Here is a good column slating the idea of a Tobin Tax. The key issue that people need to understand is the issue of tax incidence. To put it another way, taxes are a cost (indeed, for some things, such as taxes on tobacco, policymakers stress this point). Costs get passed on. If we tax financial transactions, it will be passed on in the form of lower profits, job cuts, lower savings rates, higher borrowing costs. The tax, of course, will weigh disproportionately on London, given the far smaller turnover of rival European centres such as Paris.
As the saying goes, can we leave yet?