Tobin tax

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Tobin Tax

A proposed tax on foreign exchange transactions. The tax is intended to reduce excessive speculation on currencies by making it more expensive. First proposed after the collapse of the Bretton Woods system, the Tobin tax is often re-proposed after major currency crises because speculation can cause unsustainable rises and crashes in foreign exchange rates.

Tobin tax

a proposed international TAX on all transactions in the FOREIGN EXCHANGE MARKET. Tobin, who advocated this tax, argued that it would discourage destabilizing speculation and make foreign exchange markets less volatile. See SPECULATOR.