to ‘throw some sand in the wheels’ of speculative flows. For a currency transaction to be profitable [to the speculator], the change in value of the currency must be greater than the proposed tax. Since speculative currency trades occur on much smaller margins, the Tobin Tax would reduce or eliminate the profits and, logically, the incentive to speculate. The tax is designed to help stabilize exchange rates by reducing the volume of speculation. And it is set deliberately low so as not to have an adverse effect on trade in goods and services or long-term investments.[36]
Is the tax easy to avoid?
Technical feasibility
Although Tobin had said his own tax idea was unfeasible in practice, Joseph Stiglitz, former Senior Vice President and Chief Economist of the World Bank, said, on October 5, 2009, that modern technology meant that was no longer the case. Stiglitz said, the tax is "much more feasible today" than a few decades ago, when Tobin recanted.[37]
However, on November 7, 2009, at the G20 finance ministers summit in Scotland, Dominique Strauss-Khan, head of the International Monetary Fund, said "transactions are very difficult to measure and so it's very easy to avoid a transaction tax."[38]
Nevertheless in early December 2009, economist Stephany Griffith-Jones agreed that the "greater centralisation and automisation of the exchanges and banks clearing and settlements systems ... makes avoidance of payment more difficult and less desirable."[39]
In January, 2010, feasibility of the tax was supported and clarified by researchers Rodney Schmidt, Stephan Schulmeister and Bruno Jetin who noted “it is technically easy to collect a financial tax from exchanges ... transactions taxes can be collected by the central counterparty at the point of the trade, or automatically in the clearing or settlement process."[40][41] (All large-value financial transactions go through three steps. First dealers agree to a trade; then the dealers’ banks match the two sides of the trade through an electronic central clearing system; and finally, the two individual financial instruments are transferred simultaneously to a central settlement system. Thus a tax can be collected at the few places where all trades are ultimately cleared or settled.)[41][42]
When presented with the problem of speculators shifting operations to offshore tax havens, a representative of a “pro Tobin tax” NGO argued as follows:
Agreement between nations could help avoid the relocation threat, particularly if the tax were charged at the site where dealers or banks are physically located or at the sites where payments are settled or ‘netted’. The relocation of Chase Manhattan Bank to an offshore site would be expensive, risky and highly unlikely – particularly to avoid a small tax. Globally, the move towards a centralized trading system means transactions are being tracked by fewer and fewer institutions. Hiding trades is becoming increasingly difficult. Transfers to tax havens like the Cayman Islands could be penalized at double the agreed rate or more. Citizens of participating countries would also be taxed regardless of where the transaction was carried out.[36]
Based on digital technology, a new form of taxation, levied on bank transactions, was successfully used in Brazil from 1993 to 2007 and proved to be evasion-proof, more efficient and less costly than orthodox tax models. In his book, Bank transactions: pathway to the single tax ideal, Marcos Cintra carries out a qualitative and quantitative in-depth comparison of the efficiency, equity and compliance costs of a bank transactions tax relative to orthodox tax systems, and opens new perspectives for the use of modern banking technology in tax reform across the world.[43]
How many nations are needed to make it feasible?
There has been debate as to whether one single nation could unilaterally implement a "Tobin tax." Speaking to this question, Schmidt states,
"It is possible for a single country to apply a securities transaction tax unilaterally without significant capital flight to exchanges in other jurisdictions. There are many examples of such taxes already in existence. Britain levies a "Stamp Duty", a 0.5% tax on purchases of shares of UK companies whether the transaction occurs in the UK or overseas. Such specific financial transaction taxes exist in Austria, Greece, Luxembourg, Poland, Portugal, Spain, Switzerland, Hong Kong, China and Singapore. The state of New York levies a stamp duty on trades taking place on both the New York Stock Exchange and on NASDAQ."[42]
In the year 2000, "eighty per cent of foreign-exchange trading [took] place in just seven cities. Agreement [to implement the tax] by [just three cities,] London, New York and Tokyo alone, would capture 58 per cent of speculative trading."[36]
Evaluating the Tobin tax as a general Financial Transaction Tax (FTT)
Sweden's experience in implementing Tobin taxes in the form of general financial transaction taxes
In July, 2006, analyst Marion G. Wrobel examined the actual international experiences of various countries in implementing financial transaction taxes.[44] Wrobel's paper highlighted the Swedish experience with financial transaction taxes. In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Thus a round trip (purchase and sale) transaction resulted in a 1% tax. In July 1986 the rate was doubled. In January 1989, a considerably lower tax of 0.002% on fixed income securities was introduced for a security with a maturity of 90 days or less. On a bond with a maturity of five years or more, the tax was 0.003%.
The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.[45] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988.[46]
On the day that the tax was announced, share prices fell by 2.2%. But there was leakage of information prior to the announcement, which might explain the 5.35% price decline in the 30 days prior to the announcement. When the tax was doubled, prices again fell by another 1%. These declines were in line with the capitalized value of future tax payments resulting from expected trades. It was further felt that the taxes on fixed-income securities only served to increase the cost of government borrowing, providing another argument against the tax.
Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. On 15 April 1990, the tax on fixed-income securities was abolished. In January 1991 the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the 1990s.
Tobin tax proponents reaction to the Swedish experience
The Swedish experience of a transaction tax was with purchase or sale of equity securities, fixed income securities and derivatives. In global international currency trading, however, the situation could, some argue, look quite different. In 2000, Round argued as follows:
[The Tobin tax] could boost world trade by helping to stabilize exchange rates. Wildly fluctuating rates play havoc with businesses dependent on foreign exchange as prices and profits move up and down, depending on the relative value of the currencies being used. When importers and exporters can’t be certain from one day to the next what their money is worth, economic planning – including job creation – goes out the window. Reduced exchange-rate volatility means that businesses would need to spend less money ‘hedging’ (buying currencies in anticipation of future price changes), thus freeing up capital for investment in new production.[36]
Wrobel's studies do not address the global economy as a whole, as James Tobin did when he spoke of "the nineties' crises in Mexico, South East Asia and Russia,"[7][47] which included the 1994 economic crisis in Mexico, the 1997 Asian Financial Crisis, and the 1998 Russian financial crisis.
Who would gain and who would lose if the Tobin tax (FTT) were implemented?
Views of ABAC (APEC Business Advisory Council) expressed in open letter to IMF
The APEC Business Advisory Council, the business representatives' body in APEC, which is the forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region, expressed its views in a letter to the IMF on 15 February 2010. The APEC Business Advisory Council stated:
We believe that imposition of a global tax is an inappropriate response and a further burden to industries, especially small and medium enterprises, and consumers in the wake of the global financial crisis. We also believe that the proposals under consideration would be harmful for a range of additional reasons, including the practical challenges of implementing any such tax.[48]
In addition, ABAC expressed further concerns in the letter:-
-
Key to the APEC agenda is reduction of transaction costs. The proposal is directly counterproductive to this goal.
-
It would have a very significant negative impact on real economic recovery, as these additional costs are likely to further reduce financing of business activities at a time when markets remain fragile and prospects for the global economy are still uncertain.
