Talk:Tobin tax/Archive 1

Mistakes in the lead section now exclusively edited by Boyd Reimer
The lead section (monopolized by Boyd Reimer - standard users can no longer edit it) contains an incorrect ES->EN translation by Boyd Reimer ('0,5% del volumen de la transacción' -> '0.1% of the volume of the transaction'), which allows this editor to link the Tobin name to a 0.1% tax rate, rather than to 0.5% used by Tobin in 2001 (when most currency pairs already traded with 50-times narrower spreads, showing how obsolete the Tobin idea really was even then). But that mistranslation could be a bona fide mistake (and should be immediately corrected by the monopoly editor of the lead section, and a verifiable source for the 0.1% rate should be provided).

It is very surprising however that the only editor still permitted to alter the lead section is the same person who turned the Wikipedia into a soapbox, by inserting several quotes (in total 10% of the Tobin tax page) from a self-published website of an organization whose cited goals include ensuring that "demands for fundamental reform of [..] the International Monetary Fund, were high on the agenda of the Group of Seven's (G7)" (see http://halifaxinitiative.info/content/about-hi ). In fact it would be difficult to find any edits made by Boyd Reimer that would be anti-tax or neutral or cite a peer-reviewed article (as opposed to political views), and thus most of his edits fall short of Wikipedia standards on the grounds of at least WP:SOAP and WP:SELFPUBLISH policies (but possibly also WP:NONENG, because several non-English publications have been translated and quoted by this editor). I'm not calling for their removal - we need balanced articles even for such ideas as 5000% taxation. But granting monopoly editing powers seems rather inappropriate in case of this particular editor. —Preceding unsigned comment added by WWWords (talk • contribs) 20:51, 1 January 2010 (UTC)


 * Greetings WWWords:


 * Thank you for correcting the percentage. Two heads are always better than one.


 * I can see that you have already discovered how to edit the lead section. (I am also happy that you have thereby discovered that I do not have a "monopoly" on editing the lead section.)


 * Actually I never did any translation. Instead I simply copied and pasted the content which someone (other than myself) had erroneously translated previous to my first edit of this page. Click here to see evidence that the error in translation occurred before I made my first edit on this page. (look in the section called "Original idea....")


 * Also see this link which shows the quoted percentage as "one percent" (not 0.1% and not 0.5%) I now included that link in the Wikipedia article, in two places. Plus, I left the old links in place, also. That way, the readers can decide for themselves which link to believe.


 * Please note that Tobin himself changed his own percentage over the years.


 * As you look back at my edits you can see that I did a fair amount of moving content from one place to another on this page. My reason for doing that was to make it more readable, and to allow for others to expand the article. When I first came to the article the sections were so long as to be inaccessible to the visitor who wants to find information quickly on a particular aspect of the debate around the Tobin tax.  Many of my edits were to allow for future expansion.


 * I moved things: I admit that I should have also taken the time to double check everything that I moved. But that takes more time and is a work in progress. Wikipedia policy does allow for "works in progress." See Wikipedia is a work in progress


 * On the topic of bias: In my edits, I was careful not to delete any content which was against the Tobin tax. In fact in some cases, I made that content more accessible in the following way:  Before I made my first edit, much of the content against the Tobin tax was part of a long unbroken body of text.  I broke it up, put headings in and made it easier for a visitor to the page to quickly locate both sides of the debate.


 * Thank you again for correcting the translation.


 * Two heads are always better than one.


 * PS. I am not a representative, nor member, nor donor to the Halifax Initiative. I have never been to Halifax and don't live anywhere near it.


 * PPS. Wikipedia policy on discussion pages is to enter new material at the bottom of the page, not the top. But I don't hold that against you. See this link: Discussion_page


 * Boyd Reimer (talk) 01:17, 2 January 2010 (UTC)

Yes, we all make mistakes. Mine was to trust Malaga University or rather the owner of the 'eumed.net' domain. Would you care to remove the link to eumed.net on grounds that its 0,5% rate attribution to Tobin is no longer WP:RELIABLE ? It would be nice as well (albeit unlikely) if someone informed the Malaga University that it should not be associated with such misinformation.

