Tobin tax

A Tobin tax was originally defined as a tax on all spot conversions of one currency into another. It was suggested by James Tobin, an economist who won a Nobel Memorial Prize in Economic Sciences. Tobin's tax was originally subjected to penalize short-term financial round-trip excursions into another currency. By the gradual 1990s, the term Tobin tax was being applied to all forms of short term transaction taxation, if across currencies or not. Another term for these broader tax schemes is Robin Hood tax, due to tax revenues from the presumably richer speculator funding general revenue of whom the primary beneficiaries are less wealthy. More exact terms, however, apply to different scopes of tax.

Recent proposals

In March 2016 [1]. This was widely viewed as a warning to curb shorting of its currency the yuan. It was however expected to keep this tax at 0% initially, calculating potential revenue from different rate schemes together with exemptions, in addition to not to impose the actual tax unless speculation increased.

Also in 2016 US Democratic Party POTUS nominee Hillary Clinton forwarded in her platform a vow to "Impose a tax on high-frequency trading. The growth of high-frequency trading has unnecessarily placed stress on our markets, created instability, and enabled unfair and abusive trading strategies. Hillary would impose a tax on harmful high-frequency trading and redesign rules to work our stock markets fairer, more open, and transparent.". However, the term "high-frequency" implied that only a few large volume transaction players engaged in arbitrage would likely be affected. Clinton referred separately to "Impose a risk fee on the largest financial institutions. Big banks and financial house would be invited to pay a fee based on their size and their risk of contributing to another crisis." The calculations of such fees would necessarily depend on financial risk management criteria see Basel II and Basel III. Because of its restriction to known "harmful high-frequency trading" rather than to inter-currency transactions, neither of Clinton's proposals could be considered a true Tobin tax though international exposure would be a part in the "risk fee".