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September 21, 2009    

French President pushes for Tobin Tax

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by Kay Murchie

The BBC has reported that French President, Nicolas Sarkozy, wants to introduce a levy called Tobin Tax, aimed at curbing the bonus culture in the City.

Tobin tax is the suggested tax on all trade of currency across borders and was named after the economist James Tobin in the 1970s.

The proposal was suggested by the chairman of the Financial Services Authority last month.

In an interview with Prospect magazine, Lord Turner attacked the industry and said some of the City’s activities had “swollen beyond its socially useful size” and was happy to consider taxing it.

However, Lord Turner’s proposals were criticised by many. Tory MP John Redwood dismissed the proposals as “absurd”.

Meanwhile, returning to Mr Sarkozy’s proposal, senior EU officials told the BBC that the chances of the tax receiving global agreement were “less than minimal”.

At the recent meeting of G20 finance ministers, Mr Sarkozy proposed a series of mandatory caps on bonuses but it was rejected by other ministers, with UK Chancellor Alistair Darling dismissing them as “unenforceable”.

As a result, last week, the Elysée Palace reported that Mr Sarkozy, may walk out of the G20 summit in Pittsburgh this week unless an agreement is reached with regard to bank bonuses.

France has long been arguing that excessive bankers’ bonuses reward the risk-taking that led to the financial crisis.

The G20 summit is to take place on September 24 and 25 and is to focus on tightening global financial regulation.

However, Prime Minister Gordon Brown recently expressed concern as to whether a worldwide tax was practical.

“If one or two countries refuse to adopt a common levy or action or taxation, then it makes it very difficult to implement,” he said.

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1 Comment »

  1. Brilliant. The increased cost of these transactions will be passed on to the poor through higher fees. Those that are unqualified to rule over us need to step down.

    Comment by taxprey — September 21, 2009 @ 6:08 pm

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