A Tobin Tax to curtail the speculative currency transactions

THE PROBLEM / THE SITUATION

Speculative funds sloshing around the world markets create an inherent instability while undermining the real economy and progressive policies at a national level. Currency speculators trade over 1800 billion US-$ each day across borders - about 90% of the currency trade is speculative!

In the globalized economy, there is a lack of adequate funding for global problems such as disease, poverty and hunger. Global climate change, deforestation, population growth and unemployment, declining fisheries and pollution threaten local communities worldwide. Projects which could help to address these needs and create jobs will cost more than 400 billion US-$ annually. Private donors don't meet the need, and some nations have cut their aid budgets.

THE PURPOSES OF A TOBIN TAX

The primary purpose of a Tobin Tax is to curtail the huge growth in speculative currency transactions. The fundraising potential for meeting essential needs is a further important purpose of this tax.

Each trade would be taxed 0.10 to 0.25%. This would discourage short-term currency trades but leave long-term productive investments intact.

The currency market would thus shrink in volume, helping to restore national economic autonomy. Nations again could still intervene effectively to protect their own currency from devaluation and financial crisis.

With the Tobin Tax, 100 to 300 billion US-$ per year would be generated. This revenue makes it possible to meet urgent global priorities, such as reducing the effects of global warming, disease, and poverty.

Revenue could go into earmarked trust funds to fund urgent international priorities.

THE POSITION OF THE VIRGLOB-SP

The VirGlob-SP supports every economic proposal which could change the negative situation. It will support aTobin Tax if this tax wouldn't

- factor into the breakeven point of trade on any given currency

- increase the average sum of any given transaction

- give preference to those who are making the biggest deals

- drive up overall transaction costs

- concentrate wealth even further into the hands of the powerful

HOW TO USE THIS RESOLUTION

When the VirGlob-SP Plenum has accepted this resolution, it will be sent to the members and friends of the VirGlob-SP as well to the media. The members are searching ways to enter this mesures in their party structures and to realize them.

DEFINITIONS / REFERENCES

Tobin Tax Initiative = http://www.ceedweb.org/iirp/

END OF THE RESOLUTION