Implementation of the so-called Robin Hood Tax has taken a step forward as the German finance minister, Wolfgang Schäuble, has included a version of it – the financial transactions tax (FTT) - as part of his budget plan 2012-2015.He suggested that the European Commission has a hesitant attitude towards FTT and urged the Commission to flesh out the details of such a tax.
He rejected the argument that a global agreement (at G20 level) was needed before implementing it.
On March 8, the European Parliament passed a resolution by a vote of 529 to 127 urging the EU to promote the introduction of FTT. It is suggested this would raise around €200 billion per year in the EU and would also discourage speculative trading by making it more costly.
Money raised from the tax could be used to fund health services and education for the less well off in individual European countries as well as to address global issues such as poverty and climate change.
The next step should see the European Commission produce a feasibility study and concrete legislative proposals.
Social Justice Ireland (SJI) urged the Commission to act swiftly, and has welcomed the decision of the European Parliament and the German finance minister.
The justice group stated, “There is growing support worldwide for the introduction of a tax on such speculative exchange transactions. The Tobin tax, proposed by American James Tobin, the Nobel Prize winner in economics in 1981, provides a potential solution. It is a progressive tax, designed to target only those profiting from currency speculation. Therefore, it is neither a tax on citizens, nor on business. Given the recent world economic experience, the tax also has merit in assisting Governments and regulators to continually monitor the risk that financial institutions are taking.”
SJI explained that the recent proposals in the UK for a Robin-Hood Tax represent a further development of these proposals. The rate would be determined by each country enacting the tax, but the range recommended for market calming and revenue-raising outcomes is between 0.1% and 0.25%.
“According to the United Nations, the amount of annual income raised from the tax would be enough to guarantee to every citizen of the world basic access to water, food, shelter, health and education.
Therefore, this tax has the potential to wipe out the worst forms of material poverty throughout the world,” states SJI.
“We believe that the time has come for such a tax, It would simultaneously facilitate, and perhaps fund, the required regulation of financial speculation while providing substantial funds to adequately address the world development issues highlighted in the Millennium Development Goals.”
Oxfam is among supporters of the Robin Hood Tax, and in advance of the EU finance summit this week, it released a survey showing that a majority of people in the UK, Germany, France, Spain and Italy support a Robin Hood Tax.
The survey conducted in six EU countries showed that more than 80 per cent in each country, ranging from 82 per cent in the Netherlands to 90 per cent in Spain, believe banks, hedge funds and other financial institutions have a responsibility to repair the damage caused by the economic crisis they helped to cause.
Oxfam is campaigning that the tax will raise funds to help poor people hit by the economic crisis and to tackle climate change.
“This poll shows that a Robin Hood Tax on banks’ financial transactions could be the most popular tax in Europe’s history. People are sending a clear message to their leaders: banks have not done enough to atone for their sins,” said Elise Ford, Head of Oxfam International’s EU office.
She added that people across Europe clearly believe their governments should make the financial sector pay to help people hit by the economic crisis.
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