The President of France, Nicolas Sarkozy, this week announced plans for a 0.1% levy on financial transactions, to be implemented in that country through its exchanges in August regardless of whether any other European countries do likewise.
According to the BBC News, details of Sarkozy's plan remain sketchy, but it is to be implemented in August, and will be especially oriented toward taxing equity transactions.
Of course the British Prime Minister, David Cameron, has been outspokenly against any sort of transactions tax that would impact London, and indeed Cameron said on Jan. 26 that any EU provision to that effect would be "madness."
This is not especially a marker of Cameron's Tory loyalties. I don't see how any British PM could take a different stance. London is not only Europe's great financial center, it is one of the handful of leading centers in the world.
Back at home ... Sarkozy faces an election campaign in the coming months. His rival there, Socialist candidate Francois Hollande, has also promised a tax on financial transactions, so Sarkozy may be engaged in a thunder-stealing gambit here, one of those Nixon-goes-to-China things.
One final point: none of this has much to do with the currency-oriented transactions tax once advocated by James Tobin, although the phrase "Tobin tax" is used quite promiscuously these days.
Showing posts with label Tobin tax. Show all posts
Showing posts with label Tobin tax. Show all posts
03 February 2012
28 August 2008
Tobin tax
I'm confident that the trend of history is toward the disaggregation of sovereignty, and I'm happy that Ireland's recent rejection of the latest round of Euro-treaty making looks like an example of that.
That said, there are still efforts underway in the other direction, toward some sort of global political federation. This would require a world tax, and the latest plausible candidate for such a thing is the "Tobin tax."
The original idea, posed by American economist James Tobin in the 1970s as the Bretton Woods structure was unravelling, was that if an international authority imposed a tax upon currency speculators, they'd dampen down the volatility of that market, preventing wild swings in say pound-versus-yen rates that might otherwise generate crises.
Tobin, a Nobel Prize winner, didn't pay much attention to the issue of what would be done with the money once it was collected. The point for him was chiefly to discourage the sort of thing that later made Soros so wealthy.
At any rate, the "Tobin tax" is almost always cited nowadays as a neat idea for collecting money for a lot of idealistic causes as here.
My usual mellow response to Tobin tax supporters, though, is: in your dreams.
Why do I bring it up? Well, I find the original idea behind the proposal intellectually interesting. I wrote about it a few times while at HW, and I'm happy to say that advocates of the tax thought I was being fair to them.
And besides, what else would you have me write about? the news from Denver? Boooooring.
That said, there are still efforts underway in the other direction, toward some sort of global political federation. This would require a world tax, and the latest plausible candidate for such a thing is the "Tobin tax."
The original idea, posed by American economist James Tobin in the 1970s as the Bretton Woods structure was unravelling, was that if an international authority imposed a tax upon currency speculators, they'd dampen down the volatility of that market, preventing wild swings in say pound-versus-yen rates that might otherwise generate crises.
Tobin, a Nobel Prize winner, didn't pay much attention to the issue of what would be done with the money once it was collected. The point for him was chiefly to discourage the sort of thing that later made Soros so wealthy.
At any rate, the "Tobin tax" is almost always cited nowadays as a neat idea for collecting money for a lot of idealistic causes as here.
My usual mellow response to Tobin tax supporters, though, is: in your dreams.
Why do I bring it up? Well, I find the original idea behind the proposal intellectually interesting. I wrote about it a few times while at HW, and I'm happy to say that advocates of the tax thought I was being fair to them.
And besides, what else would you have me write about? the news from Denver? Boooooring.
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