Now that eleven euro zone countries have approved a financial transaction tax, will U.S. regulators at the U.S. Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) follow suit?
Ironically, though the idea of a financial transaction tax was first proposed by American economist James Tobin, the Europeans are now first to levy the FTT.
“This is a major milestone in tax history,” said Algirdas Semeta of the European Commission.
The historic adoption of the transaction tax was executed through a process called enhanced cooperation, wherein nine or more nations cooperate on legislation with the permission of an EU majority. The U.K., Luxembourg, Malta, and the Czech Republic abstained from the vote in protest.
Critics of the financial transaction tax usually point to the prospect that it will fail unless implemented on a global basis. Those taxed by the process, they argue, will likely turn to foreign markets, therefore undercutting any revenue brought in through the tax and hurting business in the process.
Yet, now that eleven major euro zone countries have adopted the tax, it remains possible that more European nations may join, giving the financial tax much needed momentum.
But will a financial transaction tax ever be adopted in the U.S.?
Read more: Will the CFTC, SEC Follow Europe with a Transaction Tax? | CFTC LAW | Forex, Futures and Derivatives Regulatory News
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