AIMA Opposes EU Financial Transaction Tax

Jan 17 2012 | 10:07am ET

A hedge fund lobby group has added its voice to those opposed to a proposed EU tax on financial transactions.

The Alternative Investment Management Association, which counts about 1,300 corporate members worldwide, said in a statement that the European Commission proposal—which would impose a tax of 0.1% on equity and bond transactions and 0.01% on derivatives—could lead to a “significant decrease in cross-border trading of financial instruments in the EU, undermining the single market.”

Supporters of the tax—including French President Nicolas Sarkozy and German Chancellor Angela Merkel—say it could raise €55 billion a year. Opponents, including British Prime Minister David Cameron, say this would be more than outweighed by its negative effects on the economy. An Ernst & Young report on the tax suggests its net negative effect could be between €2 billion and €116 billion as a result of decreased economic activity and lower revenue from other taxes.

AIMA CEO Andrew Baker said: “Our analysis concludes that the EU’s proposed financial transaction tax will reduce or eliminate a vast amount of cross-border share and bond trading activity within the European Union, thus undermining the single market. And we are not talking about complex financial transactions but very simple buying or selling of shares undertaken by ordinary investors. This could have very serious unintended consequences—including a further tightening of financing conditions for business—at a critical moment for the European economy.”
  
EU finance ministers are scheduled to discuss the proposed tax in March.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.