-
Industries and consumers as a whole would be unfairly penalized.
-
It would further weaken financial markets and reduce the liquidity, particularly in the case of illiquid assets.
-
Effective implementation would be virtually impossible, especially as opportunities for cross-border arbitrage arise from decisions of certain jurisdictions not to adopt the tax or to exempt particular activities.
-
There is no global consensus why a tax is needed and what the revenue would be used for, and therefore no understanding how much is needed. Any consequential tax would need to be supported by clear consensus for its application.
Note - APEC's 21 Member Economies are Australia, Brunei Darussalam, Canada, Chile, People's Republic of China, Hong Kong, China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, The Republic of the Philippines, The Russian Federation, Singapore, Chinese Taipei, Thailand, United States of America, Viet Nam.
Views of the ITUC/APLN (Asia-Pacific Labour Network) expressed in their statement to the 2010 APEC Economic Leaders Meeting
The International Trade Union Confederation/Asia-Pacific Labour Network ([49]
The ITUC/APLN stated:
APEC Leaders should support measures that will downsize the financial sector and return it to its legitimate function of serving the real economy. Instead of fiscal austerity policies and increased expenditure cuts APEC economies should exploit new sources of finance, such as the Financial Transactions Tax (FTT), and raise more revenue with progressive tax systems.[49]
The ITUC shares its support for Tobin Tax with the Trade Union Advisory Council ([50] on the feasibility, strengths and weaknesses of a potential Tobin Tax. ITUC, APLN and TUAC refer to Tobin Tax as the Financial Transactions Tax.
Would 'regular investors like you and me' lose?
An economist speaking out against the common belief that investment banks would bear the burden of a Tobin tax is Simon Johnson, Professor of Economics at the MIT and a former Chief Economist at the IMF, who in a BBC Radio 4 interview discussing banking system reforms presented his views on the Tobin tax
Evan Davis, BBC Radio 4:
There are various ideas around, aren't there, one of them is a Tobin tax, it's been associated with the [British] Prime Minister—a tax on global financial transactions. Is that a response, do you think, to the problems created by large banks and big bail-outs?
Prof. Simon Johnson:
I think it's hmm... partially a response, or an attempt to respond, that's not my preferred [...] approach to the problem, I think that would lead to a lot of distortions, a lot of moving of activities offshore. If you did it at the full level of the G20, you might be able to get some traction. Evasion at that level would be hard. But still I think it doesn't address the core problem which is really about financial institutions that are 'Too Big to Fail'. Financial transaction tax is more of a tax on regular people like you and me.[51][52]
Let Wall Street Pay for the Restoration of Main Street Bill
In 2009, U.S. Representative Peter DeFazio of Oregon proposed a financial transaction tax in his "Let Wall Street Pay for the Restoration of Main Street Bill". (This was proposed domestically for the United States only.)[53]
Would there be net job losses if a FTT tax was introduced?
Schwabish (2005) examined the potential effects of introducing a stock transaction (or "transfer") tax in a single city (New York) on employment not only in the securities industry, but also in the supporting industries. A financial transactions tax would lead to job losses also in non-financial sectors of the economy through the so-called multiplier effect forwarding in a magnified form any taxes imposed on Wall Street employees through their reduced demand to their suppliers and supporting industries. The author estimated the ratios of financial- to non-financial job losses of between 10:1 to 10:4, that is "a 10 percent decrease in securities industry employment would depress employment in the retail, services, and restaurant sectors by more than 1 percent; in the business services sector by about 4 percent; and in total private jobs by about 1 percent."[54]
It is also possible to estimate the impact of a reduction in stock market volume caused by taxing stock transactions on the rise in the overall unemployment rate. For every 10 percent decline in stock market volume, elasticities estimated by Schwabish[54] implied that a stock transaction ("transfer") tax could cost New York City between 30,000 and 42,000 private-sector jobs, and if the stock market volume reductions reached levels observed by Umlauf (1993) in Sweden after a stock FTT was introduced there ("By 1990, more than 50% of all Swedish trading had moved to London")[26] then according to Schwabish (2005), following an introduction of a FTT tax, there would be 150,000-210,000 private-sector jobs losses in the New York alone.
In 2000, Round argued as follows:
When importers and exporters can’t be certain from one day to the next what their money is worth, economic planning—including job creation—goes out the window. Reduced exchange-rate volatility means that businesses would need to spend less money ‘hedging’ (buying currencies in anticipation of future price changes), thus freeing up capital for investment in new production [and the accompanying new jobs].[36]
The cost of currency hedges—and thus "certainty what importers and exporters' money is worth"—has nothing to do with volatility whatsoever, as this cost is exclusively determined by the interest rate differental between two currencies. Nevertheless, as Tobin said, "If ... [currency] is suddenly withdrawn, countries have to drastically increase interest rates for their currency to still be attractive."[3][4]
Is there an optimum tax rate?
Financial transaction tax rates of the magnitude of 0.1%-1% have been proposed by normative economists, without addressing the practicability of implementing a tax at these levels. In positive economics studies however, where due reference was paid to the prevailing market conditions, the resulting tax rates have been significantly lower.
For instance, Edwards (1993) concluded that if the transaction tax revenue from taxing the futures markets were to be maximized (see Laffer curve), with the tax rate not leading to a prohibitively large increase in the marginal cost of market participants, the rate would have to be set so low that "a tax on futures markets will not achieve any important social objective and will not generate much revenue."[55]
Political opinion
Opinions are divided between those who applaud that the Tobin tax could protect countries from spillovers of financial crises, and those who claim that the tax would also constrain the effectiveness of the global economic system, increase price volatility, widen bid-ask spreads for end users such as investors, savers and hedgers, and destroy liquidity.
Tobin tax proponents response to empirical evidence on volatility
Lack of direct supporting evidence for stabilizing (volatility-reducing) properties of Tobin-style transaction taxes in econometric research is acknowledged by some of the Tobin tax supporters:
Ten studies report a positive relationship between transaction taxes and short-term price volatility, five studies did not find any significant relationship. (Schulmeister et al, 2008, p. 18).[56]
These Tobin tax proponents propose on indirect evidence in their favor, reinterpreting studies which do not deal directly with volatility, but instead with trading volume (with volume being generally reduced by transaction taxes, though it constitutes their tax base, see: negative feedback loop). This allows these Tobin tax proponents to state that "some studies show (implicitly) that higher transaction costs might dampen price volatility. This is so because these studies report that a reduction of trading activities is associated with lower price volatility." So if a study finds that reducing trading volume or trading frequency reduces volatility, these Tobin tax supporters combine it with the observation that Tobin-style taxes are volume-reducing, and thus should also indirectly reduce volatility ("this finding implies a negative relationship between [..] transaction tax [..] and volatility, because higher transaction costs will 'ceteris paribus' always dampen trading activities)." (Schulmeister et al., 2008, p. 18).[56]
Some Tobin tax supporters argue that volatility is better defined as a "long-term overshooting of speculative prices" [57][58] than by standard statistical definitions (e.g., conditional variance of returns[59]) ) which are typically used in empirical studies of volatility.