Actually, I was a bit surprised with the link you provided, because it was already there, referenced in another section. We both seem to have missed its importance, which is rather sad, because it is our best, almost primary source on Tobin's latest views. All other sources are either less modern or secondary or both - with predictable results: the internet has hundreds of secondary sources 'quoting' (read: copy-pasting) the Spanish translation with the incorrect 0,5% rate. One can easily start believing it is true.

Worse still, all of these secondary Spanish sources propagate the unfortunate adjective ('small') with reference to the 1% tax rate. This adjective is not present in the Der Spiegel English 'original', and we both know that it would be anything but small in currency markets (by orders of magnitude), so it is much safer to remove it on the basis that it is only present in the Spanish secondary translation (which has been already discredited by the 0.5% mistake, see WP:RELIABLE).

And there are some consequences of our 0.1% -> 0.5% -> 1% corrections. Prof. Tobin passed away just 6 months after his last interview for Der Spiegel, so when exactly did he find the time to change his mind after 30 years of staying put with the 1% rate? The rate was 1% in 1971, and it stayed 1% in Sep. 2001 (see our most reliable Spiegel link you so kindly pointed out) - 1% it was all the way, no need to 'modernize' an idea which has outlived its utility. So these two claims attributing modern DeFazio rate of 0.25% and the 0.1% rate (which I indeed once saw in the Oxford Uni tome, but based on a outdated misconception about what retail customers pay in spreads - it is 50-100 times lower nowadays) to Prof. Tobin:

"subsequently lowered to between 0.1% and 0.25%, as we see in later quotes from Tobin in 2001"

and:

"The original tax rate James Tobin proposed was 1%, which was subsequently lowered to between 0.1% and 0.25%."

these claims should be removed by someone, ideally by their original editor (i.e. yourself) if only to avoid instigating 'content removal wars' (and because opposers will probably replace it with 'stayed at the same level (of 1%) for 3 decades while exchange rate spreads tightened to 0.00001').

Thank you for your help with the Wiki ropes. I'm pleasantly surprised by the maturity (complexity) of the rulebook and the richness of the local customs! A veritable culture in itself! WWWords (talk) 10:18, 2 January 2010 (UTC)


 * Greetings WWWords:


 * Thank you again for your correction of the translation: As you may have already done, I went to the original source at this link, and, yes, "einem" is the German word for "one." (Click here to see translation of "einem.")


 * Because of the above, I quickly made several corrections to the article, as you can see. After checking sources, I could find no rate other than 1% suggested by James Tobin. Perhaps others can find that information.


 * Boyd Reimer (talk) 13:06, 2 January 2010 (UTC)


 * Update: "einem halben" means "half of one" My apologies - Boyd Reimer (talk) 17:59, 9 February 2010 (UTC)

Greetings Boyd,

Thanks to your excellent sleuthing we have finally arrived at the truth of the matter. But the story will now take one final unexpected turn. That German-language Der Spiegel link you've just provided above - the true 'ad fontes', will change the direction of our little quest yet again. We shall be following the pronouncements of our Deity once again without questioning His data and research methods as His true and only disciples. My apologies to the Spaniards from the great Malaga University! I happen to have studied the language of the Vedas (well, Business German helped too) well enough to notice that all-important Dativ of 'halb' in The Prophecy of 2001:

'einem halben Prozent'...

And 'klein' is definitely there as well (good you left it unchanged! - prophetic really). Although some more work will be needed to repair the changes we've just made, hasn't our understanding of the Scripture improved immensely? And what a great case study of how Wikipedia triumphs over traditional media... that English-language mistranslation on the Der Spiegel website was rather unexpected - best storytellers could not come up with this number of twists and turns - but true life never gets bored with such things. And we should definitely get a life!

