Quote from listedguru: [it] doesn't mean that Japan is actually for the tax.
So Tobin is now
big in Japan, ey? Notice how their viral anti-capitalist campaign travels further and further east... I suspect that some atoll in French Polinesia would be their final destination.
But Japan has already withdrawn from similar measures, i.e. brokerage commission controls. Before 1994, "brokerages charged clients fixed rates set by exchanges, which varied according to the size of the transaction, starting at 1.150% for trades under 1 million yen and declining with trade size to 0.075% for trades exceeding 1 billion yen" (see Liu and Zhu 2009). The reasons cited by the authors are interesting for modern Japanese Tobin followers:
1) the desire to maintain competitive position internationally ("commission rates in the U.S. and U.K., two major competitors, were fully deregulated in 1975 and 1986, respectively"),
2) the desire to boost internal competition (within the brokerage industry) and eliminate various methods of "Tobin tax evasion" ("fixed commission rates discouraged price competition in the securities industry and led some big Japanese brokerages to compete by improper business practices such as compensating institutional investors for their investment losses.3 Deregulation of commissions should help intensify competition in the securities industry and increase transparency of securities trading."
And all that anti-tax argumentation from the only empirical pro-tax paper in existence. I cited it together with Schulmeister, because nothing convinces stronger than your own side's admission of failure ("This finding contrasts with the previous evidence that implies a positive relation between transaction costs and price volatility")
And Tobin (1978) did want to tax international trade as well (not merely speculative currency exchanges, as his desciples would have you believe): "It would have to apply, I think, to all payments in one currency for goods, services, and real assets sold by a resident of another currency area. I donât intend to add even a small barrier to trade. But I see offhand no other way to prevent
financial transactions disguised as trade"
So when it comes to such a general FTT tax, Japan's role would bear strong resemblance to Germany's role in the EMU, i.e. a
net payer... I mean it is hilarious that the strongest calls for the "sand in the wheels" tax should come from small island economies which are by definition most dependent on international trade (both due to scarcity of natural resources and home populations being too small for producers relying on economies of scale). And Japan in particular has the most to lose from such trade frictions, because it imports all its raw materials, exports all its industrial output, lends out all its currency to carry traders, and purchases foreign bonds for all its official reserves
