Tobin Tax Law and Legal Definition

Tobin tax refers to a tax on foreign exchange transactions. Tobin tax is applied by most of the major countries. Tobin tax was named after the economist James Tobin. It is a type of currency transaction tax. Tobin tax was developed to manage exchange range volatility. They are also a form of sales taxes on currency trades across borders. Tobin tax is important due to its potential to prevent financial crises.