There is an alternative: the Robin Hood Tax

8 Jul

– by Imogen Davies

In the face of one of the worst financial crises of our generation, we are constantly told that cutting back is the only way to keep the economy afloat.  But there is an innovative source of finance which has so far remained untapped: the Robin Hood Tax, or Financial Transaction Tax.

A Financial Transaction Tax, or FTT, is a tiny tax of about 0.05% on transactions like stocks, bonds, foreign currency and derivatives which could generate a whopping $400bn (£250bn) globally each year. They are well-tested, cheap to implement and hard to avoid, and because they are targeted at casino banking operations, they can easily be designed in a way that protects the investments of ordinary people and businesses. They could also help reduce the volume of risky transactions which helped trigger the financial crisis.

Most importantly, the money raised could help those most in need and worst affected by the financial crisis. We are calling for a Robin Hood Tax in the UK of £20bn a year to fight poverty and climate change at home and abroad. This won’t solve all our financial woes – but it could provide a serious chunk of what is missing.

A few years ago even the suggestion of such a tax on the financial sector would have been unimaginable. Since the financial crisis and growing public anger against the banks, the world is now a very different place. Significant progress has been made, with governments across the world getting behind this good idea.

As a priority of France’s G20 presidency, President Nicolas Sarkozy has called for a coalition of willing nations to implement an FTT.  The German government is also supportive, as are those in Spain, Finland, Austria, Belgium, Luxembourg, Greece and Portugal. Most recently, the European Commission has proposed an FTT to raise funds for the EU budget. Fortunately, it is unlikely any EU country would agree to use the money for this purpose, but the proposal does show that an FTT is feasible at European level. It is likely that the EU could move ahead with a tax on the financial sector, with other willing countries joining in at the G20 summit in November.

But big risks remain: there might be no agreement or else a tax that directs nothing to poverty, development or climate change.

Successfully securing a Robin Hood Tax will need even more active campaigning across the world in the next six months to keep the pressure up. You can help by spreading the word among family and friends, checking out our website, sharing our videos, following us on Twitter and joining our Facebook group to find out about the latest campaigns and actions. You could also send an email to your MP telling them why you think a Robin Hood Tax is important.

The political door is ajar; this is a campaign waiting to be won.

Imogen Davies is Communications Coordinator for the Robin Hood Tax campaign





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