The tax would be a bureaucratic nightmare to implement. It is unclear whether a Tobin Tax should be collected by central banks, the UN itself, the IMF or even quotation agencies. The proper use of the tax would require a level of co-operation between monetary and fiscal authorities that does not exist in reality. It is doubtful that monetary authorities would have the ability and independence to administer such a tax wisely. While the tax would originally be set at 0.01%, it could be raised at any time. Tobin proposed that the tax would be able to manage speculative attacks on a particular currency by increasing or decreasing the tax in response to global conditions. Enforceability, then, depends upon speculation about what level the tax will be at in any given time period. Raising the Tobin Tax to high levels would also be self-defeating, as the financial world could easily evade it through complex financial instruments that bet on currency movements without actually buying or selling currency itself. Such trading would be impossible to monitor or sanction.

Given that the Tax, if implemented, will most likely have to be enforced by each country individually, with funds later to be transferred to the UN, there is little chance that the process would be apolitical. The countries who would contribute most would be the countries with the strongest currencies (Japan, EU, USA, Canada) and so their political interests would factor. As the UN has been ridden with corruption charges in the past few years, countries may express reservations to donating the money to the UN. It would be too unpopular to create a new supra-national organisation to monitor the Tobin Tax, as national governments simply don’t want more independent international organisations. It would be a huge challenge to persuade rich economies to accept the loss of influence that would occur once these organisations gained a more independent income. The idea that revenues could fund the United Nations, for instance, has received an icy reception from the US. Sheer self-interest apart, there is an issue of democratic accountability at stake here, as independent international organisations are not subject to the same democratic control and scrutiny as most of the governments which would lose influence as a result of this proposal.

The Tobin Tax would need to be introduced globally and at the same rate, or transactions would move offshore to tax-free or lower tax jurisdictions, as happened with the eurobond market in the 1980s. Unless a world-wide uniform tax is imposed on all instruments for transacting in foreign currency, the tax will be largely ineffective. A global tax could potentially be a solution to larger global concerns, such as the environment or humanitarian crises, but the Tobin tax would place the burden mainly on important currencies as opposed to all world countries. Countries which refuse to make their currencies fully convertible would be able to opt out of the tax. A fair global tax would need to be more neutral in purpose, have fewer strings attached, and include everyone’s participation based on each country’s GDP and potential for development. Tax on foreign exchange dealings could easily be evaded by shifting activity offshore or by using derivatives and other financial instruments to disguise trades in foreign exchange.