The International Writers Magazine: Money Matters
The Robin Hood Tax
Gemma Roxanne Williams
Turning a crisis for the banks into an opportunity for the world
We are taxed on everything we do- we get paid and we get taxed, we save and we get taxed, we spend and we get taxed, even if we die and have the fortune to leave something to our loved ones… that gets taxed! So amidst the great unhappiness we all feel towards those fat cats who got us into the current financial mess, largely through their own greed, there emerges something which seems just: taxing the rich to help the poor.
Sounds idealistic right? Actually, a small tax (on average 0.05%) on banks’ financial transactions could raise hundreds of billions of pounds to help fight poverty! The Robin Hood Tax campaign is calling on the leaders of the UK’s political parties to support a global tax on the banks to help repair the human damage caused by the global economic crisis, protect public services at home, fight poverty abroad and help foot the bill for climate change. The campaign has been launched by an unprecedented coalition of domestic charities, aid agencies, unions, faith organisations and green groups; it is also backed by financiers and hundreds of economists who have signed a letter in support of the tax.
The tax would not be levied on banks’ transactions with their high street customers, but only to transactions between financial institutions; experts have estimated that even such tiny taxes as 0.05% could eventually raise as much as £250bn ($400bn) a year given the scale of the transactions.
The financial sector was the most profitable industry in the world, five times bigger tan the pharmaceutical industry, yet it isn’t taxed anywhere near as much as other sectors. So since we need money desperately to have any chance of meeting the millennium development goals, it makes sense to find this money in the place with the most to spare, which is currently giving less than it should.
The campaign strives for an internationally agreed tax system but recommends that the UK Government and EU start extending transaction taxes already in existence to encourage other countries to become involved. The suggestion is that proceeds are split with half being spent domestically and the other half being split between poverty reduction and tackling climate change. Given that the UK’s share alone would amount to tens of billions of pounds, actions which seemed impossible would suddenly become feasible such as meeting the Government’s target to halve child poverty (£4bn) or ending the benefit trap which makes it too expensive for people to leave welfare and return to work (£2.7bn).
Gordon Brown, Angela Merkel and Nicolas Sarcozy are amongst some of the international actors backing a transaction tax, and many leading financial figures are in favour of it including Lord Turner (FSA), George Soros and Warren Buffet. It almost goes without saying that the campaign has fairly strong public support already; it is certainly the favoured option for reducing the UK’s deficit given the alternatives of reducing public spending or raising income tax, VAT or corporation tax.
I doubt anyone would say that helping protect public services at home or fighting poverty abroad is a bad idea, because wouldn’t we all like a better world really, if we’re honest? It has just always seemed a fairytale dream to save the world, and an expensive one at that-and that money has always seemed impossible to get hold of. Yet suddenly here we are, with a rare chance to make something good out of a bad situation, to let the rich pay to help the poor.
Follow the Robin Hood Tax campaign on www.robinhoodtax.org.uk
“The crash was made in the finance sector – finance should now make a proper contribution to putting right the damage the crash caused and preventing huge cuts in vital public services” – Brendan Barber (TUC Secretary General)
“We have a once in a generation opportunity to make global finance work in the interests of ordinary people at home and abroad. A tiny tax on banks would make a massive difference to the millions of ordinary people around the globe forced into extreme poverty by the economic crises” Barbara Stocking (Oxfam Chief Executive)