Europe Eager to Tax Financial Transactions

The European Union recently started down the path of taxing financial transactions.  In January 2013, the European Commission approved a proposal by 11 member-nations to tax stock, currency, and derivatives transactions. The details of the proposed tax have not been completed; once they are, the tax will require final approval by the member-nations.

The tax is expected to raise $30 billion annually, although some estimate that figure could reach $50 billion or even more.  While supporters argue that the tax can help curb behavior which contributed to the global financial crisis, critics believe that it will slow growth in the Eurozone and result in higher costs for consumers of financial services, such as pension funds.

The Obama administration opposes the tax, believing that it will harm U.S. investors.