Tobin Tax: Will Hutton backs it, idiots disagree

Brilliant article by Will Hutton in the Observer on Sunday, but I cannot find it today. You'll have to check your recycling basket. Page 8

Take home points:

He is talking of a Tobin tax on financial transactions, such as dealing in derivatives . The tax will not just go to poorer countries, but also to insure and cushion against the next Credit Crunch.

A tax of 0.01% on Sterling deals would raise £2bn a year.

This is a big moment, because the Treasury has been against Tobin Taxes up to now. This represents a sudden arrow of golden sunlight coming through the window and illuminating a previously darkened room.

The sheer raw justice of banksters paying for their own mistakes, by means of a tiny tiny tax , (<1%)>

"It will make the City of London uncompetitive".
Not if it goes global. Germany, France, and possibly Japan would back it. Obama will see the logic. Basket case Anglo-capitalists like Oz and (regrettably) Canada will change if Obama changes.

"It will destroy the financial system's liquidity".
This was Tobin's original idea, to damp currency speculation. So, good.
Yeah - like a tax set at under 1% will grind the system to a halt? Try harder, banksters. Go earn that bonus.
More objections:

It would be difficult to administer.
Not. The trades are done on computer. It just needs a script that slices off the tax % and fires it in the direction of the tax pool. What the objectors are thinking of is the cowboy style derivatives - CDOs &c, which are done as back room deals. But Geithner is going to bring all the derivatives into an exchange, so the objection falls.

"Trades will flee to the tax havens"
See 3 above. Tax Havens are going to become history.

The sheer natural justice of the Tobin tax makes it a no-brainer to all except the greedy banksters who stand to lose an infinitesimal percentage.

Advantages:

1. All should pay tax including bankers.
2. Tax from the very richest should go to the very poorest. Anglo-capitalism is inherently divergent. This corrects the divergence.
3. Some of the tax can go to insure against the next Credit Crunch.
4. Will Hutton agress so it must be right.