Zero Tuomioja and the Tobin Tax

One of the preoccupations of Finland’s foreign minister “Zero” (as Chirac allegedly called him) Tuomioja, has been the implementation of the CTT, or Tobin Tax, especially in relations to ATTAC, where he is a member. Though Tuomioja’s rationale sounds benign enough, there are more considerations behind this folly than initially meets the eye.

Consider whom such a Currency Transaction Tax would affect. Far from dissuading currency speculators (as it was initially intended to do), a CTT is designed to collect taxes from two willing international trading partners and forwarding those tax monies to other countries who have no role at all in that particular trade. Thus, for example, if an American company wires money to a factory in China to produce some goods for America, a country like Bolivia, - which has introduced socialist policies designed to dissuade international trade – would benefit from that kind of international transaction taking place. In other words, Bolivia would enjoy a freeride at the expense of the other two countries, without ever needing to revise its own trade-stifling policies.

Obviously, Zero Tuomioja also enjoys the other aspect of such a tax: it would collect the most money from the one nation that thrives on international trade: the United States. As the cost of such a transaction would eventually be transferred to the American consumer, making goods more expensive as a whole, it becomes quite clear that this tax is just another manifestation of European anti-American bigotry. And, when we consider that it is the American consumer that has done the most when it comes to lifting third world nations out of poverty, the CTT can be seen as quite counterproductive to its poverty-fighting ideals.

In other words, it is folly, though it'll certainly never be comprehended as such by Zero Tuomioja.