A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.
- CEO Pay
- robin hood tax
- un climate summit
- food stamps
- federal election commission
- global warming
- climate change
- Extreme Inequality
- climate justice
- Corporate Sponsorshop
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
Baltimore Nonviolence Center
Barbara's Blog, by Barbara Ehrenreich
Blog This Rock
Busboys and Poets Blog
CODEPINK's Pink Tank
Demos blog: Ideas|Action
Dollars and Sense blog
Economic Policy Institute
Editor's Cut: The Nation Blog
FOE International blog
Kevin Drum (Mother Jones)
The New America Media blogs
Political Animal/Washington Monthly
Southern Poverty Law Center
US Campaign to End the Israeli Occupation
Entries tagged "financial transactions tax"Page Previous 1 • 2 • 3 • 4 • 5 • 6 Next
April 5, 2012 · By Sarah Anderson
The conservative presidential candidate has decided he can't win unless he raises taxes on the financial sector. No, I'm not talking about Mitt Romney, but this isn't a belated April fool's joke either.
French President Nicolas Sarkozy has rushed through Parliament a new tax on securities trades, hoping it will give him a boost in what is expected to be a close election against Socialist Party candidate François Hollande on April 22. The French government will start collecting revenue from the 0.1 percent tax on stock trades in August.
This is the first clear win in a two-year campaign by labor unions, environmentalists, global health and other groups for taxes on financial speculation. The ultimate goal is to have broad-based taxes on trades of all financial instruments, including stocks, derivatives, and currency, in all of the world's major financial markets. Sarkozy described his new French tax, which applies only to stock trades, as a first step towards a more comprehensive levy at the European level.
Such taxes have garnered widespread popular support because they could generate massive revenue while discouraging short-term speculation that has no real social value and can undermine market stability. Hardest hit would be the computer-driven high frequency trading that makes up about 55 percent of all trading on U.S. stock markets. Such warp speed robot trading played a role in the May 2010 "flash crash" and there are growing concerns that it could cause the next "Big One." Since these guys make money through razor-thin profit margins on zillions of trades, a transaction tax of even a small fraction of a percent could throw a major wrench in their business model. For ordinary investors, the costs would be negligible.
European State of Play
Beyond France, the European debate on financial transactions taxes has moved forward in fits and starts. In a major reversal of their earlier opposition, the European Commission introduced draft legislation last fall for a tax of 0.1 percent on shares and 0.01 percent on derivatives. But momentum behind the proposal has slowed as Germany, a key supporter, has had its hands full with another not so small matter -- the euro debt crisis. As it has sought to win over other key economies to its position on that front, Germany has tried to lower the tension level with opponents of the transaction tax by floating various compromise ideas. But the most vocal opponent, Prime Minister David Cameron, whose party receives more than half of its donations from the financial sector, has shot them all down. John Major, a previous prime minister from Cameron's party, went so far as to conjure up painful World War II memories by comparing the proposed tax to a "heat-seeking missile" aimed at the City of London (the UK's Wall Street).
Nevertheless, Max Lawson of Oxfam GB says that "despite fierce opposition and lobbying by the financial sector, there is a good chance that a coalition of European countries could push ahead and implement a financial transaction tax in 2012." He points out that nine countries representing 90 percent of Eurozone GDP recently wrote to the Danish EU Presidency to ask them to fast-track the debate on the European Commission draft legislation. A minimum of nine countries is needed for an "enhanced cooperation" agreement -- EU-speak for a pact that involves less than the full 27 member countries.
This week Germany's main opposition party, the Social Democrats, increased the odds of a breakthrough by announcing they would block a new EU "fiscal pact" to contain the debt crisis unless the ruling party moved forward on a coordinated European financial transactions tax. They have the votes to back up the threat.
