Tobin tax

The Tobin tax is a small levy on financial transactions, specifically currency trades. Its goal is to reduce excessive short-term speculation that can cause market volatility. By making rapid currency trades slightly more costly, it discourages speculative behavior while allowing long-term investments to continue. The tax aims to promote financial stability and generate revenue for public purposes. Originally proposed by economist James Tobin in the 1970s, it is seen as a way to regulate fast-moving financial markets without hindering productive economic activity.