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By the way I already told what the opposition in Germany wants Eurobonds - transaction tax - Marschall plan financed by said transaction tax.

In the first place, if you can fund a Marshall plan type of project with a transaction tax, then your transaction tax isn't high enough. Because the whole point of a financial transaction tax is to kill the noise traders stone cold dead. Which, if it works as desired, also kills the base for that tax stone cold dead.

In the second place, even if they design a financial transaction tax to extract the maximum possible receipts, rather than impose the maximum possible harassment on noise traders consistent with not harassing productive businesses, revenues will not suffice to fund a Eurobancor. Even in the most optimistic possible estimate (where the Eurozone financial sector is assumed to contribute roughly half of the £ 250 bn that the Robin Hood Tax people guesstimate could be raised globally), it will fall short of plugging even the German CA imbalance (currently around $ 180 bn), to say nothing of the aggregate imbalances.

So while a Tobin tax is an excellent idea that will solve a great many problems, the biggest problem is not one of them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Sep 9th, 2011 at 10:13:44 AM EST
[ Parent ]
In the first place, if you can fund a Marshall plan type of project with a transaction tax, then your transaction tax isn't high enough. Because the whole point of a financial transaction tax is to kill the noise traders stone cold dead. Which, if it works as desired, also kills the base for that tax stone cold dead.

ATTAC and others make the mistake of seeing the Tobin Tax as a revenue generating mechanism which was never Tobin's intention when proposing it...

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Sat Sep 10th, 2011 at 04:51:16 AM EST
[ Parent ]

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