Financial Transaction Taxes in Theory and Practice

Research Report

Financial Transaction Taxes in Theory and Practice

Abstract

In response to the financial market crisis and Great Recession, there has been a resurgence of interest in financial transaction taxes (FTTs) around the world. We estimate that a well-designed FTT could raise about $50 billion per year in the United States and would be quite progressive. We discuss the effects of an FTT on various dimensions of financial sector behavior and its ambiguous effects on economic efficiency.

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