John Langmore writes in an Australian site ‘Inside Story’ and gives a very good account of the genesis of the financial transaction tax being actively considered as a part solution to the global financial crisis. Here is the concluding excerpt..
American Nobel economics laureate Paul Krugman argues that a financial transaction tax “would be a trivial expense for people engaged in foreign trade or long term investment; but it would be a major disincentive for people trying to make a fast buck (or euro, or yen) by outguessing the markets over the course of a few days or weeks.” “What’s not to like?” he asks. Critics claim that it would be avoided, but the centralisation of such transactions makes them relatively easy to monitor – if there is a will to do so. The tax is one way of shrinking bloated financial sectors and of raising revenue from those who have benefited most from the explosive growth in the volume of international financial transactions. • (Link to article)