Tag Archives: tax

Proposal for a European Financial Transactions Tax

Here it is at last: the debated proposal for a Directive on a common system of financial transaction tax. This type of tax was initially proposed by the economist James Tobin.

The idea is to tax a great number of financial instruments – including instruments which are negotiable on the capital market, money-market instruments (with the exception of instruments of payment), units or shares in collective investment undertakings (which include UCITS and alternative investment funds) and derivatives agreements. The tax rates will be set by Member States, but must not be less than 0.1% of the taxable amount in most cases.

According to the Commission the new tax will have progressive distributional effects, i.e. its impact will increase proportionately with income, as higher income groups benefit more from the services provided by the financial sector.



CO2 Tax in Europe?

The idea of CO2 taxation of fuels in Europe is not new. Now Euractiv says that the European Commission is planning to propose a new CO2-related component that is designed to complement a general tax on energy consumption.

The draft suggests that a minimum levy of €0.01 per kilogramme of CO2 could be added to the price of heating fuels like gasoil, kerosene and natural gas. Motor fuels would be taxed either €0.01 or €0.03 per kg/CO2, depending on where they are used.

There are exemptions provided, such as due to distribution imbalances, and a general transitional period for Eastern European Member States until 2021. There is also an idea to pass the draft under the rules of enhanced cooperation. That will allow dissenting Member States to opt out of the new rules.

This is a cross-post from Think 2.