A so-called “Tobin Tax” has been pushed by France and the UK, but is less popular in the US.
The leaders called on the IMF to look at a range of options to ensure that banks do not take excessive risks that could lead to another financial crisis.
The call comes in a draft statement expected to be approved later.
“The European Council emphasises the importance of renewing the economic and social contract between financial institutions and the society they serve, and of ensuring that the public benefits in good times and is protected from risk,” the draft statement said.
Speaking at a conference in Brussels, UK Prime Minister Gordon Brown said: “We need a better relationship between the banks and the people they serve.
“There has been a growth in support in recent weeks for this idea and many, many countries are looking at it.”
I firmly believe this has much less to do with “fairness” than it does with the tax being a stealthy way to raise lots of money for politicians to use to buy votes from the recipients of their largesse. At some point the diminishing number of people actually paying taxes will no longer consent to be governed by these hypocritical (read as you citizens make the sacrifice; we in the governing elite will still maintain our lifestyle) politicians and bureaucrats. I hope this happens while we still have the right to vote them out of office.
On a side note, I had a pleasant conversation yesterday with the legislative aide to a co-sponsor of the U.S. House “Trader Tax” bill. When I suggested it would have the unintended consequence of hurting farmers who trade futures contracts to hedge their crop sales and generate some additional income, he said they had not thought of that. He also seemed somewhat receptive to my idea to instead impose a windfall profits tax on the very large, very profitable speculators such as Goldman Sachs and George Soros. We’ll see what happens.