Tobin Tax was initially devised (1972) after the collapse of the Bretton Woods agreement in 1971 as a theoretical device for taxing speculative short-term currency trading in order to offset volatility in currencies and stabilise exchange rates. It wasn’t intended to ‘punish’ speculators per se. But of course, that’s an extremely populist angle today (except with speculative traders and the entire infrastructure which supports and depends upon the money markets and foreign exchange for liquidity).
It has been ‘extended’ well beyond any rational development of the original model (which Tobin himself freely underlined as impossible to implement in any meaningful way without wholesale evasion) to apply to pretty much what anyone wants it to apply to.
UK will never implement it. Can’t afford to lose the business. Sarkozy stated that he planned to implement it in France unilaterally as a pre-election gambit, but it’s currently unclear if it’s on plan for legislation. It would be madness for any one country to go it alone; they would simply lose their financial trading base. It is extremely unlikely there will ever be any meaningful consensus which would enable its introduction as basically it would only take one major player against the rest in implementation to effect an implicit competitive advantage at no cost to themselves whatsoever.
