The Robin Hood / Tobin / Financial Transactions tax. We’ve written about it before here at The Standard. Earlier this year 1000 economists wrote to the G20 leaders – here’s an extract from their letter:
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.
One of the very few possible arguments against this tax is that it less effective if it isn’t widely implemented (i.e. by most of the major economies). Fortunately that argument is going to be a lot weaker in future! France and Germany are leading the way, and a Europe wide implementation could be the next step. Naturally the “financial sector” are squealing:
European markets hit by eurozone Robin Hood tax plans
Stock exchange shares and main indices lose ground as German chancellor Angela Merkel and French president Nicolas Sarkozy propose new financial transaction tax
Fears of a Europe-wide financial transactions tax sent tremors through the City and other European bourses after Angela Merkel and Nicolas Sarkozy backed the idea of a new levy.
Shares in banks and other financial institutions were hardest hit in downbeat London trading amid concerns that the tax would add to the cost of doing business and drive firms overseas.
What a pack of whiners these bankers are. They’re being asked to pay a fraction of one percent on each transaction. A tiny amount for any given trade or trader, but because there are so many (the volumes of such trades are so huge) it will raise a substantial sum for cash-strapped governments. Lest we forget, in 2009 governments (we the taxpayer) bailed out these same institutions to the tune of €3 trillion in Europe, £1.5 trillion in the UK, and $4 trillion in America. I’ve lost count of how many more trillions have followed, but some estimates put the totals involved much much higher. And now in return these same institutions are trying to dodge a very fair and much needed tax? Shame on the lot of them.
New Zealand should be a very fast follower indeed on Robin Hood. As Europe moves to implement it, so should we. Labour has shown leadership and courage on the capital gains. They should speak out again on this tax. Use the income for social programmes, green infrastructure projects, or to reduce GST. There is so much that could be done…