It's only 30 percent. ------------------------------------- http://news.xinhuanet.com/english/business/2012-11/19/c_131985257.htm South Korean lawmakers proposed on Monday to adopt a so-called Tobin tax... A total of 26 legislators, including 24 Democratic United Party lawmakers and 2 minor progressive party members, proposed the bill to introduce the Tobin tax that will levy a low rate in ordinary times on foreign exchange (FX) transactions, while imposing a super-high rate of 10-30 percent under the crisis. The bill defined the crisis situation as volatility of over 3 percent in the dollar/won exchange rate compared with the previous session. Over the past 22 years, the dollar/won exchange rate showed the volatility breaching the 3 percent level only 36 times, meaning that the levy will not be burdensome for FX transactions except for the extreme volatilities in times of market tensions.
Since nobody in their right mind would pay 10%, let alone 30%, what they are in effect saying is they don't want the currency to move more than 3% in a session.
Actually this will drastically increase the extreme volatilities of their currency instead of decreasing it. Less participants in market always lead to more volatility.
How do they intend to levy the tax anyway? Currencies do not have registered owners, unlike say stocks, so unless they state that the Won is no longer freely exchangeable overseas, there is nothing to stop 2 parties in America or Europe from entering into such a transaction. And since currencies are not exchange traded, they wouldn't even know about it. Seems more like a political stunt than a serious proposition.
Sounds more like they are trying to impose de facto price limits in the cash currency market using a punitive FTT. Totally un workable, as the cash market will grind to a halt, while derivatives will continue to trade (overseas where they cant be taxed), causing wild gaps in the cash market at the start of a new session. Will be abandoned eventually if ever implemented.
Moody's Cuts France's Rating From Triple-A - WSJ.com http://online.wsj.com/article/SB10001424127887323353204578129502730718358.html See my Comment
Finland, Estonia part ways on EU budget, financial transaction tax | Yle Uutiset | yle.fi http://yle.fi/uutiset/finland_estonia_part_ways_on_eu_budget_financial_transaction_tax/6382188 Finnish PM came through so far and makes excellent short and sweet points against FTT. He kept Finland out of the Enhanced Cooperation. But, the Finnish FM still favors FTT, so Finland doesn't / can't have an official position on FTT. Does that also mean Finland can't then vote No in QMV? That's the next crucial issue.
Would that be the individual with a masters of education and some experience as a teacher before leaping into a position concerning economics and finance that has an impact on entire nation and no doubt, within a world so interconnected, the globe as a whole? We have so many problems, globally, I know it has been said time and again, and the people who say it are actually those I am now speaking to. The voters, media, regulators, the entire world can not see the problem, the chronic lack of competency in Vital government positions, to the point that those in such roles can kick there boots along without even having a basic education in the field they are trying to govern. Every one likes to feel that they can relate to those they vote for but when a political party as a whole can not even provide someone educated in economics for placement as finance minister, someone with a background in health care for health minister, and so forth, they are not fit to run. Any business run in this disgusting fashion would be bankrupt, yet if you even mention the word business to the average person they promptly stamp there foot and declare running a business is nothing like running a country. Well of course, but its not running on fairy dust. The incompetence of these people, I have no idea how much damage they are capable of causing, it is past the point of comical on so many issues beyond this tax, could it get any worse? Well what next? Perhaps they will stick a community organizer in charge of the most powerful military and one of the most vital economies in the world..oh..wait. ( The above post is a bit of a waste of time, I am sorry, I need to vent it every now and then )