Who proposed the financial transaction tax commonly called the Tobin tax?

Economist James Tobin proposed the financial transaction tax commonly called the Tobin tax.

Tobin presented the idea in 1972, shortly after the collapse of the Bretton Woods system of fixed exchange rates. He suggested placing a small tax on foreign-exchange transactions to discourage short-term speculative currency movements while preserving longer-term international investment.

The proposal was not designed as a broad tax on every financial transaction. Its original focus was the foreign-exchange market, where rapid trading could intensify instability after currencies were allowed to float more freely.

The expression “Tobin tax” is now also used more broadly for proposed taxes on securities or financial transactions. James Tobin received the Nobel Memorial Prize in Economic Sciences in 1981, but the award was for his wider contributions to financial economics, not specifically for the tax proposal.