A financial transaction tax got the go-ahead from the EU and could be in effect in up to 9 European countries by the start of 2014.
The tax, though oddly constructed, is a step in the right direction. The strangest thing about the tax is that stock and bond trades are taxed at a much higher rate than derivatives trades. The proposed rate is 0.1 percent for stocks and bonds, compared to 0.01 percent for derivatives. It would make better economic sense — and generate more revenue — if these two rates were switched. But regardless of the details, it is an improvement over the current system in which vast areas of financial activity, involving trillions of dollars in assets, go untaxed.
The new transaction taxes in a few countries will make it easier for other countries to add similar taxes. It will begin to look like a global trend if transaction taxes are eventually added in the United States and Japan.