Debate on the tax and critics

Opinions are divided those who applaud that the Tobin tax could protect countries from spillovers of financial crises, and those who claim that the tax would also constrain globalization and dry up world liquidity.

Unexpected, though qualified, support for the Tobin tax has come from the multi-billionaire speculator George Soros, who stated that, while the tax goes against his personal interests, he thinks that its introduction could have positive effects on the world economy. However, he advocates a variation to the Tobin tax: Special Drawing Rights or SDRs that the rich countries would pledge for the purpose of providing international assistance.^[11]

The "City Notebook" column in the British broadsheet The Guardian, August 30, 2001, put the case against such a tax in straightforward terms. It said that currency speculators are "an exceptionally useful lot, working day-in, day-out, risking their own wealth to supply a thing called liquidity. Without liquidity, markets dry up, prices become volatile and goods become difficult to shift." If a Tobin tax were in place, the editorial continued, that useful work would not be as well accomplished. "The net result is that everyone involved — producer, trader, buyer — becomes poorer, not richer", wrote The Guardian.^[12]