Political

Tobin tax: could it work? would it be desirable?

The BBC website has a head-to-head debate between a supporter and opponent of a financial transactions tax, more commonly known as a Tobin or Robin Hood tax.

Here is a flavour:

There are (at least) three fatal flaws in the plan. Firstly, it will not be the banks but savers and pensioners that foot the bill. Secondly, tax revenues could actually fall not rise as trade moves elsewhere, jobs are lost and the economy shrinks. Finally, instead of promoting stability, it could make markets far more dangerous … The tax did not work in Sweden, and it will not work now.

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The International Monetary Fund, the European Commission and the Gates Foundation have all found that unilateral transaction taxes are feasible. Ironically, the best evidence for this can be found in the UK, where a Stamp Duty of 0.5% on transactions from anywhere in the world in UK shares raises £3bn per year … Lets bring greater balance by raising taxes on an under-taxed sector that has benefited most from globalisation, to fund global public goods that benefit us all.

You can read the full Tobin tax debate here and then why not add your view in the comments below?

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