Financial Transaction Taxes – Benefits and Costs

Financial Transaction Taxes – Benefits and Costs
A study by Dr. Christopher L. Culp, Senior Advisor at Compass Lexecon, that concludes: (1) The dual goals of FTTs to deter speculation and raise revenue are irreconcilably at odds with one another. (2) FTTs raise the cost of financial transactions often by significant amounts. (3) FTTs likely will have adverse impacts on asset prices and will engender commensurate increases in the cost of capital for many corporations. (4) FTTs likely will divert trading to untaxed jurisdictions and financial markets. (5) FTTs would not necessarily reduce price volatility and, in some instances, can increase price volatility as a result of reduced liquidity. And (6) FTTs are not expected to affect managerial decision making.