By the way, I did notice the justifiable changes from 'pro-tax NGO' to a 'pro-Tobin tax' NGO. Right, we need to be precise. Or else some donors could think that Halifax Initiative supports the Goverment's attempt to tax everyone by stealth, which is how Malkiel and Sauter claim the Tobin tax would work in the US: http://online.wsj.com/article/SB10001424052748703558004574579903734883292.html

and the LSE-funded study claims it already does in the UK: http://www.lowtax.net/lowtax/html/offon/uk/uk_gotaway.html

By all means criticize these for lack of global perspective, but do not forget to include them for completeness' sake...

WWWords (talk) 18:45, 2 January 2010 (UTC)

Further reading: The true Tobin tax rate discovered by... speculators!

When I reflected on our search for true value of the Tobin tax rate, I realized it was something else: what we did here was as good an analogy of how price discovery mechanism works in speculative markets as it will ever get...

When I initially arrived here, the first thing I did was to search for some arbitrage opportunity: I double-checked the prevailing estimate of the true value of the Tobin rate. I noticed that the market quote was 0.1%, i.e. it was undervalued from what I though the correct value was, i.e. 0.5%, so I went long (Tobin Tax No. 1). I managed to convince sufficiently many buyers so our common pressure caused the market consensus rate to increase five-fold up to the expected 'true' value of 0.5%, so I then went flat (Tax No. 2).

Then came your sudden re-apprisal of the true value from 0.5% to 1.0% - we both agreed and I bought again (Tax No. 3), bidding the price up until the new high you correctly predicted.

But then bad news from Frankfurt hit the global markets, everyone suddenly discovering that German Government refused to pay back any of the money it borrowed from us (i.e. defaulted on its bonds), so everyone started panicking, fearing another Russian or Argentian default scenario. My hypothetical hedge fund immediately decided to go short to not only protect but also profit from from the expected panic selling, unwittingly punishing the Government for their failed promises. I reversed my long position (i.e. sold once to flatten it, and immediately sold once more to open a short position, duly paying the Tobin tax No. 4 and 5). We again made money for our clients (mostly pension funds these days) while the previous optimistic evaluation of the government's value corrected itself down from 1.0%, returning back to my original estimate of the true value (0.5%).

So I flattened the position (Tax No. 6), because the Tobin tax rate was at its fair value now and any prediction about its future change would be a mere roullette wheel gamble from this point. I did not depress the markiet price, because I offloaded my holdings slowly, selling to those who plotted the recent history of the Official Tobin Tax Rate and 'bought the dip', hoping in vain (?) that the rate will soon climb back to 1%.

Notice that our objectively 'pointless' and 'useless' (in hindsight) frantic buying and selling, exerted the appropriate pressure on the market price (displayed as those wild fluctuations of the Tobin tax rate on the Wikipedia pages). This pointless speculation was absolutely necessary to arrive at the final value. The fact that the final rate now reflects the true intrinsic value of what we tried to predict simply required our moving the Tobin rate up and down, i.e. the very thing the Tobin followers are trying to punish - volatility.

Here the value which was initially unknown - the Tobin tax rate, which we had no clue about and thus moved it so badly up and down (by hundreds of percent in a matter of minutes!), could have been just as well a speculative price for cotton, Ford shares, pork bellies or Government bonds.

Yes, we did overshoot the true value by 100% following your market research, so a -50% correction was required afterwards, which was no doubt painful for those greedy speculators who joined us at the very top (of 1%), trusting the Wikipedia quote blindly, thinking that no research work is required to succeed, because speculation is 'easy'. But if the transaction tax (which we paid 6 times) was large enough to stop the two of us - price makers - from speculating altogether... the market perception of the true value could have remained fixed at the initial 0.1%, i.e. 5 times under the *real* true value - you go and tell that to the cotton farmer's kids or indeed to the ever-hungry Government... that they are going to be short-changed 5 times.

