Friday, February 3, 2012

Transaction taxes are good

The idea of a financial transaction tax has been around for about 40 years. It is a good idea right now because financial excess caused the recent recession and governments need the money.

A financial transaction tax is a good idea for a lot of reasons. It will raise revenue, it discourages speculation and short term trading, and it promote invest in non-financial assets like factories. Existing global businesses rarely make a wholesale move like people believe, instead they internally invest based on resources(people), facilities and infrastructure, location, executive accommodation and total taxes. When they want a taxes break they set-up a shell company in Switzerland, Jersey or the Cayman Islands. Innovative businesses ignore taxes all together. They follow universities and innovation clusters. California has some of the highest living costs in the world.

So Tobin taxes are one tool of society's effort to regulate financial corporations.

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