4-consulting were commissioned by New Direction (foundation for European reform) to support Red Tape Watch! This was a series of studies measuring the real impact of European Union regulation of business and the economy. It applies EU modelling techniques to data drawn from EU sources to analyse the cost of EU red tape in terms of jobs and output across the EU and in member states.
The European Commission has adopted a proposal to implement a common European tax on financial transactions through the enhanced co-operation of eleven member state. 4-Consulting researched that The Commission estimates that the annual revenues raised are likely to be in the order of €34 billion across the EU11 (around 0.4% of GDP). It is likely the proposed tax would double current taxes on capital. The tax is projected significantly to influence the structure of the financial services industry with activity in some markets expected to fall by around 75%.
Costs of implementing this policy will reduce economic growth, investment and job creation. It will be difficult to repair public finances when the additional sources of income include government bonds and regional development banks. This involves governments effectively taxing themselves. The tax revenues are uncertain and may be undermined by activities relocating outside of the EU11 or outside of Europe altogether.
"The policy and modelling work undertaken by 4-consulting helped us produce a clear and robust series of reports.”
Tom Miers, Director of New Direction Foundation for European Reform (August 2014)