Transparency 42: Studying the modified Tobin Tax
In 1971 James Tobin proposed a tax on certain financial transactions with the objective of avoid short-term speculative market currency exchanges investments.
Without the approval of its inventor, on several occasions economic authorities in different countries have tried to apply a variant of that rate adapted to any type of transaction.
James Tobin has indicated that this tax variant constitutes an abuse.
However in the current situation some states are in need of increasing their income and resort to any ideas to justify the introduction of new taxes. For this reason they are considering implementing this modified Tobin.
Many of these states also require simultaneously the issuance of public debt to finance their damaged economies but do not want to levy the new tax on transactions involving the issuance of public debt for fear of a loss of liquidity from the public purse and for fear of falling purchasing money from private banks to the central banks.
They have therefore concluded to impose a tax on all financial transactions, from 2015, but excluding those related to the operation of the public debt.
In Transparency we ask ourselves
(1) What is behind this rate which will tax transactions for the purchase of grain, energy products and processed food?
(2) (2) Can it be considered an example of that states do not act as the first citizen in compliance with its own laws?
(3) (3) Can it be considered another form of financing structures oversized civil service?