German Finance Minister includes Tobin-type tax in Budget planning 2012-2015

The German finance minister, Wolfgang Schäuble, has included a tax on financial transactions as part of his budget plan covering the period 2012-2015. This is a very welcome development. Social Justice Ireland has constantly argued for the introduction of a tax on financial transactions along the lines of the proposal originally presented by Nobel Economics Prize winner James Tobin and known since then as the Tobin Tax.

Speaking on March 16, 2011 Mr Shauble said he saw new momentum for a financial transactions tax in Europe and urged the European Commission to drop its “hesitant attitude” towards such an approach.

The European Parliament recently supported the introduction of such a tax. Last week the leaders of the 17 eurozone countries called for the introduction of a financial transactions tax. He urged the European Commission to flesh out the details of such a tax. He rejected the argument that there was need for global agreement before implementing such a tax.

Following the European Parliament’s recent vote in favour of such a measure, the European Commission continued its approach of stalling progress on this initiative. The EU taxation commissioner Algirdas Semeta, called the introduction of the tax in Europe alone “premature” and pledged instead to pursue the issue at global level in the G20 process.

Many EU leaders see a tax such as the Tobin Tax as a way for banks to make some form of recompense for the billions in taxpayers’ money that went into rescuing the financial sector during the global financial crisis.

Leaders of the eurozone countries ended their recent summit by calling for a financial transactions tax – ideally across the EU but only in the single-currency zone if wider consensus was not possible.