Michael D. Higgins
Question:141 Mr. M. Higgins asked the Minister for Finance the Government's views on the issue of the Tobin tax; and if he will make a statement on the matter. [10461/02]
Vol. 551 No. 3
141 Mr. M. Higgins asked the Minister for Finance the Government's views on the issue of the Tobin tax; and if he will make a statement on the matter. [10461/02]
As the Deputy will be aware, I have given my views on the Tobin tax issue on several occasions, most recently in reply to Question No. 75 put down by himself on 24 October last.
The issue of the Tobin tax was discussed at the informal Ecofin meeting at Liege on the 22 September 2001. The Belgian Presidency indicated that it wished to pursue the matter in the context of a general study to be carried out by the Commission on the issue of globalisation. However it would be fair to say that most Finance Ministers, myself included, continue to have reservations about the Tobin tax proposal, and believe that it is not clear that a further examination of the issue by the Commission would ensure that satisfactory answers would be given to the many real questions concerning the tax including: the difficulties relating to practical implementation of the tax; its doubtful effect on short-term speculative capital movements; its conflict with the basic tenet of free capital movement in the EU; its disproportionate effect on small business and consumers; the probability that the tax would simply drive participants into other, non-taxable, alternatives; and the negative impact on liquidity in the foreign exchange market.