Over 85 percent of these transactions are of a purely speculative nature and bear little or no relationship to the production and trade in goods or services. In fact, more that 40 percent of these transactions involve the movement of money in and out of a country in fewer than three days. Over 80 percent involve similar trips of less than a week. The Tobin Tax would prevent such erratic investments, and foster more productive long-term investments. When countries cannot defend their currencies they effectively lose control of their monetary policy.
Financial speculation is a threat to sovereignty.
Global financial crises have had a particularly harsh impact on industrial workers, farmers, and indigenous populations. However, the crises have had a spillover effect in the United States by contributing to increased trade imbalances, stagnant or falling wages, dumping of low-price products on overburdened markets, increasing manufacturing unemployment and volatility in agriculture markets. A similar resolution passed the Canadian Parliament last year by a 2-1 margin and the issue has been debated in several other countries including England, France and Brazil. The measure would help prevent future financial crises like those that have devastated Mexico, South East Asia, Russia, and Brazil in the past few years. View a printer-friendly version of this page.