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A Tobin tax is the suggested tax on all trade of currency across borders. Named after the economist James Tobin, the tax is intended to put a penalty on short-term speculation in currencies. The proposed tax rate would be low, between 0.1% to 0.25%. “Taxes†redirects here. ...
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For the convicted Republican political operative, see James Tobin (political operative). ...
Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. ...
On August 15, 1971, Richard Nixon announced that the US dollar would no longer convert to gold, effectively ending the Bretton Woods system. Tobin suggested a new system for international currency stability, and proposed that such a system include an international charge on foreign-exchange transactions. Professor Tobin later received a Nobel Prize in Economics in 1981. is the 227th day of the year (228th in leap years) in the Gregorian calendar. ...
Year 1971 (MCMLXXI) was a common year starting on Friday (link will display full calendar) of the 1971 Gregorian calendar. ...
Richard Milhous Nixon (January 9, 1913 – April 22, 1994) was the 37th President of the United States, serving from 1969 to 1974. ...
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The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel[1] (Swedish: Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), commonly called the Nobel Prize in Economics, or more acurately the Nobel Memorial Prize in Economic Sciences, is a prize awarded each year for outstanding intellectual...
The idea lay dormant for more than 20 years. In 1997 Ignacio Ramonet, editor of Le Monde Diplomatique, renewed the debate around the Tobin tax with an editorial titled "Disarming the markets". Ramonet proposed to create an association for the introduction of this tax, which was named ATTAC (Association for the Taxation of financial Transactions for the Aid of Citizens). The tax has then become an issue of the antiglobalization movement and a matter of discussion not only behind academic institutions but even in the streets and in parliaments around the world, such as the UK and France. Ignacio Ramonet is a French journalist, the editor-in-chief of Le Monde diplomatique, a left-wing political magazine. ...
This monthly magazine is not to be mistaken for the daily Le Monde. Le Monde diplomatique (nicknamed Le Diplo by its French readers) is a monthly publication offering analysis and opinion on politics, culture, and current affairs. ...
Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC - Association pour la Taxation des Transactions pour lAide aux Citoyens) is an activist organization for the establishment of a tax on exchange transactions. ...
Anti-WEF grafiti in Lausanne. ...
Tobin Tax projects in the world Since one country acting alone would find it very difficult to implement this tax, many argue it would be best implemented by an international institution. It has been proposed that having the United Nations manage a Tobin tax would solve this problem and would give the U.N. a large source of funding independent from donations by participating states. However, there have been initiatives of national dimension about the tax. The foundation of the U.N. The United Nations (UN) is an international organization whose stated aims are to facilitate co-operation in international law, international security, economic development, social progress and human rights issues. ...
The Tobin tax idea was the subject of much discussion in Europe in the summer of 2001. On June 15, 2004, the Commission of Finance and Budget in the Belgian Federal Parliament approved a bill implementing the Spahn tax (a version of the Tobin tax proposed by Paul-Bernd Spahn). According to the legislation, Belgium will introduce the Tobin tax once all countries of the eurozone introduce a similar law.[citation needed] is the 166th day of the year (167th in leap years) in the Gregorian calendar. ...
Year 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ...
Paul-Bernd Spahn is the author of a study On the feasibility of a Currency Transaction Tax, which has gained widespread attention. ...
The Eurozone (also called Euro Area, Eurosystem or Euroland) refers to the European Union member states that have adopted the euro currency union. ...
In Canada, it was revived largely through the efforts of Canadian activists in the 1990s, and in March 1999 the Canadian House of Commons passed a resolution directing the government to "enact a tax on financial transactions in concert with the international community." The House of Commons (French: Chambre des communes) is a component of the Parliament of Canada, along with the Sovereign (represented by the Governor General) and the Senate. ...
In the Americas, the Tobin tax has been supported by the president of Brazil, Luiz Inácio Lula da Silva, and the president of Venezuela, Hugo Chávez; President Chávez announcing his own interest in a Tobin tax in January 2003.[1] World map showing the Americas The Americas are the lands of the Western hemisphere historically considered to consist of the continents of North America and South America with their associated islands and regions. ...
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Hugo Rafael Chávez FrÃas(IPA: ) (born July 28, 1954) is the current President of Venezuela. ...
