Effective Currency Transactions Taxes: The Need to Tax Derivatives
Publication Date: July 2001
Publisher(s): Center for Economic and Policy Research
Author(s): Dean Baker
Keywords: Tobin taxes; Trade volume; Foreign exchange
Coverage: United States
This paper shows that any Currency Transactions Taxes (CTT) will be readily evaded by speculators acting in secondary markets, and that trading in secondary markets can easily move the spot market. It argues that to be effective, any CTT will have to be applied to a wide range of financial instruments.