Unfortunately, all empirical studies on the relationship between transaction costs, trading volume and price volatility in general, and on the possible effects of an FTT on volatility in particular, deal with short-term statistical volatility only. Therefore, the results of these studies cannot help to answer the question whether or not an FTT will mitigate misalignments of asset prices over the medium and long run.
—Schulmeister et al, 2008, p. 11
[56]
The lack of empirical evidence to support or clearly refute the Tobin tax proponents' claim it will reduce "excess" volatility is due in part to a lack of an agreed definition of "excess" volatility that allows to be distinguished and formally measured.[56]
Should speculators be encouraged, penalized or dissuaded?
The Tobin tax rests on the premise that speculators ought to be, as Tobin puts it, "dissuaded."[4][5][6][7] This premise itself is a matter of debate: See Speculation.
Matthew Sinclair, Research Director of TaxPayers' Alliance, argues that "The whole idea of a Tobin tax is based on the flawed view that trading – or speculation – is a bad thing. The truth is that it isn’t: it helps the process of price discovery, makes markets work better, enhances liquidity, ensures that resources are priced correctly and generally helps oil the cogs of the global economy."[29]
On the other side of the debate were the leaders of Germany who, in May 2008, planned to propose a worldwide ban on oil trading by speculators, blaming the 2008 oil price rises on manipulation by hedge funds. At that time India, with similar concerns, had already suspended futures trading of five commodities.[60]
On December 3, 2009, US Congressman Peter DeFazio stated, "The American taxpayers bailed out Wall Street during a crisis brought on by reckless speculation in the financial markets, ... This [ proposed financial transaction tax ] legislation will force Wall Street to do their part and put people displaced by that crisis back to work."[53]
On January 21, 2010, President Barack Obama endorsed the Volcker Rule which deals with proprietary trading of investment banks[61] and restricts banks from making certain speculative kinds of investments if they are not on behalf of their customers.[61] Former U.S. Federal Reserve Chairman Paul Volcker, President Obama's advisor, has argued that such speculative activity played a key role in the financial crisis of 2007–2010.
Volcker endorsed only the UK's tax on bank bonuses, calling it "interesting", but was wary about imposing levies on financial market transactions, because he is "instinctively opposed" to any tax on financial transactions.[62]
Questions of volatility
In February 2010, Tim Harford, writing in the Undercover Economist column of the Financial Times, commented directly on the claims of Keynes and Tobin that 'taxes on financial transactions would reduce financial volatility'.[63] Harford wrote:-
This is possible but far from obvious, when you realise that the tax might encourage bigger, more irregular financial transactions. An analogy: if I have to pay a charge whenever I use a cash machine, I make fewer, larger withdrawals and the amount of money in my wallet fluctuates more widely. Bear in mind, too, that the most bubble-prone asset market is for housing, which is bought in very lumpy, long-term chunks. There isn’t much evidence as to whether transaction charges reduce volatility. On the French stock market, coarser 'tick sizes' raise spreads and act like a tax: they increase volatility. Transaction taxes on Swedish stocks in the 1980s reduced prices and turnover but left volatility unchanged.
Comparing Currency Transaction Taxes (CTT) and Financial Transaction Taxes (FTT)
Research evidence
In 2003, researchers like Aliber et al. proposed that empirical evidence on the observed effects of the already introduced and abolished stock transaction taxes and a hypothetical CTT (Tobin) can probably be treated interchangeably.[64] They did not find any evidence on the differential effects of introducing or removing, stock transactions taxes or a hypothetical currency (Tobin) tax on any subset of markets or all markets.
Researchers have used models belonging to the GARCH family[65][66][67] to describe both the volatility behavior of stock market returns and the volatility behavior of foreign exchange rates. This is used as evidence that the similarity between currencies and stocks in the context of a tax designed to curb volatility such as a CTT (or FTT in general) can be inferred from the almost identical (statistically indistinguishable) behavior of the volatilities of equity and exchange rate returns.
Practical considerations
Hanke et al. state, "The economic consequences of introducing a [currency-only] Tobin Tax are [...] completely unknown, as such a tax has not been introduced on any real foreign exchange market so far".[68] At the same time, even in the case of stock transaction taxes, where some empirical evidence is available, researchers warn that "it is hazardous to generalize limited evidence when debating important policy issues such as the transaction taxes".[26][27]
According to Stephan Schulmeister, Margit Schratzenstaller, and Oliver Picek (2008), from the practical viewpoint it is no longer possible to introduce a non-currency transactions tax (even if foreign exchange transactions were formally exempt) since the advent of currency derivatives and currency exchange-traded funds. All of these would have to be taxed together under a "non-currency" financial transactions tax (such as under certain proposals] in the U.S. in 2009 which, although not intending to tax currencies directly, would still do so due to taxation of currency futures and currency exchange traded funds). Because these three groups of instruments are nearly perfect substitutes, if at least one of these groups were to be exempt, it would likely attract most market volume from the taxed alternatives.[69]
According to Stephan Schulmeister, Margit Schratzenstaller, and Oliver Picek (2008), restricting the financial transactions tax to foreign exchange only (as envisaged originally by Tobin) would not be desirable.[69] Any "general FTT seems...more attractive than a specific transaction tax" (such as a currency-only Tobin tax), because it could reduce tax avoidance (i.e., substitution of similar untaxed instruments), could significantly increase the tax base and could be implemented more easily on organized exchanges than in a dealership market like the global foreign exchange market.[69] (See also the discussion of tax avoidance as it relates to a currency transaction tax.)
On October 5, 2009, Joseph Stiglitz said that any new tax should be levied on all asset classes – not merely foreign exchange, and would be based on the gross value of the assets, thereby helping to discourage the creation of asset bubbles.[37]
Original idea and alter-globalization movement
Tobin's more specific concept of a "currency transaction tax" from 1972 lay dormant for more than 20 years but was revived by the advent of the 1997 Asian Financial Crisis. In December, 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 then became an issue of the global justice movement or alter-globalization movement and a matter of discussion not only in academic institutions but even in streets and in parliaments in the UK, France, and around the world.
In an interview[70] given to the Italian independent radio network Renato Ruggiero, during a Parliamentary debate on the eve of the G8 2001 summit in Genoa. Afterwards James Tobin distanced himself from the global justice movement [71][72] also in an interview given to Der Spiegel in 2001, and continued to state the validity of his proposal,
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 [4][5][6][7] (See last part of quote in the above lead section).
Tobin observed that, while his original proposal had only the goal of "putting 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.
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 (such as the Millennium Development Goals),[32] and allow governments, and therefore citizens, to reclaim part of the democratic space conceded to the financial markets.
