Tag Archives: Tobin tax

Top UK regulator supports transactions tax to shrink financial sector

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A year ago, it occurred to me that if the popular blood lust against the financial sector was to be given vent, one could do worse than adopt a small (but global) tax on financial transactions.    On August 27 it was reported that Adair Turner, head of the UK Financial Services Authority, had come out in support of just such an idea, arguing that the financial sector is too large.   The Financial Times editorializes against the proposal, pointing out the importance of the sector to Britain, and arguing that “bonus-bashing is a distraction.”  Willem Buiter is with Turner in believing that the financial sector is too large, but views the transactions tax as the wrong policy tool for the job. read more

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How to Make TARP Politically Acceptable: Add a Tax on Securities Transactions

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I propose that the Congressional leadership re-introduce the Trouble Asset Relief Program accompanied by a major new policy: a small tax on securities market transactions. This will accomplish the political goal of aiming a silver bullet into the heart of the (understandable) popular outrage that blocked passage of the TARP bill on Monday. It will simultaneously accomplish the fiscal goal of raising revenue in the future. This is revenue that the federal government would have sorely needed even before the bailout arose and will need even more if the taxpayer is to be protected against the risk of heavily subsidizing the financial sector. read more

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