Comments on: Robin Hood Tax? Beware the men in tights

By: Marc

Marc — Fri, 19 Feb 2010 15:41:41 +0000

The original purpose of the Tobin Tax was to stop speculative financial transactions, like when George Soros sold sterling short leading to Black Wednesday. Normally such speculators are working on very small margins so they have to buy and sell vast quantities of currency. The movements in the market caused by such speculation can lead to panic selling and the speculation that a currency is going to collapse becomes self fulfilling. With a Tobin tax that initial speculative selling becomes uneconomical meaning the currency has far more chance of remaining stable.
As a method of preventing markets from overheating through speculation the Tobin tax seems a good solution.

By: James Graham

James Graham — Fri, 19 Feb 2010 11:27:32 +0000

Joe,

It isn’t clear from your comment if you’re in favour of a Tobin Tax or the Robin Hood Tax, something which its own website states would have the exact opposite aim of the former (ie raise a lot of money and not change behaviour as opposed to raise a small amount of money and change behaviour).

By: Joe

Joe — Fri, 19 Feb 2010 01:25:15 +0000

I’m all for a tobin tax but I think the claims of the amounts that would be generated by this tax are greatly exagerated, it appears that they have said X traded and if we took 0.05% of X we would make Y however they dont take into account the fact that the tax would change X, its kinda like a buisness expecting to double their prices and double their profits

That said I’m still all for it, it would still make a reasonable amount of tax and the only area that it would really hurt is automated high frequency trading which arguably serves no socialy usefull purpose a all, probably the greatest waste in the banking sector is that many of the greatest minds are trying to work out algorithm’s to work out what a stock will be worth in a few seconds rather than what is a good genuine investment, a tobin tax would definately change that

By: The Robin Hood Tax « Freethinking Economist

The Robin Hood Tax « Freethinking Economist — Sun, 14 Feb 2010 21:15:00 +0000

[...] with the advert. It seems to imply: “this is infinitessimally small, this tax. 0.05%! Compare that to [...]

By: Top of the Blogs: The Golden Dozen #156

Top of the Blogs: The Golden Dozen #156 — Sun, 14 Feb 2010 19:29:09 +0000

[...] Robin Hood Tax? Beware the men in tights by James Graham on the Social Liberal Forum blog. “The Social Liberal Forum blog is back, [...]

By: Three good links « Freethinking Economist

Three good links « Freethinking Economist — Fri, 12 Feb 2010 10:34:47 +0000

[...] variation on the Tory Tombstone poster, and the best punning title and startoff on Robin Hood tax (here). But for the best dingdong battle on this last topic read LibCon starting here between Luis Tim [...]

By: tim leunig

tim leunig — Fri, 12 Feb 2010 09:34:08 +0000

very pleased to see you back in business here. very good post. What is critical is that 0.05% is a much bigger % of profit, and therefore has to be passed on, by definition.

If this is global (and that means Cayman Islands as well) much of the tax received in Britain will be passed onto foreign consumers, because we export finance. So we can get the French and the Germans and the Kuwaitis (and those in less developed countries) to pay our taxes for us. That has a narrow appeal to me as a Brit!

By: Foregone Conclusion

Foregone Conclusion — Fri, 12 Feb 2010 00:22:36 +0000

“Why does that make me nervous? Well because when it comes to taxes, I’m highly dubious about taxes on economic activity. Economic activity is a good thing: it gives people jobs (and meaning). Markets aren’t perfect and can create all sorts of anti-social problems but it isn’t the economic activity itself which is the problem but, generally, monopolisation and speculation.”

This expresses my thoughts exactly. Tobin taxes and banker-bashing may have a part in a wider economic solution, but unfortunately they seem to be sidelining what, for me, should be our main focus – getting the market to work, and to work long-term in the interests of everyone. Instead, we seem to have been taken off down the road of attacking banking and bankers per se. I’m no libertarian (when I say that I want to make the market work, that probably means a major restructuring). But impeding trade does nothing except impede trade – it doesn’t address root causes. I suppose that’s what’s what makes me a liberal at the end of the day.

By: Jane Watkinson

Jane Watkinson — Thu, 11 Feb 2010 21:36:45 +0000

I guess we will have to agree to disagree here . I personally see it as a good opportunity to turn a bad into a good, but i know you are against that. Obviously, there needs to be more work into it and proper safeguards etc etc, but at the moment it looks rather promising.

By: James Graham

James Graham — Thu, 11 Feb 2010 21:33:25 +0000

Jane Watkinson:

I prefer the Robin Hood Tax’s to the Tobin Tax’s end values.

I don’t. The Tobin Tax is designed to reduce a bad thing; the Robin Hood Tax is designed to profit from it. Niklas Smith’s comments above are worth bearing in mind: one of the effects of the Tobin Tax would be to push investors into other areas of investment. The Robin Hood Tax would mean that they couldn’t make that distinction and might take even more risks in the pursuit of profits.