Friday, 15 February 2013

Tobin's taxes

By Stephen Spratt

In 1972 the Nobel prize winning economist James Tobin proposed a small tax on all spot currency transactions. Following the break-down of the system of fixed exchange rates drawn up at Bretton-Woods, Tobin was concerned that speculative trading would increase the volatility of exchange rates, damaging the real economy. The aim of what would become known as the Tobin Tax was to discourage short-term speculation and thus ‘throw sand in the wheels of our excessively efficient international money markets’.

In its more recent incarnation, the revenue raising potential of the Tobin Tax has been the main argument used. Those concerned with international development have been prominent in this, seeing taxes on financial transactions – particularly currencies – as a way to raise large sums for development. Environmental groups have made the same case, arguing that funding for climate change could be raised in the same way. These advocates have largely stayed away from the possible impacts on market volatility, however, preferring to focus on the (very large) sums that could be raised.

Forty years after Tobin’s original proposal, the European Commission yesterday announced its own plans for a ‘Tobin Tax’ in 11 European countries. According to the best estimates, this could raise €30bn-€35bn through a 0.1% levy on equity and bond transactions and 0.01% on derivatives. So how does this relate to the earlier versions?

First, there is no talk of throwing sand into any wheels. The tax is presented as a way of raising revenue, or of ensuring that the financial sector ‘pays its share’. Tobin’s original goal of reducing volatility by discouraging speculation is nowhere to be seen.

Second, the EC version would apply to equities, bonds and derivatives, but not currencies, reflecting the fact that not all Eurozone countries were prepared to sign up. The foreign exchange market – which as the largest financial market in the world turns over more than the UK’s total annual economic output every day – remains untouched.

Third, as well as not talking about reducing volatility, nobody has heard about tax proceeds being used to fund development or environment goals. The appeal to European governments of a new source of tax revenue in these times of austerity is strong. Campaigners may finally get what they want – a version of the Tobin Tax – only for the money to disappear into the coffers of European governments.

But will it work? On this front, the proposal looks quite robust. A change from earlier drafts sees the tax apply to instruments as well as actors. That is, not only do institutions based in signatory countries have to pay the tax, but so does anybody else trading financial assets issued in those countries. US banks trading German shares in London would be liable for the tax, for example. This is very important, as without it trading in these instruments would simply migrate outside the jurisdiction to avoid the tax, as happened in Sweden when a transaction tax was introduced there. The only tricky areas will be certain parts of the derivatives market, but these should be surmountable.

Expect the usual howls of protest from the financial lobby, as well as protracted legal challenges. One issue of dispute is likely to be the extraterritorial nature of the tax, where non-European institutions would still be liable if they trade assets issued in signatory countries. If you hear voices from the City of London making this point, however, you could point out that this element is modelled on the extraterritorial nature of the UK’s Stamp Duty on shares transactions. At 0.5% this is many times larger than the ‘Tobin Tax’ proposed in the Eurozone, and it too is liable regardless of where UK shares are traded or by whom. To those who fret about transaction taxes destroying the financial sector, you might point out that the Stamp Duties were introduced in 1694 in the UK, and have not exactly impeded the growth of the financial sector...


شركة التميز said...

Website wonderful I wish I could be like my website this site , My talking about things that are also important , such as your website,
The first part is talking about my website is the sale of
chef knives
and the most important brands offered for sale such as
global knife set review

global knives reviews

zwilling ja henckels knives reviews

henckels knives reviews

victorinox chef knives reviews

victorinox kitchen knives reviews

chef knives reviews

The second is talking about the website, the problems of water leaks and how its solutions and areas that are out of our branches is
افضل شركة
كشف تسربات المياه

شركة كشف تسربات المياه بالرياض

كشف تسربات المياه بجدة

كشف تسربات المياه بالدمام

كشف تسربات المياه بدون تكسير

كشف تسربات المياه بالمدينة المنورة

افضل شركة كشف تسربات المياه بالرياض

NITROCOM said...

The Nitrocom vendor portfolio is a strong and carefully selected collection of the world’s leading wireless, cloud & security innovators. Each vendor is individually outstanding whilst also able to work together to create a simple, yet sophisticated solution.
SIAE MICROELETTRONICA was founded in 1952. Now we are internationally renowned as a leading provider of the most innovative and best performing microwave radio and wireless network solutions. Our equipment enables millions of people in over 90 countries to communicate around the world every day. As an intrinsic element of modern network infrastructure, our customers demand the highest quality, value for money and innovative telecommunications products.
Cambium Networks offers a comprehensive portfolio of fixed reliable, scalable & high-speed wireless backhaul and access solutions.
Ceragon Networks is a worldwide provider of high-capacity LTE-ready wireless backhaul solutions. The company has a broad portfolio of innovative, field-proven technology solutions for wireless service providers as well as private businesses. The Ceragon solutions are designed to deliver voice and premium data services, eliminate the backhaul capacity network as well as significantly reducing the costs and transition to next-generation IP-based networks.

