http://www.nytimes.com/2013/02/22/business/a-tax-that-could-change-the-trading-game.html?pagewanted=1&_r=0&ref=economy
Europe
wants to start taxing financial trading next year, one way that this helps “is
to reorient the financial system back to financing the real economy” says
Algirdas Semeta. We got to think about the negative effects from this idea as well because financiers claimed a tax would hurt
economic growth and raise the cost of capital for companies (Norris). This could change up trading in countries and
due to the new expenses that companies have to pay they will have to layoff workers,
increasing unemployment and decreasing revenue for companies which leads to
less investment. This could provide a
positive impact to our economy but also there are many risks to suffer. The government should wait and collect more
evidence to better understand if it is going to be a positive outcome than a
negative effect.
I believe placing a tax on trading is a terrible idea. I believe it could deter people from trading leading to a decrease in investment. This could prove to be harmful to a feeble European economy. I agree with Sergio that the government should wait till they collect more evidence so they can better understand the impact this tax might have.
ReplyDeleteThis seems like a very backwards idea. By taxing trade, the EU will be hurting the companies that it expects to jump start their economy. Like Mathew said, this will decrease overall investment as companies will have to compensate for the increase in costs to raise capital.
ReplyDeleteAlthough this tax does seem to propose some negative effects, there has to be a legitimate reason behind it. Whenever the focal point of an economy is on conceptual finances, risk is high. Perhaps, the risk of unemployment from this new policy is less than the risk of a financially-oriented economic system.
ReplyDelete