Original idea and antiglobalization movement In an interview given to Der Spiegel on 2001, James Tobin distanced himself from the antiglobalization movement and continued to state the validity of his proposal, although some opponents of the Tax claimed the contrary.[citation needed] This article or section does not cite its references or sources. ...
- "I have absolutely nothing in common with those anti-globalisation rebels. Of course I am pleased; but the loudest applause is coming from the wrong side. Look, I am an economist and, like most economists, I support free trade. Furthermore, I am in favour of the International Monetary Fund, the World Bank, the World Trade Organisation. They’ve hijacked my name ... The tax on foreign exchange transactions was devised to cushion exchange rate fluctuations. The idea is very simple: at each exchange of a currency into another a small tax would be levied - let's say, 0.1% of the volume of the transaction. This dissuades speculators as many investors invest their money in foreign exchange on a very short-term basis. If this money is suddenly withdrawn, countries have to drastically increase interest rates for their currency to still be attractive. But high interest is often disastrous for a national economy, as the nineties' crises in Mexico, South East Asia and Russia have proven. My tax would return some margin of manoeuvre to issuing banks in small countries and would be a measure of opposition to the dictate of the financial markets."[citation needed]
Tobin observed that, while his original proposal had only the goal of put a brake on the foreign exchange trafficking, the antiglobalization movement had stressed the income from the taxes with which they want to finance their projects to improve the world. He declared himself not contrary to this use of the tax's income, but stressed that it was not the important aspect of the tax. “IMF†redirects here. ...
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For other uses of the initials WTO, see WTO (disambiguation). ...
ATTAC and other organizations have recognized that, while they still consider Tobin's original aim as paramount, they think the tax could produce funds for development needs in the South, and allow governments, and therefore citizens, to reclaim part of the democratic space conceded to the financial markets.
Debate on the tax and critics Opinions are divided between anti-globalizationists who applaud that the Tobin tax could protect countries from spillovers of financial crises, and pro-globalizationists who stress that the tax would also constrain globalization and dry up world liquidity. A KFC franchise in Kuwait. ...
Market liquidity is a business or economics term that refers to the ability to quickly buy or sell a particular item without causing a significant movement in the price. ...
Unexpected, though qualified, support for the Tobin tax has come from the multi-billionaire speculator George Soros, who stated that, while the tax goes against his personal interests, he thinks that its introduction could have positive effects on the world economy. However, he advocates a variation to the Tobin tax: Special Drawing Rights or SDRs that the rich countries would pledge for the purpose of providing international assistance.[2] George Soros (pronounced ) [Shorosh] (born August 12, 1930, in Budapest, Hungary, as György Schwartz) is an American financial speculator, stock investor, philanthropist, and political activist. ...
Special Drawing Rights (SDRs) is a potential claim on the freely usable currencies of International Monetary Fund members. ...
The "City Notebook" column in the British broadsheet The Guardian, August 30, 2001, put the case against such a tax in straightforward terms. It said that currency speculators are "an exceptionally useful lot, working day-in, day-out, risking their own wealth to supply a thing called liquidity. Without liquidity, markets dry up, prices become volatile and goods become difficult to shift." If a Tobin tax were in place, the editorial continued, that useful work would not be as well accomplished. "The net result is that everyone involved — producer, trader, buyer — becomes poorer, not richer", wrote The Guardian.[3] Newspaper sizes in August 2005. ...
The Guardian is a British newspaper owned by the Guardian Media Group. ...
is the 242nd day of the year (243rd in leap years) in the Gregorian calendar. ...
Year 2001 (MMI) was a common year starting on Monday (link displays the 2001 Gregorian calendar). ...
See also Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC - Association pour la Taxation des Transactions pour lAide aux Citoyens) is an activist organization for the establishment of a tax on exchange transactions. ...
Anti-WEF grafiti in Lausanne. ...
It has been suggested that this article or section be merged with Anti-globalization. ...
Paul-Bernd Spahn is the author of a study On the feasibility of a Currency Transaction Tax, which has gained widespread attention. ...
Logo of Jubilee 2000 Jubilee 2000 was an international coalition movement in over 40 countries calling for cancellation of unpayable third world debt by the year 2000. ...
References
Further reading - Harald Hau (2006), The Role of Transaction Costs for Financial Volatility: Evidence from the Paris Bourse, Journal of European Economic Association (June 2006).
- Heikki Patomäki (2003), Democratising Globalisation: The Leverage of the Tobin Tax, Zed Books
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