NITROCOM said...

DragonWave is a leading provider of high-capacity packet microwave solutions that drive next-generation IP networks. DragonWave's carrier-grade point-to-point packet microwave systems transmit broadband voice, video and data, enabling service providers, government agencies, enterprises and other organizations to meet their increasing bandwidth requirements rapidly and affordably. The principal application of DragonWave's portfolio is wireless network backhaul, including a range of products ideally suited to support the emergence of underlying small cell networks. Additional solutions include leased line replacement, last mile fiber extension and enterprise networks. DragonWave's award winning products are known in the industry for their leading capacity, reliability, and spectral efficiency.
3Roam provides high-capacity microwave transmission equipments for wireless and packet networks convergence. 3Roam solutions aim at bridging the gap between traditional microwave transmission technologies and advanced networking techniques.
Micran is a modern innovative enterprise with a strong team of specialists, combining experience in the different spheres of microwave electronics, communications, radio location, test and measurement equipment and information security. This unique, talented, multi-disciplinary team is viewed very positively by our current customers and partners. They are always ready to bring their wide expertise to accept new challenges.
Nitrowave WNMS is a Enterprise and Carrier-Grade Wireless Network Management System. A single software solution simplifies a large number of management and monitoring tasks for network administrators. Nitrowave ’s comprehensive network management system supports several thousands of nodes. Multiple networks may be maintained and monitored using one server. A rich feature set helps to diagnose network problems effectively, visualize networks on a map, perform scheduled firmware upgrades automatically, track states of devices, get failure alerts, and collect statistics. The Web-based system environment supports multi-user accounts. Several administrators may manage different networks on the same server, without having access to each other’s equipment.

NITROCOM said...

RACOM is a primary producer, i.e. we do our own research & development of both Hardware and Software for all our product lines: Radio modem, GPRS/EDGE/UMTS router and Microwave link. Whenever the need arises, one can always find the responsible person for the respective part of a product at RACOM.

Pre-sales Support

With our help you can trust that you are getting the right product to fulfil your customers requirement. We can help guide and support you with all pre-sales questions and design needs.
Planning and Design
Correctly planning and designing you wireless network is imperative to ensure you get the speed, services and value for money. Using our premium services we can assist you with planning and designing your wireless network.
Installation and Aftercare

NITROCOM said...

Installation and Aftercare
Take the stress out of technical projects, have us set up your solution and deliver it to your customers door, ready to plug in. We offer pre-staging, consultancy, product support & troubleshooting and RMAs.
Marketing Plus
As a value-added distributor, Purdicom offers a range of marketing support to its partners including templates, event assistance and telesales resource. These templates include HTML emails, PDFs, infographics and technology guides across each of the vendors that Purdicom distributes.

Visit some important pages from the perspective of customers :

telecom wireless solutionsharmony radio litehuawei microwavesm saleSpectronite ray point to point microwave link

Nooran Telecommunications said...

در این مقاله با دسترسی به سوییچ التکس و کانفیگ محصولات التکس آشنا بشوید. در ادامه این مقاله شما با مدیریت سوییچ التکس و پیکربندی سوییچ التکس بیشتر آشنا می شوید.
دسترسی به تنظیمات سوئیچ التکس | کانفیگ eltex | پیکربندی eltex

سازمان تنظیم مقررات و ارتباطات رادیویی را از سایت نوران دنبال کنید. شما میتوانید سازمان تنظیم مقررات رادیویی را همیشه با آپدیت جدید دستگاه های تایید نمونه دنبال کنید.
فرکانس رادیو | رگولاتوری | ارتباطات رادیویی | تایید نمونه سازمان تنظیم مقررات | CRA | TA | سازمان تنظیم | باند آزاد | فرکانس 24 | رادیو باند آزاد

تایید نمونه رادیو راکام | تایید نمونه لینک 24 گیگاهرتز | اخبار تجهیزات راکام | تایید نمونه لینک 24ghz

آشنایی با شرکت راکام را با تعریف لینک 24 گیگاهرتز شروع می کنیم.
علاقه مندان جهت شناخت رادیو لینک 24ghz با مراجعه به صفحه what is racom با این کمپانی آشنا بشوید.
رادیو راکام | racom | لینک 24 گیگ | لینک 24 | racom چیست

نصب said...

خدمات شبکه
نصب شبکه
پشتیبانی شبکه
مجازی سازی سرور
راه اندازی سانترال
امنیت شبکه

sarah saad said...

شركة نقل اثاث بنجران
شركة نقل اثاث بخميس مشيط
شركة نقل اثاث بابها