EU Parliament had been calling for a financial transaction tax (FTT) for nearly two years and, unsurprisingly, it has adopted last week the proposal drafted by the Commission. One of the arguments that prevailed in the debate that took place at the Parliament and resulted in the adoption of the financial transaction tax proposal was that “the FTT is an integral part of an exit from crisis. It will bring a fairer distribution of the weight of the crisis” (rapporteur Anni Podimata).
According to the Tax Foundation, this year U.S. citizens will pay more than $4 trillion in total federal, state and local taxes. That sum “is $152 billion, or 3.9%, more than they will spend on housing, food, and clothing combined. The data shows that from 1929 to 1980 tax liabilities grew from $10 billion to $751 billion. But expenditures on housing, food, and clothing still was more than that final sum, growing from $41.6 billion to $775.7 billion.
The UK Peers have attacked plans by the European Commission for a Europe-wide financial transaction tax, warning that if introduced, the UK could account for 71% of the revenue it would raise. It is unclear, they said, why the financial sector should be targeted, and the FTT proposal’s reversal of the trend towards horizontal measures is rendering it inappropriate as an EU revenue source.
Everything seems to go wrong in Spain and Madrid’s policy to achieve broader deficit reduction targets looks inappropriate. The Spanish government’s introduction of new legislation to restrict interest deductions for taxation purposes could further reduce the flow of international capital into domestic commercial property, exactly at a time when the depressed local market is an important factor weighing on Spain’s recession-hit economy, the European Public Real Estate Association (EPRA) said.
If adopted as a new own resource of the EU budget the financial transaction tax (FTT) will significantly reduce the contributions of member states to the EU budget, according to estimates presented yesterday by the European Commission. Member States’ contributions would be slashed by €54bn in 2020.The Commission proposes that two thirds of the revenues of the FTT go to the EU budget, reducing by the same amounts Member States’ contributions based on their GNI, with the remaining one third being retained by Member States.
Canada was recently elected by Forbes magazine number one country in the world to do business. Among other things, its corporate tax rate (federal and provincial rates combined) is at 25%, the lowest among G7 countries. But some provinces in Canada still have to be convinced that this is a move in the right direction. May be the fact that revenues from corporate taxes remain high, and even higher than it was before the cuts, will help them.
The Rajoy administration in Spain announced two months ago one of the largest tax increases in recent Spanish history. It aims to raise 6 billion euros ($7.9 billion) — along with a spending cut of nearly 9 billion euros ($11.8 billion). The measure mainly consists of a so-called solidarity surtax to come on top of tax rates on income and capital gains; it also includes an increase in real estate taxes.
On February 16th, 2012 the French Parliament has adopted its version of the so-called Tobin tax; a version that, some says, is partially based on the stamp tax levied in the City. The tax, to be effective August 1st, will be levied on all transactions involving equities from a French company if the capital of that company exceeds €1 billion and regardless of the place where the transaction is carried out. Hence, the tax concerns some 100 French companies publicly traded. Its rate is fixed at 0,1%.
The first of February marks another harsh date for French real estate owners. From this day there are new taxation rules on capital gains realized with the sale of a second home or a land. While previously the capital gains were exonerated if the real estate is owned since more than 15 years, now this delay has been increased to 30 years. The tax on capital gains thus reaches 19% if the property is sold during the five first years after acquisition and the rate is progressively decreasing the following 25 years. One has to add to those taxes the social contributions.