Since the Treasury Department is still very much on the wrong side of the OECD anti-tax competition campaign, don’t get too excited about the headline. But it is still nice to see that Tim Geithner and the rest of the crowd in the Obama Administration are not so hopelessly statist that they are willing to go along with a global tax on financial transactions. The Wall Street Journal opines:
In the department of bad ideas that won’t go away, Exhibit A is a global tax on financial transactions. British Prime Minister Gordon Brown mooted the tax last weekend before the G-20 finance ministers in St. Andrews, Scotland, where he was promptly rebuffed by Treasury Secretary Timothy Geithner. …it’s easy to see why high-tax countries such as France and Germany relish the idea. Tax competition is a bête noire for the Western European countries whose governments eat up close to half of their economies. The U.K. is back in that club after the post-financial-panic recession lopped 6% off its GDP. Scrambling for revenue—and unwilling to hamstring London markets alone—Mr. Brown is suddenly promoting global tax coordination. …Like all tax-harmonization schemes, the Tobin levy is designed to raise taxes above a level that is hard to sustain in a competitive world. This is why its backers have always insisted on a global imposition of the tax. Kudos to Secretary Geithner for offering Mr. Brown a reality check.