Which country will be first to cash in on the FTT bonanza?

My recent posts have revealed the colossal scale of financial transactions in Europe. A quick summary could be useful.

• NYSE Liffe Europe : €491 trillion for 2011
• Euroclear : €580 trillion for 2011
• TARGET2 : €613 trillion for 2011
• EURO 1 : €64 trillion for 2011
• LCH.Clearnet Ltd : $270 trillion for 2011
• CLS : $1200 trillion for 2011
• Other securities settlements : €916 trillion in 2010
• Other securities trading : €35 trillion in 2010
• Eurozone payment systems : €132 trillion in 2010
• Non Eurozone Payment systems : €94.6 trillion in 2010

Together, these add up to nearly €4000 trillion - and there are plenty of things that I haven't included here. And it's just for Europe. The numbers for the USA are going to be equally mind-blowing.

Now, all of these are easy targets for anyone wanting to apply a Financial Transaction Tax. But of course, everyone will tell you that anyone stupid enough to introduce such a tax would immediately see the transactions move elsewhere. That may be true if the introduction of the FTT was done in isolation.

But suppose that the country that introduced a modest 0.1% FTT simultaneously abolished other taxes. For example, imagine what would happen if that country abolished all taxes on company profits. Surely, any multinational that currently has all its profits stashed away in some tax haven such as the Cayman Islands would want to open an office in that country and move all of its money there so that it can be used legally. I have seen estimates that there are $20 trillion currently hidden in tax havens by companies like Google Inc and the like. Just imagine what you could do if those $20 trillion suddenly appeared in the country that was bold enough to be first to introduce an FTT.  With the 0.1% FTT applied to the incoming funds, that would already generate $20 billion in revenue.

And of course the banks in the country would now have a lot of extra resources for stimulating the economy. It would be a true bonanza for everyone. Having abolished taxes on company profits, the government would be able to continue by scrapping VAT, income tax, and health and national insurance contributions. They could start reinvesting in education, research, transport, energy etc etc.

Come on. Is anyone out there listening? Who's going to be the first to cash in on the biggest coup in the history of finance? I really hope that it is France.....