In the 1970s, economist James Tobin suggested levying a tax on currency trading as a way to stabilize exchange rates and reduce volatility in these markets. imposed a 'transfer' tax for issuing and trading both equities and debt. In 1936, John Maynard Keynes proposed the idea in his seminal 'The General Theory of Employment, Interest and Money,' arguing that it could reduce dangerous speculation in equities.

Broad support for 'Tobin tax'ĭebate over the merits and impact of a tax on securities trading goes way back. Are we going to tax labor more? Are we going to tax consumption more? I think it is fair to tax financial activities that in some of our member states do not pay the proportionate contribution to the society. If our farmers, if our workers, if all the sectors of the economy from industry to agriculture to services, if they all pay a contribution to the society also the banking sector should make a contribution to the society.Īnd if we need â€'- because we need â€'- fiscal consolidation, if we need more revenues the question is where these revenues are coming from. European Commission President JosÃ© Manuel Barroso added a third rationale in pushing for the tax in a speech on Wednesday:

Second, the tax might help limit the kind of excessive financial speculation that weakened big banks during the meltdown, solidifying Europe's financial markets. That would help offset the costly bank bailouts in the region following the 2008 financial crisis and help countries reduce their budget deficits. First, it would generate enormous public revenue - roughly $78 billion a year, according to the EU. The EU wants to introduce a FTT tax for two reasons.

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