In March, 2002, London School of Economics Professor Willem Buiter, who studied under James Tobin, wrote a glowing obituary for the man,[73] but also remarked that, "This [Tobin Tax] ... was in recent years adopted by some of the most determined enemies of trade liberalisation, globalisation and the open society." Buiter added, "The proposal to use the Tobin tax as a means of raising revenues for development assistance was rejected by Tobin, and he forcefully repudiated the anti-globalisation mantra of the Seattle crowd." In September 2009, Buiter also wrote in the Financial Times, "Tobin was a genius ... but the Tobin tax was probably his one daft idea".[74]
In those same "years" that Buiter spoke of, the Tobin tax was also "adopted" or supported in varying degrees by the people who were not, as he put it, "enemies of trade liberalisation." Among them were several supporters from 1990 to 1999, including Larry Summers and several from 2000 to 2004, including lukewarm support from George Soros.
Tobin tax proposals and implementations around the world
It was originally assumed that the Tobin tax would require multilateral implementation, since one country acting alone would find it very difficult to implement this tax. Many people have therefore argued that 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 UN a large source of funding independent from donations by participating states. However, there have also been initiatives of national dimension about the tax. (This is in addition to the many countries that have foreign exchange controls.)
Whilst finding some support in countries with strong left-wing political movements such as France and Latin America, the Tobin tax proposal came under much criticism from economists and governments, especially those with liberal markets and a large international banking sector, who said it would be impossible to implement and would destabilise foreign exchange markets.
Most of the actual implementation of Tobin taxes, whether in the form of a specific currency transaction tax, or a more general financial transaction tax, has occurred at a national level. In July, 2006, analyst Marion G. Wrobel examined the international experiences of various countries with financial transaction taxes.[44]
European Union financial transaction tax
The EU financial transaction tax (EU FTT) is a proposal made by the European Commission in September 2011 to introduce a financial transaction tax within the 27 member states of the European Union by 2014. The tax would only impact financial transactions between financial institutions charging 0.1% against the exchange of shares and bonds and 0.01% across derivative contracts. According to the European Commission it could raise €57 billion every year,[75] of which around €10bn (£8.4bn) would go to Great Britain, which hosts Europe's biggest financial center.[76] It is unclear whether a financial transaction tax is compatible with European law.[77]
If implemented the tax must be paid in the European country where the financial operator is established. This "R plus I" (residence plus issuance) solution means the EU-FTT would cover all transactions that involve a single European firm, no matter if these transactions are carried out in the EU or elsewhere in the world.[78] The scheme makes it impossible for say French or German banks to avoid the tax by moving their transactions offshore,[79] unless they give up all their European customers.[80]
Being faced with stiff resistance from some non-eurozone EU countries, particularly United Kingdom and Sweden, a group of eleven states began pursuing the idea of utilizing enhanced co-operation to implement the tax in states which wish to participate.[81][82] Opinion polls indicate that 41 percent of the British people are in favour of some forms of FTT (see section: Public opinion).
The proposal supported by the eleven EU member states, was approved in the European Parliament in December 2012,[83] and by the Council of the European Union in January 2013.[84][85][86][87] The formal agreement on the details of the EU FTT still need to be decided upon and approved by the European Parliament.[88][89]
Sweden's experience with financial transaction taxes
Wrobel's paper highlighted the Swedish experience with financial transaction taxes.[44] In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Thus a round trip (purchase and sale) transaction resulted in a 1% tax. In July 1986 the rate was doubled. In January 1989, a considerably lower tax of 0.002% on fixed-income securities was introduced for a security with a maturity of 90 days or less. On a bond with a maturity of five years or more, the tax was 0.003%.
The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.[45] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988.[46]
On the day that the tax was announced, share prices fell by 2.2%. But there was leakage of information prior to the announcement, which might explain the 5.35% price decline in the 30 days prior to the announcement. When the tax was doubled, prices again fell by another 1%. These declines were in line with the capitalized value of future tax payments resulting from expected trades. It was further felt that the taxes on fixed-income securities only served to increase the cost of government borrowing, providing another argument against the tax.
Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. On 15 April 1990, the tax on fixed-income securities was abolished. In January 1991 the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the 1990s.
Tobin tax proponents reaction to the Swedish experience
The Swedish experience of a transaction tax was with purchase or sale of equity securities, fixed income securities and derivatives. In global international currency trading, however, the situation could, some argue, look quite different. In 2000, Round argued as follows:
[The Tobin tax] could boost world trade by helping to stabilize exchange rates. Wildly fluctuating rates play havoc with businesses dependent on foreign exchange as prices and profits move up and down, depending on the relative value of the currencies being used. When importers and exporters can’t be certain from one day to the next what their money is worth, economic planning – including job creation – goes out the window. Reduced exchange-rate volatility means that businesses would need to spend less money ‘hedging’ (buying currencies in anticipation of future price changes), thus freeing up capital for investment in new production.[36]
Wrobel's studies do not address the global economy as a whole, as James Tobin did when he spoke of "the nineties' crises in Mexico, South East Asia and Russia,"[7][47] which included the 1994 economic crisis in Mexico, the 1997 Asian Financial Crisis, and the 1998 Russian financial crisis.
United Kingdom experience with stock transaction tax (Stamp Duty)
An existing example of a Financial Transaction Tax (FTT) is Stamp Duty Reserve Tax (SDRT) and stamp duty.[90] Stamp duty was introduced as an ad valorem tax on share purchases in 1808,[91] preceding by over 150 years the Tobin tax on currency transactions. Changes were made in 1963.[92] In 1963 the rate of the UK Stamp Duty was 2%, subsequently fluctuating between 1% and 2%, until a process of its gradual reduction started in 1984, when the rate was halved, first from 2% to 1%, and then once again in 1986 from 1% to the current level of 0.5%.[92]
The changes in Stamp Duty rates in 1974, 1984, and 1986 provided researchers with "natural experiments", allowing them to measure the impact of transaction taxes on market volume, volatility, returns, and valuations of UK companies listed on the London Stock Exchange. Jackson and O'Donnel (1985), using UK quarterly data, found that the 1% cut in the Stamp Duty in April 1984 from 2% to 1% lead to a "dramatic 70% increase in equity turnover".[93] Analyzing all three Stamp Duty rate changes, Saporta and Kan (1997) found that the announcements of tax rate increases (decreases) were followed by negative (positive) returns, but even though these results were statistically significant, they were likely to be influenced by other factors, because the announcements were made on Budget Days.[94] Bond et al. (2005) confirmed the findings of previous studies, noting also that the impact of the announced tax rate cuts was more beneficial (increasing market value more significantly) in case of larger firms, which had higher turnover, and were therefore more affected by the transaction tax than stocks of smaller companies, less frequently traded.[95]
Because the UK tax code provides exemptions from the Stamp Duty Reserve Tax for all financial intermediaries, including market makers, investment banks and other members of the LSE,[96] and due to the strong growth of the contract for difference (CFD) industry, which provides UK investors with untaxed substitutes for LSE stocks, according to the Oxera (2007) report,[92] more than 70% percent of the total UK stock market volume, including the entire institutional volume remained (in 2005) exempt from the Stamp Duty, in contrast to the common perception of this tax as a "tax on bank transactions" or a "tax on speculation". On the other hand, as much as 40% of the Stamp Duty revenues come from taxing foreign residents, because the tax is "chargeable whether the transaction takes place in the UK or overseas, and whether either party is resident in the UK or not."[95]
Sterling Stamp Duty - a currency transactions tax proposed for pound sterling
In 2005 the Tobin tax was developed into a modern proposal by the United Kingdom NGO Stamp Out Poverty. It simplified the two-tier tax in favour of a mechanism designed solely as a means for raising development revenue. The currency market by this time had grown to $2,000 billion a day. To investigate the feasibility of such a tax they hired the City of London firm Intelligence Capital, who found that a tax on Pound sterling wherever it was traded in the world, as opposed to a tax on all currencies traded in the UK, was indeed feasible and could be unilaterally implemented by the UK government.[32]
The Sterling Stamp Duty, as it became known, was to be set at a rate 200 times lower than Tobin had envisaged in 2001, which “pro Tobin tax” supporters claim wouldn't have affected currency markets and could still raise large sums of money. The global currency market grew to $3,200 billion a day in 2007, or £400,000 billion per annum with the trade in sterling, the fourth most traded currency in the world, worth £34,000 billion a year.[97] A sterling stamp duty set at 0.005% as some claim would have raised in the region of £2 billion a year in 2007.[98] The All Party Parliamentary Group for Debt, Aid and Trade published a report in November 2007 into financing for development in which it recommended that the UK government undertake rigorous research into the implementation of a 0.005% stamp duty on all sterling foreign exchange transactions, to provide additional revenue to help bridge the funding gap required to pay for the Millennium Development Goals.[99]
Multinational proposals
In 1996 the United Nations Development Programme sponsored a comprehensive feasibility and cost-benefit study of the Tobin tax: Haq, Mahbub ul; Kaul, Inge; Grunberg, Isabelle (August 1996). The Tobin Tax: Coping with Financial Volatility. Oxford University Press. ISBN 978-0-19-511180-4.