I hope this little analogy helped all of us to see the pure evil of speculation in a slighthly more favorable light... —Preceding unsigned comment added by WWWords (talk • contribs) 20:40, 2 January 2010 (UTC)

WWWords (talk) 20:42, 2 January 2010 (UTC)


 * I am assuming good faith in your comments. However, as you become more familiar with Wikipedia you will become familiar with Wikipedia policies:
 * This Wikipedia policy states that “talk pages exist for the purpose of discussing how to improve articles; they are not mere general discussion pages about the subject of the article,”
 * Boyd Reimer (talk) 07:58, 21 January 2010 (UTC)


 * Update: "einem halben" means "half of one" My apologies - Boyd Reimer (talk) 18:00, 9 February 2010 (UTC)

limit the negative effects of globalization
The following paragraph is about to be deleted as it is nonsensical if literally interpreted (if the major economic institutions are pro-globalization and the Tobin tax is intended to remove the negative effects of globalization, then there is no conflict). Perhaps someone would care to revise it?


 * Another difficulty is that this tax is meant to limit the negative effects of globalization whereas the major economic institutions like the World Trade Organization and the World Bank are essentially pro-globalization.


 * What's the problem with the paragraph? I think it's obvious that the type of globalization that the major economic institutions favour includes, according to the Tobin tax supporters, the negative effects that the tax is inteded to remove. I'm restoring it. Sir Paul 03:18, Mar 4, 2004 (UTC)


 * The problem is one of logic. While the WTO and the IBRD and other IFIs support globilization, they are also seeking to "limit the negative effects" of globilization. One statement does not lead to the other. —Preceding unsigned comment added by 60.234.172.213 (talk) 07:05, 21 February 2010 (UTC)

How "recent" is "recently"?
A sentence in this article tells us that Chavez "recently" said such-and-such open the subject. The term "recently" is meaningless in a reference work. Could somebody give us a date -- at least a month and year -- for his comments?

Inappropriate style

 * That language is ambiguous. Does "in concert" mean an international authority has to agree before Canada will act?  Or simply that Canada will enact such a tax unilaterally once it is confident it has consulted properly with other countries' treasury officials?  or something else?


 * That's the nub of the issue. Are currency speculators, such as George Soros, a 'useful lot' or are they doing something that ought to be discouraged?

I'm moving these sections to talk pending some rephrasing: they seem to be framed in a register not appropriate for an encyclopedia. Sir Paul 03:12, Mar 4, 2004 (UTC)

Here is recent
President Chirac has come out with an international tax proposal which seems to have a Tobin like tax component.

My changes
''Opinion are divided between who believes that the Tobin tax would improve the economy of countries that are damaged by financial speculation and defenders of pro-globalization goals that believe that it would constrains globalization in ways which conflict with the policy of economic institutions like the World Trade Organization and the World Bank and would have then to be rejected. Other people argues that the tax would promote globalization but limit its negative effects.'' That's good? (I hope I didn't make any mistake with English)

I put a new paragraph about Tobin's view on his own tax and antiglobalization movement (it's not NPOV to put Tobin's critic behind the link at the bottom of the page) and reorganized a little bit the page--Juliet.p 15:17, 13 Jan 2005 (UTC)

Thanks Juliet, and Query about Spahn
I'm going to trim what I think is an excessive bit of wikification. "Commission of Finance and Budget in the Belgian Federal Parliament approved the bill implementing the Spahn tax (version of the Tobin tax proposed by Paul-Bernd Spahn)."

Spahn doesn't seem to be notable for anything other than this tax proposal. So it seems unnecessary duplication to have a bio article on him and an article on his proposal ... why not just a bio article which will discuss his proposal? Anyone looking for this info should be able to find it that way.

