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German study states Tobin tax feasible

Published 21 March 2002 - Updated 29 January 2010
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A new study by the Goethe University, ordered by the German Ministry for Economic Cooperation and Development, concludes a Tobin-like tax is feasible.

Background: 
The study by Mr Paul Bernd Spahn of the Goethe University in Frankfurt (Germany) concludes the Tobin tax can be implemented unilaterally by Member States of the OECD, individually or (preferably) as a group. It could also be implemented by the EU in cooperation with Swtzerland. Implementation problems concern the definition of the tax base and the taxpayer but revenue estimates of a tax of one basis point would result in an amount of 17 to 20 billion euro for the EU plus Switzerland.

A recent analysis by Deutsche Bank on the other hand concluded that the "preoccupation with the tax is not helpful for economic policy in practice and is distracting attention from the real problems of the world". It also concludes the tax is unfeasible and if implemented would potentially have enormous unwanted side-effects. The ECOFIN in November 2001 invited the Commission to present it with a report on possible financing sources for development, including research on a Tobin-like tax.

 

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