In the wake of the financial crisis, commentators have suggested a transaction tax (Tobin tax) on financial markets. The potential consequences of such a tax could be hazardous to the financial markets affected, as well as to the economy. Professor Wang, in a recent Cato paper, reviewed the relevant theoretical and empirical literature and applied these findings to estimate the possible impact of a transaction tax on U.S. futures market activity as well as its utility as a potential source of tax revenue. Wang showed that a transaction tax on futures trading will not only fail to generate the expected revenue, it will likely drive business away from U.S. exchanges and toward untaxed foreign markets. Our panelists will discuss the implications of this paper as well as general issues related to any proposed financial transactions tax.
Featuring the author Betty Medsger; with comments by Julian Sanchez, Research fellow, Cato Institute; moderated by Gene Healy, Vice president, Cato Institute.
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In this issue of the Cato Journal, economists Geoffrey Black, D. Allen Dalton, Samia Islam, and Aaron Batteen offer one prominent example of allowing the market to work. Also in this issue, economists Jason E. Taylor and Jerry L. Taylor reexamine the relationship between marginal tax rates and U.S. growth, and Robert Krol looks at bias in CBO and OMB economic forecasts.
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