1000 economists have written to the G20, about to meet in Washington, and to Bill Gates, asking for a tax on financial transactions known as a Tobin tax after its originator, or a Robin Hood tax as it is known in the US. The full text of the letter is here.
Dear G20 Finance Ministers and Bill Gates,
We write to you as the call for a Financial Transaction Tax is now gathering global momentum, and the French government has made it a key priority for their G20 presidency.
This tax is an idea that has come of age. The financial crisis has shown us the dangers of unregulated finance, and the link between the financial sector and society has been broken. It is time to fix this link and for the financial sector to give something back to society.
Even at very low rates of 0.05% or less, this tax could raise hundreds of billions of dollars annually and calm excessive speculation. The UK already levies a tax on share transactions of 0.5%, or ten times this rate, without unduly impacting on the competitiveness of the City of London.
This money is urgently needed to raise revenue for global and domestic public goods such as health, education and water, and to tackle the challenge of climate change.
Given the automation of payments, this tax is technically feasible. It is morally right.
We call on you to implement the FTT as a matter of urgency.
According to the Guardian, French president Nicolas Sarkozy, who is chairing the G20, has commissioned billionaire philanthropist Bill Gates to examine innovative ways to fund development, and France and Germany are known to be keen on the idea of a financial transaction tax.
The economists’ initiative is supported by a website, www.robinhoodtax.org. It’s worth a look. The banks oppose it, surprise surprise, according to CNN news. It would need international co-ordination to work. It is effectively a GST on financial services – New Zealand’s GST is lauded by our conventional neoliberal economists as comprehensive, even though financial transactions are excluded from it.
Three New Zealanders are among the 1000; Prue Hyman, Stefan Kesting, Peter Conway, and Petrus Simons. Good on them.
[Update, omitted Peter Conway from the list, thanks george.com]