The Tobin Tax

Posted by on Nov 8, 2011 in Blog | 0 comments

This WSJ editorial argues against the Tobin Tax on financial transactions,  based on the obvious fact that it falls apart unless all countries enact it (impossible).  It does little, however, to refute the overall desirability of reigning in pure speculative trading.  Proponents of the transaction tax argue that such a tax, by discouraging noise trading, will contribute to stock prices tracking fundamentals better.  They argue that this in turn leads to a more efficient capital allocation.  Interesting debate.

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