Good Taxes: The Case for Taxing Foreign Currency Exchange and Other Financial Transactions

David Robinson, an economics professor, is dean of the Faculty of Social
Sciences at Laurentian University.

It is tempting to see international currency speculators as a herd
racing back and forth in a lifeboat. They claim they are keeping the
lifeboat steady. Everybody else can see that they are an undisciplined
and self-indulgent mob endangering the rest of the passengers. This book
is about a tax designed to slow them down.

The stated aim of the book is to make the case for an international tax
on foreign currency transactions. This so-called Tobin tax, which is not
popular among bankers and speculators, has been well received in most
quarters and has many supporters. Michalos lines up 19 separate reasons
for supporting the idea and 20 reasons for opposing it.

Those favoring the Tobin tax say it would (i) give governments more
control of their own monetary policy, (ii) generate substantial
revenues, (iii) stabilize national currencies, (iv) shift some funds
from speculation to real investment, (v) tax the rich, and (vi) be
popular with the masses. Those opposing it contradict these points and
argue that the Tobin tax is politically and technically infeasible.
Michalos does a good job of showing that on balance the Tobin tax will
have a positive effect and that the barriers are, in fact, political,
not technical.

Good Taxes is clearly written and fairly well organized, and its list
of sources is valuable in itself. However, it is not an easy book to
use. Arguments for and against are presented in

numbered paragraphs, but the numbering is hard to see and there are no
headings. And further, the entire first chapter is unnecessary.