European idea for a 'first Euro tax'
In late 2001, a Tobin tax amendment was adopted by the French National Assembly. However, it was overturned by March 2002 by the French Senate.[100][101][102]
On June 15, 2004, the Commission of Finance and Budget in the Belgian Federal Parliament approved a bill implementing a Spahn tax.[103] According to the legislation, Belgium will introduce the Tobin tax once all countries of the eurozone introduce a similar law.[104] In July 2005 former Austrian chancellor Wolfgang Schüssel called for a European Union Tobin tax to base the communities' financial structure on more stable and independent grounds. However, the proposal was rejected by the European Commission.
On November 23, 2009, the President of the European Council, Herman Van Rompuy, after attending a meeting of the Bilderberg Group argued for a European version of the Tobin tax.[105][106] This tax would go beyond just financial transactions: "all shopping and petrol would be taxed.".[105] Countering him was his sister, Christine Van Rompuy, who said, "any new taxes would directly affect the poor".[107]
On June 29, 2011, the European Commission called for Tobin-style taxes on the EU's financial sector to generate direct revenue starting from 2014. At the same time it suggested to reduce existing levies coming from the 27 member states.[108]
Support in some G20 nations
The first nation in the G20 group to formally accept the Tobin tax was Canada.[109] On March 23, 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."[36] However, ten years later, in November 2009, at the G20 finance ministers summit in Scotland, the representatives of the minority government of Canada spoke publicly on the world stage in opposition to that Canadian House of Commons resolution.[38]
In September 2009, French president Nicolas Sarkozy brought up the issue of a Tobin tax once again, suggesting it be adopted by the G20.[110]
On November 7, 2009, prime minister Gordon Brown said that G-20 should consider a tax on speculation, although did not specify that it should be on currency trading alone. The BBC reported that there was a negative response to the plan among the G20.[38]
By December 11, 2009, European Union leaders expressed broad support for a Tobin tax in a communiqué sent to the International Monetary Fund.[12] On that day, the Financial Times reported the following:
Since the Nov 7 [2009] summit of the G20 Finance Ministers , the head of the International Monetary Fund, Mr Strauss-Kahn seems to have softened his doubts, telling the CBI employers' conference: "We have been asked by the G20 to look into financial sector taxes. ... This is an interesting issue. ... We will look at it from various angles and consider all proposals." [111]
For supporters of a Tobin tax, there is a wide range of opinion on who should administer a global Tobin tax and what the revenue should be used for. There are some who think that it should take the form of an insurance: In early November 2009, at the G20 finance ministers summit in Scotland, the British Prime Minister "Mr. Brown and Nicolas Sarkozy, France’s president, suggested that revenues from the Tobin tax could be devoted to the world’s fight against climate change, especially in developing countries. They suggested that funding could come from “a global financial transactions tax." However British officials later argued the main point of a financial transactions tax would be provide insurance for the global taxpayer against a future banking crisis."[12][38]
The feasibility of gradual implementation of the FTT, beginning with a few EU nations
John Dillon contends that it is not necessary to have unanimous agreement on the feasibility of an international FTT before moving forward. He proposes that it could be introduced gradually, beginning probably in Europe where support is strongest. The first stage might involve a levy on financial instruments within a few countries. Stephan Schulmeister of the Austrian Institute for Economic Re-search has suggested that initially Britain and Germany could implement a tax on a range of financial instruments since about 97% of all transactions on European Union exchanges occur in these two countries [42]
This scenario is possible, given the events in May and June, 2010:
Two simultaneous taxes considered in the European Union
On June 28, 2010, the European Union's executive said it will study whether the European Union should go alone in imposing a tax on financial transactions after G20 leaders failed to agree on the issue.
The financial transaction tax would be separate from a bank levy, or a resolution levy, which some governments are also proposing to impose on banks to insure them against the costs of any future bailouts. EU leaders instructed their finance ministers, in May, 2010, to work out by the end of October 2010, details for the banking levy, but any financial transaction tax remains much more controversial.[114]
Latin America - Bank of the South
In early November 2007, a regional Tobin tax was adopted by the Bank of the South, after an initiative of Presidents Hugo Chávez from Venezuela and Néstor Kirchner from Argentina.[115]
UN Global Tax
According to Stephen Spratt, "the revenues raised could be used for ... international development objectives ... such as meeting the extreme poverty, reducing child mortality rates, fighting disease epidemics such as AIDS, and developing a global partnership for development.[116]
In 2000, a representative of a “pro Tobin tax” NGO proposed the following:
In the face of increasing income disparity and social inequity, the Tobin Tax represents a rare opportunity to capture the enormous wealth of an untaxed sector and redirect it towards the public good. Conservative estimates show the tax could yield from $150-300 billion annually. The UN estimates that the cost of wiping out the worst forms of poverty and environmental destruction globally would be around $225 billion per year.[36]
At the UN September 2001 World Conference against Racism, when the issue of compensation for colonialism and slavery arose in the agenda, Fidel Castro, the President of Cuba, advocated the Tobin Tax to address that issue. (According to Cliff Kincaid, Castro advocated it "specifically in order to generate U.S. financial reparations to the rest of the world," however a closer reading of Castro's speech shows that he never did mention "the rest of the world" as being recipients of revenue.) Castro cited Holocaust reparations as a previously established precedent for the concept of reparations.[117][118]
Castro also suggested that the United Nations be the administrator of this tax, stating the following:
May the tax suggested by Nobel Prize Laureate James Tobin be imposed in a reasonable and effective way on the current speculative operations accounting for trillions of US dollars every 24 hours, then the United Nations, which cannot go on depending on meager, inadequate, and belated donations and charities, will have one trillion US dollars annually to save and develop the world. Given the seriousness and urgency of the existing problems, which have become a real hazard for the very survival of our species on the planet, that is what would actually be needed before it is too late.[117]
On March 6, 2006, US Congressman Ron Paul stated the following:
The United Nations remains determined to rob from wealthy countries and, after taking a big cut for itself, send what’s left to the poor countries. Of course, most of this money will go to the very dictators whose reckless policies have impoverished their citizens. The UN global tax plan ... resurrects the long-held dream of the 'Tobin Tax'. A dangerous precedent would be set, however: the idea that the UN possesses legitimate taxing authority to fund its operations.[119]
Support and opposition
See also
References
-
^ a b c d e f g James Tobin (July–October 1978). "A Proposal for International Monetary Reform". Eastern Economic Journal (Eastern Economic Association): 153–159. Retrieved 2010-01-31.
