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| Authored by: Anonymous on Wednesday, April 18 2012 @ 08:56 PM EDT |
Simplistically:
The exchange charges a transaction fee, for execution or clearing or both.
The exchange pays corporation tax on it's profits.
Thus the state in which the exchange resides, already (indirectly) receives
such a tax.
I do appreciate that may be insufficiently punitive for most people in the
current climate.
To be more specific, what you suggest is often referred to as a Tobin tax, it
has been proposed and discussed many times in many guises since. The
name still sticks, and in 40 years no-one has figured out a way to make it
work.
Sweden tried it. Their financial industry almost vanished beyond retail
banking, resulting in a commensurate drop in government revenues.
They repealed it and were amongst the first and most vocal to decry it when
the EU suggested it again in a knee jerk reaction to the collapse of most
southern European economies.
It will only work if you can impose it everywhere at once at consistent levels,
Which is a) impossible due to currency arbitrage and b) There is not (yet) a
one world government, so regulatory arbitrage would render it irrelevant.
I believe there are solutions, but you need to get the banker bashers to stop
blowing hot air and get them to start looking at the solutions instead.
Though you stand as much chance of stopping politicians blowing hot air as
you do getting traders to stop trading.
[ Reply to This | Parent | # ]
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