Taxing investments in Europe 🇪🇺 A great Idea ?

in LeoFinance2 months ago

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To be able to repay loans, due to the Coronavirus Crisis, European countries are looking for new ways to increase their budget to not be forced to remove funds (again) to other needed priorities like Health or education.

Every 7 year, the European Union reworks his core. This is really soon. During the following weeks they are scheduling their finance, budget and goals for the 7 next year.

And some of the deputies are proposing something.

While there is Value Added Taxes (V.A.T) on most of things at different rates, there is no taxes on Financial transactions. 💵

In France 20% in most of cases and 5,5% on first necessities stuff.

An article from the European commission said that if the financial transaction were taxed, it would add more than 50 billions Euro per year to European Union to split between different countries.

That article made me circumspect. 50 Billions is a lot, but next to the world of finance, it doesn't represent much, especially for an entire continent. So there is my question :

What's the percentage of the tax to have 50 Billions budget for the whole Europe ?

I looked for the answer for a long time because it was at the end of the article. I don't know why, maybe they wanted people to be interested enough to reed the full article to get their answer as I am doing now ?

The answer of it is approximately what I was expecting.

As a lot of people, I would like to be rich, or at least reacher as I am, I don't know if I would think like this if I was but For me, this tax is a great thing, because the financial transaction are probably the "place" where the most of the money is circulating and while I really don't like the idea of a world where speculation makes everything, we live in it so let's try to get the best of it for everyone.

I know that a tax on that transaction could discourage a lot of investors to stop to invest money. If the V.A.T were 20% they would all quit europe to invest in other country with this money and Europe would start to be a prehistoric continent and some dinosaures would start to chase us.

With a more decent rate, it could be possible. I thought of something around 1%. It's really low next to all other taxes but as I said, it can't be discouraging.

The tax rate they chose for their calculation is 0.1%.

Source

For me, this could be at least 0.2 or 0.3% but they probably understand the financial world better than me. I find this to be a good thing. Even if 50 Billions for a continent isn't really huge, these 50 Billions wouldn't be removed from the health budget as governments use to.

I know that 0.1% of a huge transaction could represent a lot of money. But for me, the fact that it still remains 99.9% of the amount shows that this isn't a huge loss.

I'll show you with one of the best exemple I can.

If Apple wanted to invest ALL of their current liquidity (140.71Billions$ is the amount I found), the tax would represent $140.71 millions dollar. Even if this is a huge amount of money, that the eu governments would take without doing nothing, Apple would still have 140,569.29 Millions dollar so 140.56B$ in placements and they will probably earn more than 0.1% with it.

That's why I think this tax IS a good thing and could even be increased a little.

Do you also think like me ?

The next step should be to solve the tax optimization problem of companies which transfer all their taxes to countries with low tax rates. That represent a whole of 14 Billions € only for France.

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