-
^ a b Excerpt from original German article: "wie die Krisen in Mexiko, Südostasien und Russland während der neunziger Jahre gezeigt haben. Meine Steuer würde Notenbanken kleiner Länder Handlungsspielraum zurückgeben und dem Diktat der Finanzmärkte etwas entgegensetzen." - Christian Von Reiermann, and Michaela Schießl (03/09/2001). "Die missbrauchen meinen Namen (translated as "They Are Misusing My Name") (Interview with James Tobin)". Spiegel Online. Retrieved 2010-01-01.
-
^ a b c """James Tobin: "The antiglobalisation movement has highjacked my name. Jubilee Research, a successor to
-
^ a b c d e f Christian Von Reiermann, and Michaela Schießl (03/09/2001). "Die missbrauchen meinen Namen (translated as "They Are Misusing My Name") (Interview with James Tobin)". Spiegel Online. Retrieved 2010-01-01.
-
^ a b c d Excerpt from original German article:"SPIEGEL: Diese Bewegung will die Einführung einer Steuer auf Devisengeschäfte. Damit sollen die Kapitalmärkte gebändigt und mit den zusätzlichen Einnahmen die Entwicklungshilfe verstärkt werden. Klingt das nicht wie Ihr Vorschlag? Tobin: Ich hatte vorgeschlagen, die Einnahmen der Weltbank zur Verfügung zu stellen. Aber darum ging es mir gar nicht. Die Devisenumsatzsteuer war dafür gedacht, Wechselkursschwankungen einzudämmen. Die Idee ist ganz simpel: Bei jedem Umtausch von einer Währung in die andere würde eine kleine Steuer fällig, sagen wir von einem halben Prozent des Umsatzes. So schreckt man Spekulanten ab. Denn viele Investoren legen ihr Geld sehr kurzfristig in Währungen an. Wird dieses Geld plötzlich zurückgezogen, müssen die Länder die Zinsen drastisch anheben, damit die Währung attraktiv bleibt. Hohe Zinsen aber sind oft desaströs für die heimische Wirtschaft, wie die Krisen in Mexiko, Südostasien und Russland während der neunziger Jahre gezeigt haben. Meine Steuer würde Notenbanken kleiner Länder Handlungsspielraum zurückgeben und dem Diktat der Finanzmärkte etwas entgegensetzen." - Christian Von Reiermann, and Michaela Schießl (03/09/2001). "Die missbrauchen meinen Namen (translated as "They Are Misusing My Name") (Interview with James Tobin)". Spiegel Online. Retrieved 2010-01-01.
-
^ a b c d Speigel Online International (09/03/2001). "They are misusing my name". English Summaries [of quotes in Spiegel Online]. Speigel Online International. Retrieved 2010-01-01.
-
^ a b c d e James Tobin-El movimiento antiglobalización abusa de mi nombre
-
^ a b c John Maynard Keynes (1936). "The General Theory of Employment, Interest and Money". pp. 104, 105 (Chapter 12, Part VI). (Online publisher: Project Gutenberg of Australia eBooks; via biblioeconomicus.googlepages.com)
-
^ a b
-
^ Asia Society: Speeches
-
^ Peter Wahl and Peter Waldow (April 1, 2001). "Currency Transaction Tax - a Concept with a Future". World Economy, Ecology & Development Association (WEED). Retrieved 11 February 2010.
-
^ a b c Tony Barber (2009-12-11). "EU leaders urge IMF to consider global Tobin tax".
-
^ a b c
-
^ a b c Ellen Frank (February 2002). "Heavy surf & tsunamis".
-
^ a b Erturk, Korkut (2006). "On the Tobin Tax". Review of Political Economy 18 (1): 71–78.
-
^ Westerhoff, F. (2003). "Heterogeneous traders and the Tobin Tax". Journal of Evolutionary Economics 13 (1): 53–70.
-
^ Palley, T. (1999). "Speculation and Tobin Tax: why sand in the wheels can increase economic efficiency". Journal of Economics 69 (2): 113–126.
-
^ Davidson, P. (1997). "Are grains of sand in the wheels of international finance sufficient to do the job when boulders are often required?". Economic Journal 107 (442): 671–686.
-
^ Davidson, P. (1998). "Efficiency and fragile speculative financial markets: against the Tobin Tax and for a creditable market maker". American Journal of Economics and Sociology 57 (4): 639–666.
-
^ Shang-Jin Wei and Jungshik Kim (March 1999). "The Big Players in the Foreign Exchange Market: Do They Trade on Information or Noise?". Center for International Development at
-
^ Westerhoff, F; Dieci, R (2006). "The effectiveness of Keynes–Tobin transaction taxes when heterogeneous agents can trade in different markets: A behavioral finance approach☆". Journal of Economic Dynamics and Control 30 (2): 293.
-
^ Kerbl S (2010) "Regulatory Medicine Against Financial Market Instability: What Helps And What Hurts?" arXiv.org. arXiv:1011.6284
-
^ Mannaro K, Marchesi M and Setzu A (2008) "Using an artificial financial market for assessing the impact of tobin-like transaction taxes." Journal of Economic Behavior & Organization,67(2)::445-462.
-
^ Lanne, Markku; Vesala, Timo (2009). "The effect of a transaction tax on exchange rate volatility". International Journal of Finance & Economics: n/a.
-
^ Werner, Ingrid M. (2003). "Comment on ‘Some Evidence that a Tobin Tax on Foreign Exchange Transactions may Increase Volatility’". European Finance Review 7 (3): 511–514.
-
^ a b c Umlauf, Steven R. (1993). "Transaction taxes and the behavior or the Swedish stock market". Journal of Financial Economics 33 (2): 227–240.
-
^ a b Liu, Shinhua & Zhu, Zhen (2009). "Transaction Costs and Price Volatility: New Evidence from the Tokyo Stock Exchange". Journal of Financial Services Research 36 (1): 65–83.
