An Idea Whose Time Has Come: Adopt a Financial Transactions Tax

“A growing number of politicians, civil society organizations, economists and some financiers have become strong advocates of a global Financial Transactions Tax (FTT). An FTT is a tiny tax on financial market transactions such as equity, bond, de-rivative or foreign exchange trades.

Political leaders, including the presidents of France and Germany and the prime minister of Britain, back an FTT as one of the best ways to fund programs to fight world poverty, pay for climate mitigation and adaptation costs and make financial institutions pay their fair share of the costs of the global crisis which, in large part, was created by their practices. Prominent economists advo-cate a Financial Transactions Tax as one way to cool down excessive speculation in financial markets, a prin-cipal cause of the economic crisis.

This briefing paper will first explain why an FTT is urgently needed and then situate the current debate in its historical context. Next it will summarize the arguments in favour of an FTT and discuss some of the most com-mon objections to the tax. Finally it will explore how political momentum in favour of an FTT is growing in spite of the reluctance of the Canadian government to lend its support.”

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