The "Tobin tax" is a proposed tax on speculative currency transactions. It was named after the late Nobel Prize-winning economist James Tobin, who suggested the idea in 1971 to reduce volatility and speculation in the foreign-exchange markets. Advocates of the tax see it as a way to discourage excessive risk-taking and share the wealth of big banks.
The Harkin-DeFazio tax would levy a 25-basis-point (0.25%) fee on stock transactions over $100,000 and a two- or three-basis-point charge on derivatives transactions, including futures, options and swaps, including credit-default swaps. Bloomberg News reported the proposed trading tax was supported by more than 200 economists, the AFL-CIO, and business leaders including Warren Buffett and Vanguard founder John Bogle.
France introduced a financial transaction tax on August 1, 2012. French domiciled chief financial officers now pay 0.2% on any share transaction.
There are 11 European Commission member states – including Germany, Greece, France and Spain, which have adopted a financial transaction tax. The tax is 0.1% on bonds and shares and 0.01% on derivatives.
- Trading Tax -- a Bad Idea Whose Time Has Come. Barron's.
- Leading American economists back campaign for "Tobin Tax". The Guardian.
- It's time for a 'Tobin tax' on financial transactions. The Economic Times.
- French Financial Transaction Tax Overview. London Stock Exchange.
- The Robin Hood tax takes a step closer. The Telegraph.