European Union examines FAT levy for banks
(Reuters): A European Union tax on bank profits and remuneration could raise as much as 25 billion euros annually for cash-strapped governments to repair their economies, the bloc’s executive said on Thursday. The European Commission was outlining its ideas for a Financial Activities Tax (FAT), saying banks were "under taxed" and should contribute to rebuilding economies they damaged. Tax is a matter for national governments in the EU and it is unclear if any the tax will be introduced. The Commission also backed a tax on financial transactions such as stock and bond trades, as called for by Germany and France.
The idea, often referred to as a"Tobin Tax" after the U.S. economist James Tobin who proposed it in the 1970s, should only be introduced on a global basis so as to avoid business shifting elsewhere, EU Tax Commissioner Algirdas Semeta said.
Semeta said the impact of taxes, along with global moves to beef up bank capital and introduce a possible surcharge on big banks, should be studied for their cumulative impact first.
EU states including Britain and Germany are planning a national levy on bank balance sheets to pay for future bailouts and Semeta said all the bloc’s tax moves should be coordinated to avoid overlaps.
Category: Business
The commission are a bunch of statist bureaucrats and a Tobin tax may not happen in the EU, and will certainly not happen elsewhere, but if it does it would be good for Cayman. A lot of money can be routed the long way in an extra millisecond and not ever clear an EU bank or land on its balance sheet–as even the commission apparently recognizes.