-
^ Hu, Shing-yang (1998). "The effects of the stock transaction tax on the stock market: Experiences from Asian markets". Pacific-Basin Finance Journal 6 (3–4): 347–364.
-
^ a b http://www.taxpayersalliance.com/media/2009/11/city-am-matthew-sinclair-a-tobin-tax-would-destroy-london-without-making-the-world-safer.html
-
^ Garber, Peter M. (1996). "Issues of Enforcement and Evasion in a Tax on Foreign Exchange Transactions,” in: The Tobin Tax: Coping with Financial Volatility. Mahbub ul Haq, Inge Kaul, and Isabelle Grunberg, eds. (New York, Oxford: Oxford University Press, 1996), p. 135.
-
^ Shvedov, Maxim (2004). Transaction Tax: General Overview. CRS Report for Congress, Order Code RL32266, p. 7.
-
^ a b c d Stephen Spratt (September 2006). "A Sterling Solution". Stamp Out Poverty report. Stamp Out Poverty Campaign.
-
^ http://www.nsi-ins.ca/english/about/default.asp
-
^ a b Schmidt, Rodney (October 2007). "The Currency Transaction Tax: Rate and Revenue Estimates".
-
^ Paul Wilmott (November 2011). "Taxation To Slow Down High-Frequency Speculation While Not Affecting Hedging Activity".
-
^ a b c d e f g h Robin Round (representative of
-
^ a b Edmund Conway (5 Oct 2009). "Joseph Stiglitz calls for Tobin tax on all financial trading transactions". London:
-
^ a b c d
-
^ Stephany Griffith-Jones (December 7, 2009). "Now let's tax transactions". The Guardian (London). Retrieved 2010-01-13.
-
^
-
^ a b Rodney Schmidt, Principal Researcher,
-
^ a b c John Dillon (May 2010). "An Idea Whose Time Has Come: Adopt a Financial Transactions Tax". KAIROS Policy Briefing Paper No. 24 revised and updated.
-
^ Marcos Cintra (July 2009). "Bank transactions: pathway to the single tax ideal. A modern tax technology;the Brazilian experience with a bank transactions tax (1993-2007)". University Library of Munich, Germany in its series MPRA Paper with number 16710.
-
^ a b c Financial Transaction Taxes: The International Experience and the Lessons for Canada. http://dsp-psd.tpsgc.gc.ca/Collection-R/LoPBdP/BP/bp419-e.htm
-
^ a b Campbell, John Y. and Froot, Kenneth A. “International Experiences with Securities Transaction Taxes (December 1993),” NBER Working Paper No. W4587. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=338864
-
^ a b Umlauf, S (1993). "Transaction taxes and the behavior of the Swedish stock market". Journal of Financial Economics 33 (2): 227.
-
^ a b Archivsuche - Archiv - SPIEGEL ONLINE - Nachrichten
-
^ http://www.imf.org/external/np/exr/consult/2009/pdf/Comment91.pdf
-
^ a b http://www.ituc-csi.org/japanese-prime-minister-backs-call.html
-
^ http://www.tuac.org/fr/public/e-docs/00/00/06/7C/document_doc.phtml
-
^ "Today: Wednesday 6th January". BBC. 6 January 2010.
-
^ Today programme interview with Prof. Simon Johnson on YouTube
-
^ a b Charles Pope (December 3, 2009). "DeFazio calls for tax on financial transactions but critics abound".
-
^ a b Schwabish, Jonathan A. (2005). "Estimating Employment Spillover Effects In New York City with an Application to The Stock Transfer Tax". Public Finance Review 33 (6): 663–689.
-
^ Edwards, Franklin R. (1993). "Taxing transactions in futures markets: Objectives and effects". Journal of Financial Services Research 7 (1): 75–91.
-
^ a b c d Stephan Schulmeister, Margit Schratzenstaller, and Oliver Picek, 2008. A General Financial Transaction Tax. Motives, Revenues, Feasibility and Effects. Research Study by the Austrian Institute of Economic Research, co-financed by Federal Ministry of Finance and Federal Ministry of Economics and Labour, URL: http://www.wifo.ac.at/wwa/servlet/wwa.upload.DownloadServlet/bdoc/S_2008_FINANCIAL_TRANSACTION_TAX_31819$.PDF
-
^ Tobin, James, 1978. A Proposal for International Monetary Reform. Cowles Foundation Discussion Papers 506, Cowles Foundation, Yale University, p. 158-159 [ URL: http://ideas.repec.org/p/cwl/cwldpp/506.html ]
-
^ Eichengreen, Barry; Tobin, James; Wyplosz, Charles (1995). "Two Cases for Sand in the Wheels of International Finance". Economic Journal 105 (428): 162–72.
-
^ Engle, Robert F. (1982). "Autoregressive Conditional Heteroscedasticity with Estimates of Variance of United Kingdom Inflation". Econometrica 50 (4): 987–1008.
-
^ Evans-Pritchard, Ambrose (May 26, 2008). "Germany in call for ban on oil speculation".
-
^ a b David Cho, and Binyamin Appelbaum (January 22). "Obama's 'Volcker Rule' shifts power away from Geithner". The Washington Post. Retrieved 13 February 2010.
-
^ Shields, Michael and Simon Jessopand (December 13, 2009). "Volcker finds British bonus tax "interesting": report". Reuters. Retrieved 23 February 2010.
-
^ Tim Harford (February 20, 2010). "If that’s the Robin Hood tax, I’m the sheriff of Nottingham".
-
^ Aliber, R.; Chowdhry, B. & Yan, S. (2003). "Some Evidence that a Tobin Tax on Foreign Exchange Transactions Might Increase Volatility". European Finance Review 7 (3): 481–510.
-
^ Kearney, Colm; Patton, Andrew J. (2000). "Multivariate GARCH Modeling of Exchange Rate Volatility Transmission in the European Monetary System". Financial Review 35 (1): 29–48.
-
^ Worthington, Andrew & Higgs, Helen (2004). "Transmission of equity returns and volatility in Asian developed and emerging markets: a multivariate GARCH analysis". International Journal of Finance and Economics 9 (1): 71–80.
-
^ Valadkhani, Abbas; O'Brien, Martin (2009). "Modelling Australian Stock Market Volatility: A Multivariate GARCH Approach". School of Economics, University of Wollongong, Australia, working paper.
-
^ Hanke, Michael; Huber, JüRgen; Kirchler, Michael; Sutter, Matthias (2010). "The economic consequences of a Tobin tax—An experimental analysis". Journal of Economic Behavior & Organization 74 (1–2): 58.
-
^ a b c Schulmeister, p.6
-
^ See the Italian weekly magazine Vita http://www.vita.it/news/view/3853
-
^ http://www.eumed.net/cursecon/textos/tobin-antiglob.htm
-
^ Hodgson, Godfrey (13 March 2002). "James Tobin". The Guardian (London).
