Thursday, February 11, 2010

New "Robin Hood" tax proposed

A campaign is being launched in the UK to support a proposed "Robin Hood" tax. The tax would collect a 0.05 percent tax from international bank transactions. The campaign hopes to drum up support for the tax with a few TV commercials that are running in the UK

From The London Evening Standard, writer Chris Blackhurst gives this further explanation for the proposed tax.

Today we have our own real-life Robin Hood in Richard Curtis, the comedy writer. Among his Merry Men are Bill Nighy and other celebrities including Bono, and representatives from a range of organisations — Oxfam, Save the Children, Action Aid and others.

Curtis's proposal, launched this week, is to impose a 0.05 per cent tax on international bankers' transactions. He's calling it the “Robin Hood” tax. Diverting 50p from every £1,000 the banks trade in shares, bonds, derivatives and foreign currency could raise up to £250 billion per year. The money would be spent on under-resourced public services in the UK and other countries where the banks do business, and to help fight global poverty and climate change.

It's smart: the size of the levy is not such that the banks would be mortally wounded. And as Curtis points out, we pay VAT at 17.5 per cent every time we go to the shops: why shouldn't the banks pay 0.05 per cent every time they buy or sell a financial product?

It's cleverly designed: half the revenue would be kept by the country where the deal took place, and the remaining 50 per cent split between reducing global poverty and tackling climate change. For leaders of developed nations struggling under public deficits, those sorts of sums for their own country's public services would be a godsend. It's hard, too, to argue against serious cash going to Africa and elsewhere, and alleviating climate change (£60 million-plus going to poorer nations to reduce their emissions would be enough to free the deadlock of the recent Copenhagen summit).

It would be a brave politician who would denounce the Robin Hood tax now. For Curtis's cunning is also in the timing: he's linking banks' unpopularity with the biggest challenges facing the planet. Come to that, which banker is going to put their head above the parapet and say their organisation, having made billions, can't afford a measly 0.05 per cent?

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