Query, though: does he really hyphenate his first name? I've seen the name without that hyphen. --Christofurio 18:10, May 22, 2005 (UTC)


 * It seems to me, as a newcomer to the subject, that the principal effect of a Tobin tax is to protect political over- and under-valuations of currency against the corrective levelling effect of speculation. This supports mercantilism, rather than one-worldism of whatever flavor.  &mdash;Tamfang 17:40, 3 June 2006 (UTC)


 * Every tax has at least two effects -- one depending upon what it deters, the other depending upon what is done with the money it generates. Some of the Tobin tax advocates want to deter currency speculation, which they regard as xcessive and destabilizing. You have a point -- this might be regarded as the defense of mercantilism. Other advocates (or the same ones at different times) are more concerned with what good things can be done with the money that'll be raised. User 82 has a point too. If one dislikes the idea of a world govt., one might plausibly suspect that this tax is a scheme for funding such a thing, and one would oppose the latter in order to oppose the former. --Christofurio 20:17, 4 June 2006 (UTC)

link to Der Spiegel for citation
There is a Spiegel citation concerning the Tobin interview, but the words are a bit different than those mentioned in the wiki article http://www.spiegel.de/international/spiegel/0,1518,154539,00.html

Section on Effectiveness was removed
Appeared to be plagiarized from a textbook, if you wrote this please cite all sources before reverting. --AF985 11:51, 23 June 2007 (CST) Was first added by user Harald Hau on 23 April 2006 along with many edits from an IP user, I think it may have been original research from this.

UK August 2009
The Chairman of the UK financial services authority, Lord Turner, made a speech on the 26th August 2009 in which he supported, or stated that he might come to support the introduction of the Tobin Tax as part of tightening up the London Market's regulatory environment. I have no press references for this, but the Guardian's economics editor published an article “Forgotten brainchild that could transform the banking casino”. I don't know if this was a retraction by the Guardian of the line suggested in the main article, but should this be added to the links list.

--DaveLevy (talk) 15:20, 2 September 2009 (UTC)

Is a Guardian editorial even an authoritative enough source to quote in this context? it's certainly evidence of some opinion against the tax, but fails to make a case - it's no more than an assertion that any implementation of the tax would lead to loss of liquidity. —Preceding unsigned comment added by 155.140.133.254 (talk) 12:27, 11 September 2009 (UTC)
 * Agree, it's simply assertion. I'm removing it. /Strausszek (talk) 03:39, 10 October 2009 (UTC)

Tobin's original words
Provoked by the UK debate I wondered how the tax would work and have found some information on the proposals, I have written the following,

Princeton Encyclopedia of World Economics, from Google Books has an entry on Professor Tobin, which states that the Tax was first articulated in a paper called, “Prospects for Macro-economic Policy”, published in The New Economics One Decade Older by the  Princeton University Press 1974, and developed in “A Proposal for Monetary Reform” in Eastern Economics Journal in 1978. In 1996, he revised his ideas in the light of developments over the previous 22 years, in the Prologue of, “The Tobin Tax: Coping with Financial Volatility, edited by Mahbub ul Haq, New York, OUP. The Princeton Encyclopedia also references Keynes, 1936 in the "General Theory" as arguing that a tax on Securities would reduce speculation.

but it is clearly lifted from the Google Books page.

What's the rules? Is this copyright? Can we point at other Encyclopedia, or is my lifting of the source list fair use?

--DaveLevy (talk) 15:20, 2 September 2009 (UTC)

Introductions
The third intro paragraph opens a quote, but doesn't close it(?). Also, the third and fourth intro paragraphs seem to have a bit too much 'practice'/politics in them, as oppose to explaining the theory. Maybe they would be more appropriate in the debate section.

--(JoeSpaceTime (talk) 02:26, 14 December 2009 (UTC))

Boyd Reimer (talk) 18:29, 2 March 2010 (UTC)

Assessment comment
Substituted at 20:54, 4 May 2016 (UTC)