To the dismay of the United States government — not to mention Wall Street — much of Europe seems poised to begin taxing financial trading as soon as next year.
The idea is hardly new, but until now financial markets and institutions have been able to ward off any such tax in most major markets. The financiers claimed a tax would hurt economic growth and raise the cost of capital for companies. They said it would drive trading to other countries, leaving the country that adopted it with less revenue and fewer jobs.
But those arguments have not proved persuasive in Europe, which thinks it has found a way to keep institutions from avoiding the tax.
If Europe proves to be correct, it could turn out to be a seminal moment in the relation of governments to large financial institutions.