‘Disastrous’ Tobin Tax would hurt UK
Professor Philip Booth warns a tax on financial transactions would raise problems not revenue
European Commission President, Jose Manuel Barosa, last week proposed the introduction of a tax on financial transactions in Europe. Announcing the plan for a so-called Tobin Tax, he declared: "It is a question of fairness. It is time for the financial sector to make a contribution back to society."
But in this week's Cass Talks, Professor Philip Booth, warns a levy on financial transactions would be disastrous for the European financial sector and claims Britain, where 80 per cent of transactions take place, would be hit hardest. "This is like having a tax on olives to spend the money on refurbishing red telephone boxes," he says. Professor Booth also points to the experience of other countries, such as Sweden, where the tax has failed in the past.