Tax Is Being Resurrected
An EU financial transaction levy is back on the table. It would be far better to try to harmonize corporate tax in the bloc to close much-abused loopholes.
A tax on trading?
Photographer: Peter Boer/Bloomberg
When the European Union first suggested a tax on financial transactions a decade ago, the idea was savaged by banking lobbyists and nixed by many of the bloc’s members. The U.K. said it was “madness.” The initial ambition to raise up to 35 billion euros ($40.6 billion) a year was reduced to a mere 3.5 billion euros, with only 10 countries agreeing to take part. As of last year, the project was barely alive.
But the pressure of how to pay for the Covid-19 pandemic has resurrected the scheme, and the absence of the Brexiting Brits has helped. As the EU’s 27 members move forward with a 750-billion euro recovery fund to prop up those nations worst affected by the virus, they’ve given their blessing “in principle” to new EU-wide tax powers to beef up Brussels’s finances. A levy on financial transactions — as well as ones on digital services, carbon and plastic — will be considered.