The Benefits of a Financial Transactions Tax
December 2008, Dean Baker
The recent economic turmoil has generated renewed interest in a financial transactions tax (FTT).
While such a tax will be vigorously opposed by the financial industry, it offers a very attractive
mechanism for raising revenue that is arguably efficiency-enhancing. Calculations based on 2000
trading volumes showed that a set of scaled transactions taxes, imposed on transfers of stock and
other financial assets, could raise more than $100 billion a year, even assuming large reductions in
trading volume.
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