In the aftermath of the financial crisis of 2007-2008, a general belief has emerged that some practices and behaviours carried out by financial agents have led to risky, selfish and unreliable conduct within financial markets. Such a belief leads to a new discussion on the regulation of the financial sector, comprising possible governmental interventions through corrective taxes.
This article aims to establish the premises and conditions which must be observed in the possible implementation of a Financial Transaction Tax (FTT) with corrective objectives. At this time, it seems to be extremely useful to set forth the fundamental legal basis for this kind of taxation, since the legitimacy or adequacy of all concrete cases and specific legal provisions will depend on such legal grounds.
To reach such an aim, we: (i) address the justification and possible corrective objectives of the taxation on financial market; (ii) establish the basic elements of FTTs; (iii) analyse the reasoning for the implementation of a corrective FTT; and finally, (iv) examine some specific issues related to the effects of the mentioned corrective taxation, which must be addressed in order to ensure the efficiency of such a tax.Intertax