Friday, May 31, 2013

EU backs down on finance tax after they Realize they would Damage the Economy more than they already have

EUROPE is reining in its planned financial transactions tax (FTT), cutting back the level of the tax and limiting its scope dramatically after leaders realised it could do enormous damage to the economy.

The FTT is now likely to affect just share trades at first, rather than bonds and derivatives as originally planned, and at a rate of 0.01 per cent per trade – a tenth of the initial proposal.

The tax will still damage stock prices and make it more expensive for businesses to raise capital, but the damage will be much lower than feared.