As European markets slid Wednesday immediately after European Commission President Jose Manuel Barroso confirmed plans for a financial transaction tax, the idea was met with disdain in some quarters.
Barroso said that the tax could raise up to 55 billion euro ($75 billion) to help solve the European debt crisis and confirmed that the Commission had adapted the proposal, first mentioned around two years ago.
"It seems like a stupid policy," John Mauldin, president of Millennium Wave Investments & author of Endgame. "If you tried to do something like that in New York or London, which are handling huge volumes, it may not seem like a lot, but if you start adding up, you have got billions of trades and trillions of dollars of currency trades."
There has been particular concern about the possible introduction of a tax on financial transactions, also known as a Tobin tax, in London, where the London Stock Exchange, the world's fifth-largest bourse, is based. Sweden, which is also in the European Union but not the euro zone, and had its own Tobin tax during the 1980s, has also raised objections.
British business groups such as the Confederation of British Industry (CBI) have spoken out against the proposals and broker Icap has threatened to leave its London base if the tax is introduced.
There are concerns that banks and brokers would move their business elsewhere, particularly to Hong Kong or Singapore, if the proposals are enacted.
German Chancellor Angela Merkel and French President Nicolas Sarkozy gave the plans their support in August.
"This is a reasonable proposal if all countries participate," Hans-Werner Sinn, professor of economics and public finance at the University of Munich, told CNBC. "It imposes a burden on the people involved. Somehow the assumption of markets is that they can get out without paying anything."
As the German and French leaders attempt to get their governments to agree to a second Greek bailout and the extension of the European Financial Stability Facility (EFSF), the tax, likely to be a very small percentage of the value of trades, could help raise more money and show that they are not soft on the banks that many blame for causing the crisis through irresponsible lending.
There have also been suggestions that the tax may become global.
"With this proposal the European Union becomes a forerunner in the global implementation of a financial transaction tax," Algirdas Šemeta, commissioner for taxation, customs, anti-fraud and audit at the European Commission, said in a statement.
"Our project is sound and workable. I have no doubt this tax can deliver what EU citizens expect; a fair contribution from the financial sector. I am confident that our partners in the G20 will see their interest in following this path."
"Governments should not say: 'We are going to tax things just because we don't want you doing that,'" said Mauldin. "You have to be careful about tax policy, it can have all sorts of unintended consequences.
"The place where you really get taxes is from corporate profits and as business moves you are going to see profits go away," he added.