I have been thinking about this idea of a so called Tobin Tax. It is self evidently right that the wider community should be able to extract social value from a tax on what are essentially just financial transactions – which in themselves do not produce new wealth.
The difficulty I have with the idea is the degree of transparency that will surround the use to which it is put. If it were for example simply a contribution towards the costs of bailing out the banks in the future or underwriting the losses of Lloyds and RBS, then fighting for its introduction it will have been a waste of time.
I think we need to link the introduction of the tax to a debate around what is called ‘hypothecation’ – that is a clear and public statement about the purpose to which the tax is put.In the absence of such a debate the money generated will just go into the concrete mixer of government funds .
And how about a Government sponsored on-line and public debate ? Should there be an arms length body set up to distribute it as with the lottery? That would be a delicious irony as the Tobin tax is in effect a tax on gambling!
My ideas ? Kick start the so called Green revolution – fund an ethical Green Investment Bank, provide Feed in tariff payments at levels that are realistic and certain, provide start up funds for new entrepreneurs in engineering and manufacture etc. But they are just my ideas.