ON SEPTEMBER 2nd Italy became the first country in the world to extend its financial-transaction tax to high-frequency share trading. The Italian government hopes the tax will stabilise markets, reduce financial speculation and raise revenue for the government, as do ten other Eurozone countries considering similar policies. Such levies have been dubbed “Tobin taxes” after James Tobin (pictured), a Nobel Laureate in economics, who in 1972 first suggested taxing financial transactions. But do Tobin taxes actually work?
