Monday, March 22, 2004

Tobin Tax - from http://www.ceedweb.org/iirp/factsheet.htm

A Tobin Tax is a simple sales taxes on currency trades across borders.

- Currency speculators trade over $1.8 trillion dollars each day across borders. The market is huge, and volatile.
- Each trade would be taxed at 0.1 to 0.25 percent of volume (about 10 to 25 cents per hundred dollars)
- This would discourage short-term currency trades,about 90 percent speculative, but leave long-term productive investments intact.
- The currency market would thus shrink in volume, helping to restore national economic autonomy. Nations again could intervene effectively to protect their own currency from devaluation and financial crisis.
- Billions in revenue, estimated at $100 - $300 billion per year, would be generated.
- Revenue could go into earmarked trust funds to fund urgent international priorities.