FT.com / Lex / Finance & governance - Tobin or not Tobin.
Full marks to Gordon Brown for suggesting a Tobin tax this weekend. He joins many governments in supporting such a tax.
No marks to the FT for saying:
The Tobin tax should remain a curiosity of economic history.
That if course is true if you wish to promote anti-social activity at cost to the rest of society. Not otherwise.
And no marks at all for arguing:
Getting all the world’s financial centres to sign up, however, seems highly unlikely. Transactions will then migrate to places where the tax is not imposed; creative financial minds are likely to find ways around it in any case.
This is just wrong. 20 banks dominate this trade. You fine them out of existence of they do not comply: upholding the rule of law is absolutely vital and banks are not above it.
Technically this is also wrong: thi tax can be applied to sterling without any agreement from any other nation. All sterling eventually flows through the Bank of England. Taxing it is easy.
Let's stop the myths and excuses: let's deliver the tax.
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[…] this true? Technically this is also wrong: the (Tobin) tax can be applied to sterling without any agreement […]
Re Brown then could not agree more – after America debunked him he looked even more isolated than usual 😉
Why do you think this is workable? If you tax sterling transactions you will just kill off both the currency and the UK as a global banker.
“That if course is true if you wish to promote anti-social activity at cost to the rest of society.”
Nice ad hominem to start off with. Anyone who opposes this fanciful, pie-in-the-sky idea must be an evil creature with ulterior motives. There is a reason why the Tobin tax hasn’t been implemented in the course of history. Obviously you cannot see it.
“Technically this is also wrong: thi tax can be applied to sterling without any agreement from any other nation. All sterling eventually flows through the Bank of England. Taxing it is easy.”
Are you seriously suggesting unilateral Tobin tax? This would be simply suicidal as Alastair says.
Peterm why not try to explain the reason that the Tobin tax has not yet been implemented. Could it have something to do with the fact that financial dealers share with the rest of us an aversion to paying tax, but that unlike the rest of us, they are able to put th epoliticians in an armlock?
You seem to wish to tax banks for the sake of it. “Tobin” taxes have a purpose in imposing minimum margins on transactions and thus creating limits to excessive trading, but taxing all financial transactions for its own sake is not going to build up a reserve for bailouts if the banks are not properly regulated, but if the banks are properly regulated there is no need for a Tobin tax (the cost of which would simply be passed on to customers).
Richard Lawson,
Well an obvious starting point is that any Tobin tax will simply be passed on to the little person in terms of higher borrowing costs and/or lower deposit rates.
Peter
Peter
You don’t really understand Tobin Taxes, do you?
Richard
Peter
We are talking about a ~0.05% tax on financial transactions carried out by casino players in the richest sector in the world. In the real world people pay 10,20,40% tax on money that they have earned by doing real stuff like water, food, fuel housing and waste, and facilitating those provisions.
Moreover, the ordinary people have bailed out said casino players to the tune of £3000 a head, or thereabouts. And the casinos avoid paying tax by byzantine accountancy and the use of tax havens.
In all honesty I have to say that it is really difficult to see any real objection to the Tobin Tax.
Richard, you should open your eyes a bit – if you look around you will see lots of objectors with very real objections. Start with Tobin himslef why not 😉