The levying of a tax of up to 0.5 percent on short-term foreign exchange transactions. According to a proposal by U.S. economist James Tobin, this was intended to stabilize the foreign exchange markets, i.e. by charging short-term transactions more than long-term ones. – The argument against this is that expectations of devaluation losses/appreciation gains in crisis situations are so high that this tax could hardly prevent corresponding dispositions. Moreover, all countries in the world would have to introduce such a currency speculation tax at the same time; otherwise there would be loopholes. – Major shifts on the foreign exchange markets are always an expression of investors’ distrust in the (economic) policy of the country concerned. These doubts must be credibly dispelled (causal therapy). Intervention in the foreign exchange market as symptomatic therapy never cures the underlying problems, but experience shows that it exacerbates them. – See flat tax, bank penalty tax, financial transaction tax, money abolition, resentment effect, steering tax, speculator, speculation tax, structural upheaval.
Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/