socialmedian: Transaction tax figures start to add up for Gordon Brown

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Transaction tax figures start to add up for Gordon Brown

Source: The Guardian

Nov 08, 2009

Summary

Levying a "transaction tax" on the frenzied activities of City traders and their rivals in the world's financial markets is not a new idea, but it may be one whose time has come.

American economist James Tobin originally proposed the tax – levied at up to 1%, on foreign exchange transactions – in the 1970s, to tame damaging financial speculation, and throw "sand in the wheels" of turbo-charged capitalism.

During the boom years of the past decade, the idea of a "Tobin tax," as it became known, was kept alive by campaigners angry at what they saw as the financial markets' wasteful use of resources, and the damage wrought on vulnerable countries by savage swings in exchange rates.

But only now, when the world's biggest economies have been lashed by the fallout from the irrational exuberance of the markets, has the idea captured the imagination of their leaders, including Gordon Brown, right. Today, it is envisaged as a much more modest tax – levied at perhaps just 0.05%. But it would cover all financial dealings, in stocks and shares, complex derivatives, and so on

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