FTT

  • If the eurozone FTT were adopted by the UK it would probably amount to a big tax cut for the City, but the British are still unlikely to support it because they are so allergic to EU taxes, says the FT’s Alex Barker.
  • Wealthy foreign investors have long used offshore companies to hold property in London, but the scale of the practice is raising eyebrows: between 1999 and 2012 nearly 100,000 UK properties were bought through foreign companies.
  • Central banks are using specific regulatory tools to tackle credit and house price growth, rather than raising interest rates, but there are questions over whether this regulation can stop a boom.
  • MI5 warns British corporate chiefs that foreign intelligence agencies are targeting their IT workers, hoping to use them to gain access to sensitive computer systems.
  • Vox explains Middle East history and the big stories in the region through the medium of maps.

 

Alan Beattie

The answer is “not Tobin”, no matter what this might seem. The Tobin tax is specifically a tax on foreign exchange transactions, originally designed to damp down movements in a notoriously volatile market rather than to raise money. Campaigners for a Financial Transactions Tax(FTT) have sensibly switched attention from said currency tax – which, given the lack of regulation of FX trading, is susceptible to traders simply switching jurisdictions – to levies on bonds and equities sales. Bill Gates, who was asked to look into this issue for the G20, sounds like he will be in favour of something similar, together with eminently sensible ideas such as raising tobacco taxes in developing countries and levies on shipping and airline fuel.

That said, the EU FTT doesn’t look particularly workable – and I’ve even heard rumours it was made deliberately so by sceptical Commission officials trying to sabotage it from within. A tax on transactions in a particular exchange, if it can’t be bypassed, makes perfect sense at least as a money-raising device. The UK, despite its continual whingeing and mewling about an FTT, has taxed British stock transactions through Stamp Duty for a very long time – and added a new version to cope with sales of uncertificated stock. A levy based on the tax residency of the investor looks more difficult to implement, as it is subject to the usual shifting of registration offshore.