For a long while now the Tobin Tax, or Robin Hood Tax, has been discussed.
It's been heavily promoted by sympathisers such as Richard Curtis and his luvvies mob, but has yet to gain serious traction in Parliament or amongst the G20.
Nevertheless, it now looks like a Tobin Tax will be a reality as the European Commission President, Jose Manuel Barroso, confirmed last week that he will make a proposal on a financial sector tax after the summer.
This will cause a further fissure amongst the Eurocrats – as if Greece wasn't a big enough one – as the proposal for a Tobin Tax is supported by France and Germany, but opposed by Sweden and other member states.
The UK is divided on the issue, as it is something that is seen to be appropriate but only if it is agreed globally, rather than regionally.
Therefore, in a timely issue, the Institute of Development Studies (IDS) sent me a copy of their report into the viability of such a development.
Their report states that: "applying a 0.005 per cent tax to the foreign exchange market alone might raise US$25 billion annually worldwide and £7.5 billion for the UK."
In these times of austerity measures, cutbacks, budget restrictions, government handcuffing and worse, this deal is surely too good to ignore?
Concluding paragraph of the IDS report:
“Although the evidence is not conclusive on all points, a Financial Transaction Tax is clearly implementable and could make a significant contribution to revenue in the major financial economies. It would be unlikely to stabilise financial markets but, appropriately designed, also unlikely to destabilise them.
“Although a multilateral agreement between the key economies is preferable, it could be implemented unilaterally, at least for a major economy. The incidence of a Tobin tax would be less progressive than some of its proponents claim, but it would be unlikely to be significantly worse than most alternatives.”