-
^ http://www.nber.org/~wbuiter/obit.pdf
-
^ http://www.ft.com/cms/s/0/76e13a4e-9725-11de-83c5-00144feabdc0.html?nclick_check=1
-
^ Ralitsa Kovacheva (September 30, 2011). "The EU Expects 57 Billion Euros a Year from a New Financial Tax". EU inside. Retrieved 26 February 2012.
-
^ Harry Wilson (February 16, 2012). "Financial transaction tax would raise €10bn". Telegraph. Retrieved 3 March 2012.
-
^ Dietlein, Georg (2012): National Approaches towards a Financial Transaction Tax and Their Compatibility with European Law, EC Tax Review, Vol. 21 Issue 4, S. 207–211
-
^ Sieling, Carsten (2012): Financial Transaction Tax. Sensible, Feasible, Overdue. Friedrich-Ebert-Foundation, S. 2 (Retrieved 2012-06-05)
-
^ Avinash Persaud (2012-01-10). "Warum Rösler falsch liegt".
-
^ Alexander Hagelüken (May 10, 2012). "Und sie funktioniert doch".
-
^ Sebag, Gaspard (2012-08-31). "Lowering contributions possible even under enhanced cooperation".
-
^ "11 eurozone states ready to launch financial transactions tax: EU tax commissioner". The Economic Times. 2012-10-09. Retrieved 2012-10-09.
-
^ "Eleven EU countries get Parliament's all clear for a financial transaction tax".
-
^ "Financial transaction tax: Council agrees to enhanced cooperation".
-
^ Phillip Inman (2013-01-22). "EU approves financial transaction tax for 11 eurozone countries". Retrieved 2013-01-25.
-
^ "Robin Hood Gets Go Ahead in Europe" RobinHoodTax.org, 23 January 2013
-
^ "Barnier: Europe's 'Robin Hood' tax 'politically and morally right'" CNN, January 25, 2013
-
^ Brunsden, Jim (2013-02-01). "EU to Present Financial-Transaction Tax Proposal on Feb. 14".
-
^ "Financial transaction tax: clearing the next hurdle".
-
^ Stamp duty applies to transfers of certificated stock. SDRT is a broadly equivalent tax on the transfers of uncertificated stock.
-
^ "Stamp Taxes Manual". HM Revenue and Customs. Retrieved 2011-11-06. paras 1.34 to 1.40
-
^ a b c OXERA (May 2007). "The effectiveness of Keynes-Tobin transaction taxes when heterogeneous agents can trade in different markets: A behavioral finance approach". Oxera Consulting Ltd. Retrieved 2010-03-04.
-
^ Jackson, P. and A. O’Donnell, 1985. The effects of stamp duty on equity transactions and prices in the UK Stock Exchange. Bank of England Discussion Paper No. 25.
-
^ Saporta, Victoria; Kan, Kamhon (1998). "The Effects of Stamp Duty on the Level and Volatility of Equity Prices". SSRN Electronic Journal.
-
^ a b Bond, Steve; Hawkins, Mike; Klemm, Alexander (2005). "Stamp Duty on Shares and Its Effect on Share Prices". Public Finance Analysis 61 (3): 275–298.
-
^ "HMRC Stamp Taxes Manual". pp. 8, 11.
-
^
-
^ Schmidt, R. 2007 Currency Transaction Tax: Rate & Revenue Estimates, The North-South Institute
-
^ All Party Parliamentary Group for Debt, Aid & Trade
-
^ Eddy Fougier (Spring 2003). "The French Antiglobalization Movement: a New French Exception?". Institut Francais des Relationes Internationales.
-
^ Kwan S. Kim and Seok-Hyeon Kim (December 2003). "The Tobin tax revisited in the context of global governance on capital markets". The Role of International Institutions in Globalization: The Challenges of Reform (edited by John-ren Chen). Edward Elgar Publishing. p. 30.
-
^ Daniel Ben-Ami (March 25, 2002). "Tobin or not Tobin?". spiked.
-
^
-
^ European Central Bank (2004). Opinion of the European Central Bank (CON/2004/34)
-
^ a b Andrew Moran (November 23, 2009). "Europe's first President calls for Euro tax, Euro identity". Digital Journal. Retrieved 2010-01-29.
-
^ Daniel McConnell (November 22, 2009). "EU president wants to see a new Euro tax". Independent.ie.
-
^ Macer Hall and Alison Little (November 19, 2009). "Belgian PM Herman Van Rompuy called clown by sister Christine". Daily Express. Retrieved 2010-01-29.
-
^ Ian Traynor (June 29, 2011). "EU calls for 'Tobin' tax in a move to raise direct revenue". The Guardian. Retrieved 2011-06-29.
-
^ The G20 is made up of the G7 plus others. The G20 was established in September, 1999, and Canada was part of the original G7. There was no Canadian election between the March 23, 1999 Canadian adoption of the Tobin tax resolution, and the September 1999 formation of the G20, so the government remained the same.
-
^ "'"Sarkozy to press for 'Tobin Tax. BBC News. 19 September 2009.
-
^ Tobin tax remains Treasury ambition (December 11, 2009). "Tobin tax remains Treasury ambition".
-
^ a b Madhavi Acharya-Tom Yew (June 27, 2010). "Banks relieved as G20 backs off on bank tax".
-
^ David Charter (May 20, 2010). "Merkel leads calls for global financial tax as markets continue to slide". London: Times Online. Retrieved 24 June 2010.
-
^
-
^ SIN PERMISO - artículos en la WEB
-
^ Background page, United Nations Millennium Development Goals website, retrieved 16 June 2009.
-
^ a b
-
^ Cliff Kincaid (October 6, 2009). "Progressives Back Obama Push for Global Tax". Accuracy in Media. Retrieved 2010-01-29.
-
^
Further reading
-
Kaiser, Johannes; Chmura, Thorsten; Pitz, Thomas (July 2007). "The Tobin Tax - A Game-Theoretical and an Experimental Approach". Social Science Electronic Publishing.
-
Patomäki, Heikki (August 2001). "Democratising Globalisation: The Leverage of the Tobin Tax". Zed Books.
-
Haq, Mahbub ul; Kaul, Inge; Grunberg, Isabelle (August 1996). "The Tobin Tax: Coping with Financial Volatility". Oxford University Press.
External links
-
Bank of Portugal report on the defense of the Portuguese Escudo in the European exchange rate mechanism
-
BBC 7 November 2009 Lukewarm reaction to UK tax plan
-
Tobin Tax Initiative"Bibliography - Best Sources on Financing Alternatives, and Tobin Taxes" (includes economists on both sides of the issue of economic feasibility) from website of
-
Currency Transaction Taxes - Library of links to legislation, proposals, reports, articles and archives - from Global Policy Forum
-
Debating the Tobin Tax, New Rules for Global Finance, 2003
-
Disarming the markets, editorial by Ignacio Ramonet, Le Monde Diplomatique 1997
-
English version of James Tobin interview on Der Spiegel on Jubilee 2000 web site
-
Federal reserve bank of San Francisco article on the failed attack on the Hong Kong dollar
-
IMF report (2004) on emerging market currency crises
-
The Guardian editorializes against the Tobin tax
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and USA.gov, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for USA.gov and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.