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Entries tagged "Financial Transaction Tax"
February 12, 2013 · By Janet Redman
Europe has taken a bold leap forward to implement an innovative plan that could help protect people and the planet. Poised to set an example of climate leadership for the developed world, will countries like the United States come along?
At the end of January European Union finance ministers approved a proposal by eleven EU member states to implement a coordinated financial transaction tax (FTT) — a tiny tax on trades of stocks, bonds, and derivatives. Through a process known as “enhanced cooperation,” this subset of EU countries (dubbed the EU11) was able to move forward with a common tax policy without having to include all 27 EU member states. The European Parliament gave the proposal a green light in December 2012, and the EU Council waved it forward at their meeting last month without a vote because of overwhelming support among member states.
EU tax commissioner and FTT proponent Algirdas Šemeta called it "a major milestone.”
The next step in making the FTT proposal a reality is for the eleven member states in the “coalition of the willing” to agree to details of the common tax. Negotiations are expected to wrap up and a formal agreement officially approved by the European Parliament in 2013.
The implications are potentially huge for climate finance. That’s the money that communities in developing countries need to make the transition from climate-vulnerable to climate-resilient, and from dirty energy development to low-carbon development.
The cost of that shift is measured in the hundreds of billions (some say trillions) of dollars. Rich industrialized countries have promised to deliver $100 billion a year by 2020. A fraction of what’s needed, but still a big lift compared to today’s levels of around $10 billion a year (if you count generously).
At the tax rate originally proposed by the EU Commission of a harmonized minimum 0.1 percent for stocks and bonds and 0.01 percent on derivatives, the EU11 FTT has the potential to raise up to €37 billion (nearly $50 billion in US dollars) every year.
France, which implemented a financial transaction tax in August 2012, has already made a commitment to direct 10 percent of the tax revenue to global public goods like development, health, and climate change (3.7 percent is destined for the Green Climate Fund). Members of Germany’s Social Democrat party have made general political murmurs that if they succeed in upcoming elections they will send revenue from an FTT to development to help meet the country’s 0.7 percent ODA goal.
Global campaigners are pushing the EU11 to be ambitious in targeting a significant portion of their FTT revenue to fight climate chaos. Members of the Pan African Climate Justice Alliance used the recent 2012 global climate summit to call for the eleven countries to deposit 25 percent of the money raised into the Green Climate Fund. Representatives in the EU parliament and from developing countries are also calling for FTT revenue to be used by developed countries to meet their mid-term and long-term financing obligations.
With Timothy Geithner stepping down as Secretary of Treasury there’s renewed optimism that the Obama administration might support an FTT under Jack Lew’s leadership of the Department. Supporters of the tax are planning to raise the issue at Lew’s confirmation hearing in Washington DC tomorrow.
This would be a move that experts like Joseph Stiglitz endorse, who said, “as Mr. Obama’s second term begins, we must all face the fact that our country cannot quickly, meaningfully recover without policies that directly address inequality. What’s needed is… a more progressive tax system and a tax on financial speculation.”
An FTT that raises revenue for a fund that supports developing countries in dealing with the disproportionate impacts visited upon them by climate change is an important step in fighting global inequality. Here, the EU11 can be a global leader.
 The 11 EU member states that have entered into enhanced cooperation are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. Any other member state may join the enhanced cooperation if they wish.
June 16, 2011 · By Janet Redman
This week in the German city of Bonn, climate activists turned up the heat on government officials attending the UN climate talks, calling for a tiny tax on financial speculation to help pay for the fight against global warming.
The action in the streets outside the talks, in which youth sporting green Robin Hood caps asked negotiators on their way into the meeting to put money falling from the pockets of high-rolling financiers into the Green Climate Fund, mirrored demands being made inside the summit for a financial transaction tax (FTT), also called a financial speculation tax or Robin Hood Tax. These actions are part of a growing international campaign. In a press conference during the first week of climate talks, Bolivian ambassador Pablo Solon called on countries to adopt an FTT to “generate real funds immediately.” The money is desperately needed in developing countries to adapt to a warming world and for poor-but-growing nations to reduce their own carbon emissions by investing in clean energy.
