[OPE-L] Tobin Tax

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Fri Mar 23 2007 - 20:23:35 EDT

On the Tobin Tax:

Larry Elliott: "The problem with the Tobin tax is that... it won't really
have any impact. You need much more direct controls on capital. It is very
unfashionable to say, because people who have an interest in having no
controls run most of the world financial system... Chile has a system of
taxing speculative flows. It welcomes direct investments to build factories.
But if you want to come in with some hot money, park it there for a week and
take it out again, then you pay a 30 percent tax. It is quite successful."

Bernie Fraser (former governor, Reserve Bank of Australia): "The Tobin
Initiative is not practicable in my view as it requires more than 160
countries to agree to impose it, and this is very unlikely to happen. Some
of the biggest banking systems in the world are in places like the Cayman
Islands. I am skeptical that there can ever be an international agreement on
taxation, which is the reason why I think we have to focus harder on
taxation at the national level."

(both quoted in Jocelyn Pixley, Emotions in Finance: Distrust and
Uncertainty in Global Markets, CUP 2004, p. 192).

The best modern example of an attempt to harmonise tax systems
internationally is the EU, but so far not all that much harmonisation has
occurred. If that is the case, a Tobin tax is unlikely to be a winner. The
taxation issue is one of the most sensitive issues of bourgeois society, and
let's not forget that the original bourgeois conquest of state power in
Europe was spurred by tax revolts.

Overall taxation and social security contributions as a percentage of GDP,
for example, varies between under 34% in Greece to nearly 55% in Sweden (the
EU average is 42.6%). Direct taxes - mostly personal income tax and company
taxation - vary between 9% of GDP in Greece to over 32% in Denmark (EU
average 13.7%). Indirect taxes - that is, mainly VAT and excise duties -
vary between about 11% of GDP in Spain to over 19% in Denmark (EU average
13.8%). And social security contributions vary from only 1.7% of GDP in
Denmark to over 19% in France (EU average 15.1%).


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