What is the Tobin Tax?

Let the big casino roll on.  The financial gambling systems have little to do with production and trade of real goods and have taken on a life of their own.  Cameron's country is no longer a big player in fabrication and production, unfortunately.  It would make sense for him to want the financial fantasy game to be unfettered.  What else do they have?

I believe one of the problems with this besides the question on what to do with the money it raises, is that financial transactions can happen anywhere and such a tax would move economic activity to somewhere that did not impose the tax.  This would send economic activity out of Wall Street and The City to Zurich or Bermuda or somewhere they were not taxed. 


Someone could then speculate in currencies in these non taxed havens just as easy as if they were sitting in London, New York City or any other place in any country in the world.


I believe a lot of what the financial community does around the world is not productive but I do not know if this is the way to manage the dysfunctional behavior they engage in.  Because of a lot of what they do is very productive and it is hard to distinguish good from bad.

Maybe the part of this tax that specifies the proceeds be used to address poverty on a global scale is unworkable, but a penny tax on each transaction will not be enough to send investors looking to third world non-taxing locations to do business.  Not everyone has to institute this tax for it to be a national revenue generator.  It probably won't slow down "the financial speculator storm", but it will cash in on it, and why not? - bailout money needs to come from somewhere.

Marie,

Over 3 trillion dollars a day are traded on financial currency markets.  At .01% that amounts to $300 million a day.  I think some people might move what they do for that money.  This does not include stocks, bonds etc. which would add to the total.


London would lose about $28 billion a year due to the tax.


http://www.londonlovesbusiness.com/news/tobin-tax-could-cost-british-firms-18bn-a-year-says-report/1645.article

Cosgrove and Maher are telling us that the 1% will move their trades overseas just like they moved their profits and money overseas or to islands in the middle of nowhere. Elect Romney and he will initiate the money flight and and help multi-nationals to bring back their overseas profits tax free.. The 1% have no shame..when it comes to money. a half penny transaction tax is lower than any tax on anything..
Almost every damn thing you buy has a sales tax except stocks, bond, currency trades.
Next they will tell you that poor peoples' 401Ks will be impacted..   

Sweden repealed its Tobin tax because it was such a disaster. Financial transactions are highly elastic. Most of it doesn't move elsewhere. Most of it simply disappears. The effect would be much more drastic in the US where 73% of all equity trades are high-frequency.

Taxing transactions in general is a bad idea. There's no benefit to taxing transactions. Tax wealth instead. That means sales tax should only apply to new goods. You tax the creation, not every time you move it around.

JR, If they only do the tax for one day, think of the money the government would rake in! :)
Of course, that day no one would trade.  However, if the transaction tax were on the trade regardless of amount, how much would that be?  How many trades of varying amounts happen each day?  Do you think they'd stop trading because the transaction would cost them a penny?

''Cosgrove and Maher are telling us that the 1% will move their trades overseas just like they moved their profits and money overseas or to islands in the middle of nowhere''


I am sorry, but I do not understand the comment.  Are you disputing what will happen if this tax is imposed or are you just trying to say something negative about people who bring up something that might be relevant.  It is hard to tell with most of your comments what your intent is. 

The market was made for man, not man for the market.  Microsecond trading cretaes no social utility.  The Tobin tax itself may be positive, but certainly a targeted one directed to the transactions should be unobjectionable to anyone of good will. 

But it would also be helpful if all markets joined in, to prevent to proverbial "flags of convenience" that many individuals without loyalty to a nation practice, seeking the benefits of citizenship only when it benefits.

Dave Cameron as Prime Minister of Great Britain is doing his country and everyone else a great service in not agreeing to  damage the very successfully functioning free markets  systems for financial transactions by arbitrarily taxing transactions for international politics  considerations.  Private finacial  markets should be left alone to function for everyone benefits free of arbitrary taxes to beneift international organizations.  

We do not need another grand experiiment is world governemnt using socialist economic models that have always failed politically and economically universally.

No thank you we do not need or want a Tobin Tax.

Ed Gleason (# 6) 

Not every tax is a good tax.  Not that Mirada Global would know that.  The American  Revolution was fougth over the arbitrary imposition of taxes without the imput, approval   and constant review of the people the tax is being imposed on.  The governing principle in America of  "the consent of the goverened", as oppose to the whim and plesures of elistes is the hurdle any tax must meet in America .  And even worldwide local self-determination is the statndard of most democracies.  Not that Miranda Global would be solidly grounded in these basic goerning principles.  Takes must be justified to even be considered.

And most people do not jump at the idea at paying another tax.  They have their own private uses for these money. 


Unless one beleives that government is all-wise and knowing like a god goernemnt really does not have an automatic limitless claim on private money.  In America at least private money investmentis much better spent dollar for dollar compared to say the are estimated half trillion dollar annual cost of waste, fraud and abuse of government programs such as Medicare alone. Most private entities are very careful of where their money goes and used.  Governemnt claims on private money is not automaticlly good to most people. 

And tax proposals on paper are often non mainstream.  For example secular interests seriously propose that churhes should be taxed.  Secular interests have no regard for religion  so they see taxing churches as a matter of equality.  To them the churches are just another business enterprise and therefore should be taxed like any other business.   Basically this is use of taxes to punish, harm or destroy financially people and insitutions not liked by opposing political groups.

Got to be careful with imposing taxes .  The power to tax is the power to destroy or set political groups against one another. But most people know that most taxes are not good taxes becasue they harm rather than help society. 

The constant  "us agin them," the 1% vs the supposed 99% (of which 65% of the American public do not approve) made popular by the Occupiers and the current administration, which we see reflected here in almost every commentary, has had a remarkable, and I believe deleterious, effect upon our country. As Ken Burns pointed out in his documentary on the Civil War, it took that war for the country to refer to itself not as "These United States of America," but rather "The United States of America." Now our president has rallied the forces of divisiveness along economic lines, pitting the economically most successful against the rest for votes. The harm of such demagoguery on his part is that it tears at the fabric of the country's unity. We paid a great price to become The United States of America. We should think twice before supporting the opportunitic dismantling of this great achievement, threatening to become, in the process, These Divided States of America.

I've never bought the argument that this is class warfare.  I have been keenly aware of a dual set of rules my whole adult life.  I suspect I'm not the only one.  The "Occupy" movement and other efforts to rectify our current imbalance I believe are simply things coming to a head.  The 99% or whatever slice you want to make of it, but simply, all us working stiffs, have been playing by the rules, working hard, and barely making material and economic security gains.  Against this toil, we see the rules being queered by the powers that be, whether you call them the 1% or something else, it's those that got that set it up to get and keep more.  The majority of this population has been subject to a deft, subtle (yet at the same time profane), and ongoing class warfare for the last 30 years.  So now that people have finally had enough it becomes divisive?  I think it's justified.  I don't want successful people to have less, but I want the same general set of rules applied.  You take the risk, you get the reward, fine.   But if it's a bad bet then you take the stick too.  As it is, if you've got enough money, the rules allow you to get a reward regardless of the outcome of your risk.  And we know who gets hit with the stick; those of us who didn't make the bet.

I don't want to dismantle the system; I want it fairer, and thereby stronger and less susceptible to the sanctioned gambling we have now.