[OPE-L:6810] Re: Re: Tobin Tax

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Sat Mar 23 2002 - 13:31:41 EST

>At 04:24 PM 3/22/2002 -0500, jerry wrote:
>>  >From the speech by  Fidel Castro in [6804]:
>>>  The rich world should condone their foreign debt and grant them fresh soft
>>credits to finance their development. The traditional offers of
>>assistance, always scant and often ridiculous, are either inadequate or
>>For a true and sustainable economic and social development to take place
>>much more is required than is usually admitted. Measures as those suggested
>>by the late James Tobin to curtail the irrepressible flow of currency
>>speculation --albeit it was not his idea to foster development--  would
>>perhaps be the only ones capable of generating enough funds, which in the
>>hands of the UN agencies and not of awful institutions like the IMF, could
>>supply direct development assistance with a democratic participation of all
>>countries and without the need to sacrifice the independence and
>>sovereignty of the peoples. <
>>Castro gives pretty sweeping support above for the Tobin Tax. Should

the Tobin Tax seems impractical.  Which governments would impose the 
tax on a two sided transaction? How could tax regulations be drawn up 
so that they could not be evaded easily through derivatives 
transactions? As Diane Coyle notes, one could simply substitute a 
swap for the straight exchange of currencies which was going to be 
taxed. Moreover, it is doubtful that a low Tobin tax would 
fundamentally alter the balance between the supposedly good 
transactions financing trade and direct investment, which form a very 
small proportion of the total, and the supposedly bad short term 
investment and speculation.

Yours, Rakesh

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