Sven Giegold

Financial transaction tax: Scholz’ proposal does not deserve the name financial transaction tax

The German Finance Minister Olaf Scholz (SPD) has, at the request of nine other EU finance ministers, presented a final draft on the taxation of financial transactions, which we have seen. Already in September 2011, the European Commission had proposed a financial transaction tax for shares, bonds and derivatives throughout the European Union. Because the Commission proposal did not find a majority, ten EU Member States have been negotiating a Financial Transaction Tax under the Enhanced Cooperation procedure. The Scholz bill provides for a tax of 0.2 percent on shares, but only for companies with a goodwill of more than one billion euros. According to the german newspaper Süddeutsche Zeitung, this would be 145 companies in Germany, and in the ten countries involved – Germany, Belgium, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia – a total of just over 500 companies. At the same time there will be exceptions for capital increases. Each country may also decide for itself whether products for private old-age provision are to be taxed. According to Scholz’ plans, derivatives and bonds – unlike the Commission proposal – are completely exempt from taxation.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group and co-founder of Attac Germany, comments on Olaf Scholz’ draft for a financial transaction tax:

“What Scholz has presented does not deserve the name Financial Transaction Tax. The proposal is false labelling. Only taxing stock trading and sparing derivatives torpedoes the original idea of the tax. This model does neither curb speculative high speed transactions nor generate significant revenues. Derivatives must be taxed equally so that taxpayers do not have to step in for speculative excesses on financial markets. The financial transaction tax needs a broader tax base in order to generate relevant revenues. Scholz’s model has little to do with the original idea. The income from a real financial transaction tax would be ten times higher than Scholz’ tax. A real financial transaction tax would generate about 12 billion a year in Germany. Scholz has also alienated the purpose of the tax. The tax was always intended to make globalisation a little fairer and to combat poverty in the world. Now, small investors are paying for small pensioners. The German government’s basic pension is a step in the right direction, but for this we do not need an ineffective stock exchange tax.

For 20 years development organisations, trade unions, churches and civil society have placed great hopes in the tax. Numerous economists are in favour of a genuine financial transaction tax. Scholz now buries this justice project. For a long time, there has been a majority in the European Parliament for a genuine financial transaction tax, especially thanks to the commitment of European Social Democrats and Greens”.

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