A Compound Tobin Tax: A Political Economy Investigation
Keywords:International financial instability, Financialization, Multinational corporations, Tobin tax, Policy coordination
The paper focuses on international tax proposals and analyzes rationales and challenges for adopting a compound global tax. It is proposed here that such a compound global tax instrument would mainly need to focus on two tiers. The one, based on the U.S. President Joe Biden’s 2021 suggestion, would need to close off tax avoidance and tax evasion possibilities for large multinational and transnational corporations; and the other, based on the James Tobin’s 1972-tax proposal, would seek to eliminate the speculative dimension of international foreign exchange dealings. These tiers are discussed extensively in this contribution, concluding with the suggestion that policy coordination is paramount.
Keywords: International financial instability, Financialization, Multinational corporations, Tobin tax, Policy coordination.
JEL: F3, F6, G01.