RN: Tobin tax discussion


Jan Slakov

Dear RN list,   Feb. 7

Another "front" for us to think about is the idea of instituting some kind
of financial transaction tax (or Tobin tax).

In Canada support is being organized for a private Member's Bill (Motion
M-239) to support the Tobin Tax idea. (See second message below.)

And Roberto Magellan in Brazil sends us news of the French-based ATTAC
initiative along the same lines. As he points out, a Tobin tax will not
SOLVE the underlying problem, but it deserves our attention for it can
contribute to reaching our goal.

all the best, Jan
Date: Wed, 13 Jan 1999 23:30:09 -0200
From: •••@••.••• (R. Magellan)
Subject: Tobin tax discussion draft

The French-based organization Attac has sent through the Net a draft for 
discussion purposes about the Tobin Tax proposal (see it below).   Among its 
authors is the leading French Marxist economist François Chesnais.  He seems 
to be little known in the English-speaking world, but he is one of  the most 
cited authors both in Latin Europe and Latin America about globalization issues.

ATTAC has changed its full denomination while keeping its shorth name:  now 
it means  Association for a Taxation on financial transactions to Help 
Citizens  (Association pour une Taxation des Transactions financières pour 
l'Aide aux Citoyens), so quitting its former mention to the Tobin tax.   
Attac also means "attack" when pronounced in French  (attaque) and keeps 
this meaning in other languages too, as "ataque" in both Spanish and 
Portuguese and  "attaco" in Italian. Nowadays, Attac has two national 
sections in those countries most vulnerable to heavy speculative attacks    
---Brazil (including her main partner, Argentina) and Canada  (links in its 
home page   <http://attac.org/> )---    but intends to become a worldwide 
movement, what it will surely be!   In my view, these countries are the most 
likely to spread a domino effect into the US economy.

For several reasons I'm skeptical about the Tobin tax proposition as a means 
to "tame" the international  flows of so called speculative capital and risk 
hedging currency transfers (mainly short term ones, as the tax is focused 

By the way, I think that the distinction between "speculative" and 
"productive" capital  (or industrial and finance capital) is a delusive and 
rather ideological one, though it is often deeply rooted  in the lefties' 
minds.  At the best, it only makes sense in a certain span of time, since 
industrial capital must be realized and its fruits (dividends etc.) are to 
be periodically compared with the prevailing ratio of return, that is 
ultimately set up by finance capital.  By its own economic nature, capital  
IS speculative.  

Nevertheless, the Tobin tax, as well as regulatory practices alike, shows 
that the international economy is manageable someway, what runs against the 
conventional wisdom shaped by the conservative midia.

The authors of the draft proposal are aware of the objections set against 
the Tobin tax on the grounds of its workability and they refer to some of 
them, including both tax evasion and tax avoidance (or "tax planning").   
Even so, they argue  that the difficulties to enact it are political rather 
than economic ones.  They mention the financial quarantines imposed by Chile 
and Colombia on speculative inflows as an example of successful political 
will  (other countries, including Switzerland, could be added to this list).

Let's make a sketch of the draft propositions:

                a) The Tobin tax is rather symbolic:  "its symbolic effect would bear an
important political impact."  According to the authors, the Tobin tax would
cast doubts on the present fatalism about the correlation of forces, that is
detrimental to labor.   "It would stress once more the needing to make a 
workable international public regulation to face the instability of capital 
markets."   This tax  "would address a strong political admonishment to the 
main economic agents"  [sic!  "un avertissement politique fort"].  It does 
not intend to avoid the great crises, but it could have a pre-emptive effect 
in moderating the vulnerability to them, not in abolishing them.

                b) The Tobin tax must be introduced worldwide.  A punitive tax should be
imposed  on the flows coming from and going to tax havens.

                c)  "Today a transaction (un ordre de change) bears up to eight derivate
operations (opérations induites), what opens a large and hazardous (inutile)
room to speculation.   The Tobin tax will reduce the dimension of the 
markets without paralyzing them.  It will work on a pre-emptive basis for 
rendering certain operations unprofitable and so will avoid the start up of 
unstabilizing  attacks against currencies."

                d)  It is an embryo of international control over  financial speculation.
"Even if the exchange market is the only concerned, this market is at the
core of every financial international operations with all kinds of assets,
including long term investments.  As long as Tobin tax intends to give back
more autonomy to domestic economic policies in relation to the financial 
speculation with currencies, it will help  these former ones" (...)

                e)  The Tobin tax is an initial step towards an international regulation
of the financial system and of the present exchange markets, according to
the authors.

In solidarity, 
Roberto Magellan

 Paix entre nous, guerre aux tyrans  (....)
 Ouvriers, paysans, nous sommes
 Le grand PARTI DES TRAVAILLEURS.  (L' Internationale)


Date: Wed, 13 Jan 1999 11:15:26 +0100
To: "Attac" <•••@••.•••>
From: •••@••.••• (CS - ATTAC)
Subject: Pourquoi soutenir la taxe Tobin ?


Christophe et Emmanuel

<snip> of text in French

Date: Sat, 06 Feb 1999 00:19:22 -0800
From: Aaron Koleszar <•••@••.•••>
Subject: UPDATE - Tobin Tax

From: Laura <•••@••.•••>

Laura C. Coletta
The Council of Canadians

Citizen's Declarations are pouring in - thanks for sending and sharing
them!  Note that the Halifax Intiative site (www.
sierraclub.ca/national/halifax) now has an automatic email sendback for
those wishing to sign the Citizen's Declaration on line.
I have included text of two letters recently sent to MPs in this mailout
and urge you to use them (if you wish) in your letterwriting to your MP.

The Canadian Labour Congress has just posted its "Put the Brakes on
Currency Speculation" campaign on its homepage and from it you can fax
your MP directly. Visit the Canadian Labour Congress site at
www.clc-ctc.ca/eng.index.html and clicking the FAX YOUR MP icon. Select
the "Put the Brakes on Currency Speculation" campaign, type in your name
and postal code, and a draft letter(which you can edit) to your MP will
appear on your screen. Edit and send!
You can also send a letter from the Internet activist 'FAX THE FEDS'
site at ww.net-efx.com/faxfeds .
Good luck with your letterwriting. Please let us know whether your MP
will support the motion.
Robin Round
Regional Coordinator
Halifax Initiative

Hour 2 of the debate on Motion M-239 will be held on Wednesday, Feb 3rd
at 5:30pm. I urge all those in Ottawa that can, to 'head for the Hill'
<snip> of sample letters. Please contact Jan <•••@••.•••> or
Aaron Koleszar <•••@••.•••> for the full text.