The UN pegs the price tag for developing country adaptation and greenhouse gas mitigation at around $500 to $600 billion each year in the coming decades. Failure to cut carbon pollution quickly will push costs even higher.
At a press conference in Bonn that brought together labor, youth, environment and development groups from around the world Tetteh Hormeku of the Africa Trade Network called for an FTT, a tax that economists estimate could raise up to $600 billion per annum for the just transition to sustainable economies. “In short,” Hormeku said, “we have to raise the scale of our ambition… of our finances to match the reality of the challenge that we face.”
“We are here today to urge the governments of the world to do the right thing; to impose a financial transactions tax and make the appropriate investments in a greener, cleaner economy,” added Bob Baugh, Chair of the AFL-CIO energy and environment task force and executive director of the AFL-CIO Industrial Union Council. “It is time that the financial institutions, whose reckless actions brought the economic crisis that much of the world is in today, step up and do their part; and make a positive contribution to a cleaner planet and good jobs.”
Meanwhile, the French national assembly passed a resolution supporting a Europe-wide financial transaction tax by a margin of 477 to 2. Statements made by parliamentarians and French president Nicolas Sarkozy called for some of the revenue raised to go to climate change programs.
Sarkozy has promised to make FTTs a centerpiece of the G20 meeting in France in November. On June 15, the Brazilian parliament unanimously adopted a similar resolution calling for the Brazilian government to support a broad-based FTT. In the Bundestag, German lawmakers recently held a debate on the form and function of an FTT, and all of that country’s political parties expressed their support for the idea to the EU tax commissioner.
A global day of action has been called for June 22nd to demonstrate the breadth and depth of global public support for a tax on financial speculation and to build pressure on France, Germany and other European countries to move forward in implementing an FTT. In the United States, National Nurses United and other labor allies will descend on Wall Street demanding high-rolling financiers pay their fair share for the public goods and services that are on the chopping block due to budget short falls.
The Obama administration has not supported a tax on speculation (although several bills have been introduced in Congress), and could do severe damage to the momentum for an FTT in Europe if it sends discouraging signals. Already the U.S. has repeated several times in the Bonn round of climate negotiations that it doesn’t want to talk about innovative sources of climate finance like the FTT.
Climate activists have a message for Obama and his band of merry men at the State and Treasury Departments – If you can’t lead, at least stay out of the way!
November 2, 2010 · By John Cavanagh and Kevin Shih
As we prepare to brace a Republican-controlled House after today’s elections, below are a few thoughts on how IPS is positioning itself in this new political landscape. We’d love to hear what else you all are thinking:
1. We are in for 2 years of stalemate at the national level. This new balance of power in Washington will not allow all much of anything positive to pass, and it won't allow the government to put money into stimulating the economy and creating jobs. So, the economy is likely to remain in stagnation, with high unemployment, and a lot of suffering. With more Republicans in power, the rhetoric of cutting government spending will gain more and more traction, especially in social safety net programs like social security, unemployment insurance and SNAP.
We need to fight for the jobs programs and the safety net programs, and we will be engaged in the battles to ensure the funding of existing safety net programs.
2. In this context of fiscal austerity, there is a big space to talk about what the government should cut. We have two big categories at IPS: the defense/war budgets, and the subsidies to big oil and big corporations. However, as we all know, cuts alone won’t be able to balance our budget. We propose to not only allow the Bush Tax Cuts for the wealthy to expire, but we also strongly encourage politicians to introduce and support new taxes like a progressive estate tax, a financial speculation tax and a currency transaction levy.
3. In this period of stalemate at the national government level, there are big spaces to advance things at the state and local level, where progressives run most big cities, and progressive governments will be in place in many states, like Maryland, California, New York, Maine, Hawaii, and Oregon. We will be pushing for Domestic Workers Bills of Rights in all states, while also working on solutions that will take us closer to a New Economy, like creating state banks in places like Maryland, and encouraging Cleveland’s government to use its procurement powers to support worker-owned coops. We'll be utilizing our inside-outside strategies here, working with both activists and State Senators and city council members.