Although the European Union could not gain the support needed to implement the Tobin tax on financial transactions, 11 EU countries are expected to implement the tax on their own this year.  See 44 Bloomberg BNA Daily Tax Rpt. I-1 (3/6/13).  Italy was the first, on March 1.  Nor is the issue of a financial transactions tax missing from the American scene.  The Wall Street Trading and Speculators Tax Act, sponsored by Sen. Tom Harkin (D-Iowa), was introduced on February 28.  It would levy a 0.03% tax on most non-consumer financial trading. See 41 Bloomberg BNA Daily Tax Rpt. G-7 (3/1/13).  The Inclusive Prosperity Act, introduced in the House by Rep. Keith Ellison (D-Minn.), would tax stock sales at 0.5%, sales of bonds at 0.10%, and sales derivatives and other investments at 0.005%, with an offset for households with incomes less than $75,000 ($50,000 for individuals).  See 75 Bloomberg BNA Daily Tax Rpt. G-5 (4/18/13).

So far, the Obama Administration has opposed a financial transactions tax.  Former Treasury Secretary Tim Geithner consistently declined to consider such a tax.  His successor, Jacob Lew, said as recently as April 11 that he considers it "very problematic."

However, Senator Harkin is reported as saying that Lew appears more open "in private" to considering the idea.  75 Bloomberg BNA Daily Tax Rpt. G-5 (4/18/13).  Whether this private openness is a sign that the Administration is starting to soften in its opposition is not clear. What is clear is that the internet is full of criticisms to the effect that the Administration's opposition is out of character and reflects Obama's allegiance to Wall Street.

The Administration's public opposition to a financial transaction tax is based on three arguments: the tax would be difficult to enforce, the tax would create incentives for "financial re-engineering," and the tax would "burden retail investors."  Certainly with respect to the Ellison bill, there would be a burden in some measure.  For a household with annual income of at least $75,000, a stock sale of $10,000 would be produce a tax of $50.  Arguments in favor of the two current bills are that a financial transactions tax would generate at least $300 billion in revenue over 10 years (see 41 Bloomberg BNA Daily Tax Rpt. G-7 (3/1/13)) and that it would curb nearly instantaneous, speculative financial trades, which are seen as contributing to economic problems in the United States (see 75 Bloomberg BNA Daily Tax Rpt. G-5 (4/18/13)).

But there seems to be widespread skepticism about the wisdom of imposing a financial transactions tax on an economy struggling mightily to recover.  Even in Italy, the government is resorting to advertisements, newspaper stories, and public addresses to explain the Tobin tax, and--in one poll--nearly 80% of Italians say they are opposed to any new taxes until the country's economic growth improves.  See 44 Bloomberg BNA Daily Tax Rpt. I-1 (3/6/13).

Perhaps the Obama Administration's position going forward will depend on the outcome of its weighing of the factors: (a) fear of undermining economic growth versus (b) the need for revenue, with a wild card factor thrown in--how angry America really is at Wall Street.