A tax whose time has come
It goes by various names. For a long time, it was called the Tobin Tax, after the Nobel prize-winning economist James Tobin who first proposed it some 40 years ago. British campaigners have called it the Robin Hood Tax because it would take from the rich and give to the poorer. It is now called the Financial Transaction Tax (FTT) and has been proposed by the President of the European Commission as a way of tackling budget deficits.
I blogged about it two years in this posting. Since then, a lot of work has been done on the practicalities and a lot of political support had gathered behind the idea. Put simply, the financial markets played a major part in getting us into this economic crisis, so they should play at least a small part in getting us out of it.
As originally envisaged by Tobin, the tax would have been global and set at 1% of each international financial transaction. As proposed this week for the European Union alone (the Americans are against such a tax), there would be a minimum tax rate on trading of bonds and shares set at 0.1% and at 0.01% for derivative products, levied on trades where at least one of the institutions is based in the EU.
There’s a good discussion of the new tax here.
October 1st, 2011 at 9:50 pm
Roger,
Not ALL Americans are against progressive taxation. In fact, President Obama (whom you admire more than many Americans do) has proposed an increase of income taxes on the rich, which would force an increase in taxation of capita gains. The Republicans are accusing him of “Class Warfare”.
The tax change that he’s proposed is being called “the Buffet Rule”, and you’re probably aware of it. In case you aren’t, your trusty Wikipedia has this on it: http://en.wikipedia.org/wiki/Buffet_Rule
October 1st, 2011 at 11:21 pm
I am aware of the Buffet Rule, David, but I’m also aware that Congress will not approve it.