Geography Reference
In-Depth Information
A number of commentators have argued that the real constraint on
the introduction of Tobin-style taxes as a platform for world develop-
ment and stability remains the lack of an overall political will in the
places that matter - Washington, London, Tokyo, Frankfurt (Potter et al.,
2008). In all too many cases, the call for such redistributive mecha-
nisms has been met by the response that taxation is the concern of the
sovereign state and, therefore, cannot be regarded as a global issue.
key
points
•
The idea of establishing a global tax on currency transactions was
strongly advocated by the American economist James Tobin in 1972.
•
The basic idea is to levy a tax of between 0.1 and 0.25 per cent on all
transactions between currencies.
•
Although a small percentage, it is estimated that globally such a tax
would generate around US$250 billion per annum for development
purposes, in particular the alleviation of poverty.
•
A major consideration is that a Tobin tax would also serve to pro-
mote greater financial stability by damping down financial markets,
rather than the extreme volatility that so often seems to character-
ize them.
•
While the Tobin tax has been advocated by NGOs such as War on
Want, in the political domain considerable resistance clearly
remains to the introduction of global forms of taxation.
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further
reading
One of the most accessible summaries of the Tobin tax and the wider
work of James Tobin is provided in David Simon's biographical essay on
James Tobin, which appeared in the same author's edited collection
under the title,
Fifty Key Thinkers on Development
(2006). An overview of
the tax is to be found in Chapter 4 of Rob Potter et al.'s text
Geographies
of Development
(2008). The War on Want 'It's time for Tobin' campaign
aimed at introducing the Tobin tax is to be found on the website (www.
waronwant.org/past-campaigns/tobin-tax), from which you can down-
load the 23-page booklet under the title,
The Currency Transaction Tax:
Rate and Revenue Estimates
, published by the United Nations University,
War on Want and the North-South Institute (2008).
