Gay Mitchell
Ceist:14 Mr. G. Mitchell asked the Minister for Finance his views on a Tobin tax; and if this has been discussed at the GAERC. [21101/03]
Vol. 573 No. 5
14 Mr. G. Mitchell asked the Minister for Finance his views on a Tobin tax; and if this has been discussed at the GAERC. [21101/03]
The issue of the Tobin tax has been considered in a number of fora, including the informal ECOFIN meeting at Liege on 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 believed that it was 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.