Tobin Tax
Recently, U.S. President Donald Trump’s administration considered imposing a Tobin Tax on capital flows, a move that could disrupt global financial markets.
More on Tobin Tax
- About: The Tobin tax is a tax on international financial transactions, specifically short-term foreign exchange transactions.
- Purpose: To reduce speculative trading and ensure more stable exchange rates.
- Tax Range: A small tax on currency transactions (0.1%-0.5%) to discourage short-term speculation.
- Origin: Proposed by Nobel laureate James Tobin in 1972, in response to fluctuations in currency markets.
Advantages & Disadvantages of Tobin Tax |
||
Aspect |
Advantage |
Disadvantage |
Market Stability |
Reduces speculative trading and volatility |
May lower market liquidity |
Revenue Generation |
Can generate .... |
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