The dawn of global tax

Let’s focus on one level of financial reform at a time.

Last Wednesday, the International Monetary Fund called for a special global tax on banks in order to finance future bailouts. The IMF, which oft specializes in the destruction of national economies, has apparently become so deft at the art that it graduated to a global level, with no oneâÄôs vote. The international institution of economic development informed the G20 nations that a refusal of the tax would be âÄúshort-sighted.âÄù U.K. Chancellor of the Exchequer Alistair Darling jumped into the ring with, âÄúThe recognition that banks should make a contribution to the society in which they operate is right âĦ any agreement has to be international.âÄù Has to be, Darling? Banks are supposed to fail; thatâÄôs the point. Then you donâÄôt need to regulate so heavily or bail out too-big-to-fails. But we like security and bailouts. The real question is: why international? One democracy is enough for now, thanks. As is currently underway in Congress, let us deliberate on whether to regulate our own banks or tax them. However righteous and sure a global tax on bank profits and executive salaries may sound, it is twice as deadly morally. Will the banks perceive this safety net as a given and use it as a corporate gambit? Sure. But donâÄôt think critically; donâÄôt be shortsighted. That Japan and Canada opposed the measure speaks volumes. Japan went through a period of banking stagnation for the decade before 2000, while CanadaâÄôs banks avoided the worst of this collapse. Canadian Finance Minister Jim Flaherty criticized the plan, citing moral hazard and fairness. âÄúWe believe that Canadian taxpayers should not bear the costs of bailouts âĦ in other countries.âÄù LetâÄôs stick to one level of financial reform at a time. Congress?