ABSTRACT
A Tobin tax is similar in its impact on currency speculators as the goods and services tax (GST) is to individuals. In the year 2000, Australia introduced a GST on the expenditure of individuals in an attempt to combat the erosion of the income tax base in Australia by the use of tax avoidance and tax evasion by individual taxpayers. Financial stability is a state of affairs which is conducive to the public's welfare' therefore financial stability is a property of a nation state'. The Tobin tax is the only well-regarded proposal, gaining international credibility, which would control currency speculation. Economists at the Federal Reserve Bank of St. Louis defined a currency crisis as a speculative attack on a country's currency that can result in a forced devaluation and possible debt default'. In order to tax currency trading, nations begin to work beyond their national institutions and national authority in the same way the currency traders operate beyond national boundaries.
