Essay on Taxation Policies That Affected Financial Innovation

784 Words Apr 17th, 2016 4 Pages
In section 4 will be presented overview of taxation policies that affected financial innovation. Section 4 will provide evidence from different researches that taxation of financial assets can have either positive or negative effect on innovations of financial sector and evidence that taxation and regulation are one of the most significant impulses to financial innovations.
Section 5 is the empirical work
Section 6 concludes theoretical and empirical work, that there are a lot of underlying causes of financial innovation and one of them is taxation. Taxation and financial regulation have a lot of intersections wit financial innovation and according to White (2000)” Financial regulation has had and will surely continue to have a role in shaping financial innovation. In turn, innovation will surely continue to pose challenges for regulation”.

First known innovations in financial sector came from Mesopotamia. With fast growing urbanization emerged a need in serious finance. Urbanization has lead to invention of accounting technology, financial technology and recording technology. These inventions helped to keep account of people’s obligations. The same time contracts, loans (like mortgages) and property rights were developed. In 640-630 BC appeared first coins in Lydia, manufactured from a natural alloy of silver and gold.

Next significant financial innovations occurred in China. One of them was the invention of paper money which allowed produce and…

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