Rethinking the Distortions of Banking

The Robin Tax.

The Robin Tax.
(Photo credit: Wikipedia)

By Hugo Dixon – From the start, Britain opposed the tax (charge to financial transactions — popularly known as a Robin Hood tax), which means it had no chance of being adopted by the European Union as a whole. Now the Netherlands has come out against it, so it cannot even be applied across the euro zone. With the German finance minister, Wolfgang Schäuble, saying that the “smallest thinkable unit” for the tax is the euro zone, it is only a matter of time before the Robin Hood tax is buried.

There is no disguising the fact that it would be complicated to revamp the way that banks are taxed. But given the havoc they caused in the recent financial crisis, the fact that the sector is undertaxed and the way in which the current system distorts economic activity, it is well worth the effort. more>


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