Time for the Tobin tax?
Today the new Task Force on International Financial Transactions and Development will meet in Paris where it will be chaired by French foreign minister Bernard Kouchner. It will consider an idea often known as the Tobin tax. Now there is growing support for such a tax – but what is it?
Put simply, it is a levy on foreign exchange transactions. The proposal is named after the economist James Tobin and the tax is intended to put a penalty on short-term speculation in currencies. The original tax rate he proposed was 1%, which was subsequently lowered to between 0.1% and 0.25%.
You can find a fuller explanation here.