tobin tax: meaning, definition, pronunciation and examples
C1/C2 (Specialized/Economic)Formal, Technical, Economic, Journalistic
Quick answer
What does “tobin tax” mean?
A proposed small tax on foreign currency transactions, intended to deter speculative trading in currencies.
Audio
Pronunciation
Definition
Meaning and Definition
A proposed small tax on foreign currency transactions, intended to deter speculative trading in currencies.
Any tax on financial transactions, particularly in currency exchange or speculative trading, designed to stabilize markets and/or generate revenue for global public goods. The term has expanded to sometimes refer more broadly to a Financial Transaction Tax (FTT).
Dialectal Variation
British vs American Usage
Differences
No significant lexical difference. In British financial journalism, it may be slightly more frequently discussed in European policy contexts.
Connotations
Similar connotations in both varieties: associated with progressive economics, market regulation, and global governance debates.
Frequency
Low frequency in general discourse, but appears with comparable rarity in specialised economic and political texts in both UK and US English.
Grammar
How to Use “tobin tax” in a Sentence
Propose/Implement/Advocate for + [a/the] Tobin tax + (on transactions)The Tobin tax + would/could/might + verb (e.g., deter, generate, stabilise)Vocabulary
Collocations
Examples
Examples of “tobin tax” in a Sentence
verb
British English
- The report suggests tobining international currency trades at 0.1%.
- Politicians debated whether to tobin financial speculation.
American English
- Economists have proposed Tobin-taxing all forex transactions.
- The plan involves Tobin taxing high-frequency trades.
adverb
British English
- [Not commonly used as an adverb]
American English
- [Not commonly used as an adverb]
adjective
British English
- They discussed Tobin-tax principles at the G20 meeting.
- A Tobin-tax proposal was drafted by the committee.
American English
- The Tobin-tax concept gained traction after the crisis.
- He is a Tobin-tax advocate.
Usage
Meaning in Context
Business
Discussed in financial news and policy circles regarding potential impacts on trading costs and market volatility.
Academic
A subject of study in economics, political science, and international relations journals concerning global governance and market efficiency.
Everyday
Rarely used; might appear in political commentary or social justice discussions.
Technical
Precisely defined in economics as a low-rate ad valorem tax on spot currency conversions.
Vocabulary
Synonyms of “tobin tax”
Strong
Neutral
Weak
Vocabulary
Antonyms of “tobin tax”
Watch out
Common Mistakes When Using “tobin tax”
- Using 'Tobin tax' to refer to any general sales tax. Incorrect capitalisation ('tobin tax'). Treating it as a widely implemented policy rather than a proposal.
FAQ
Frequently Asked Questions
No country has implemented a pure, global Tobin tax as originally conceived. However, some countries have forms of Financial Transaction Taxes (e.g., on stock trades), which are sometimes loosely referred to using the term.
James Tobin (1918-2002) was an American Nobel Prize-winning economist who first proposed the idea in 1972 as a way to reduce exchange rate volatility.
A 'Robin Hood tax' is a broader, more popular term for a Financial Transaction Tax (FTT), often emphasising the use of revenue for social good. A Tobin tax is specifically a very low-rate tax on currency spot transactions to curb speculation.
Proponents argue it stabilises markets and funds global public goods. Opponents claim it would reduce market liquidity, be bypassed by moving trades to untaxed areas, and ultimately harm economic growth.
A proposed small tax on foreign currency transactions, intended to deter speculative trading in currencies.
Tobin tax is usually formal, technical, economic, journalistic in register.
Tobin tax: in British English it is pronounced /ˌtəʊ.bɪn ˈtæks/, and in American English it is pronounced /ˌtoʊ.bɪn ˈtæks/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “[Not applicable for this technical term]”
Learning
Memory Aids
Mnemonic
Think: TO Bin speculation – the tax aims to throw speculative currency trading 'in the bin' to reduce harmful volatility.
Conceptual Metaphor
A SPEED BUMP or SAND IN THE GEARS for international financial markets (to slow down harmful, rapid speculation).
Practice
Quiz
What is the primary stated purpose of a Tobin tax?