The resolution also raises the stakes to make evading the FTT potentially far more expensive than paying it. Taking the UK stamp duty approach, the text links payment of the FTT to the acquisition of legal ownership rights. This means that if the buyer of a security did not pay the FTT, he or she would not be legally certain of owning that security. As FTT rates would be low, this risk is expected to far outweigh any potential financial gain from evasion.
I think the principle in this last paragraph especially important. What it says is that the right to ownership of an asset is dependent upon having paid the tax due when acquiring it: without that tax having been paid the title to the asset is void and the asset is forfeited to the state.
Isn\’t there just a slight difference between having valid legal title to something and it being forfeit to the State?
For example, I\’ve no idea where the receipt is for the boxer shorts I am currently wearing. I cannot prove that I paid VAT, the required tax, on them. And I\’m not sure I\’m all that worried that I cannot prove valid legal title to said boxer shorts.
But that\’s a little different from stating that this (used!) underwear is now forfeit to the German State isn\’t it?
And of course financial markets are well used to dealing in assets that have no clear, registered, legal title. Ever heard of bearer shares and bonds?