U.S. State of Play
The Obama administration shifted to a neutral stance on the European proposal last fall but they have not yet expressed support for taxing speculation here in the land of Wall Street. There is, however, growing support for the general concept in the halls of Congress, thanks in part to a big educational push coordinated by Americans for Financial Reform. Last week, the 76-member Congressional Progressive Caucus released a budget proposal that includes a tax on trades of stocks, derivatives, credit default swaps, foreign exchange, and other exotic financial products that could generate an estimated $378 billion over the period 2013-2017. A summary of the bill explains that "this is a tax levied directly against the types of opaque, complex trades that Wall Street manipulators used to inflate their profits and were a direct cause of the financial crisis."
On May 18, National Nurses United will spearhead a major demonstration in Chicago to call on President Obama to tax Wall Street. Scheduled to coincide with a G8 summit hosted by Obama, the event will kick off campaigning events and activity around the world as part of a global week of action for financial transactions taxes. The AFL-CIO and other labor, environmental, and health groups have endorsed the Chicago rally.
The G8 summit offers an opportunity to shine a global spotlight on President Obama during a key moment of the election campaign. Perhaps he will be inspired by the conservative European leaders who have shown more nerve in taking on the mighty financial sector.
December 2, 2011 · By John Cavanagh
Last week, we sent our supporters the Institute's new America Is Not Broke report, which explains how the nation could raise more than $800 billion dollars annually through a tax on Wall Street and other popular measures. My IPS colleagues Sarah Anderson and Janet Redman have spent years helping to build a coordinated campaign in the United States, Europe, and other countries to back a "financial transactions tax."
This week, Janet is in Durban, South Africa, where she's rallying other groups at the global climate talks to support this tax to help fund poor countries making the leap into a clean energy future. In the dispatches Janet is writing from South Africa, she reports that the UN estimates it will cost poorer nations close to $1 trillion annually to address climate change in the coming years. A significant share of this could come from a financial transactions tax.
Janet has pulled together a rainbow of global groups to do an action, press conference, and sign-on letter to South African President Jacob Zuma to support this Robin Hood effort. Sarah reports that it is likely that Europe will adopt this tax next year.
IPS is committed to bringing the momentum in Europe and elsewhere into the U.S. debate in the coming months, and turning this Occupy moment into a time of real change. In the face of growing pressure, the Obama administration has dropped its active opposition to new taxes on financial transactions. The door is now open for a win that both reins in the Wall Street casino and raises substantial funds for vital issues like climate.
The Institute is also releasing a Main Street jobs agenda report this week with YES! Magazine and our other allies in the New Economy Working Group. In this report, we explain how to create millions of jobs by shifting the locus of our economy from the Wall Street to a vibrant, green Main Street economy.
November 29, 2011 · By Janet Redman
A major flashpoint at the UN Climate summit in Durban is how nations in the global north should deliver the money that they're supposed to give countries in the global south to support efforts to deal with climate change.
It's not chump change. The UN Department of Economic and Social Affairs says it will cost developing countries upwards of $1 trillion every year to address climate change in the coming years.
Many negotiators want the UN to open the doors of the Green Climate Fund created at last year's summit in Cancun. They're also debating the scale and sources of long-term finance. The U.S. government is blocking both conversations.
Instead, Washington wants the private sector to take a leading role, and for tricks like carbon trading to leverage public money by raising big bucks in the financial market. This might sound good, but it would just add another roulette wheel to the casino economy that plunged the world into the worst recession since the 1930s.
Therefore, civil society groups and developing–country governments have demanded that the Green Climate Fund not serve as yet another game room for financial speculators to gamble with public dollars. A growing movement for innovative sources of climate finance — including a tiny tax on financial transactions — has shown that money is available for global public goods like climate change programs.
Now we just have to mobilize the political will of rich countries to share the wealth. With European countries adopting austerity measures, and a U.S. Congress that barely believes that the climate is changing, that'll be an uphill, but necessary, struggle.
Will the next two weeks of climate negotiations unleash a violent storm that makes our planet uninhabitable? Or can governments come together to keep our future safe?
As the second day of climate talks are winding down, storm clouds are building again.
Janet Redman, co-director of the Sustainable Energy & Economy Network at the Institute for Policy Studies, is observing the United Nations climate talks in Durban, South Africa. www.ips-dc.org
Join the global call for climate justice by participating in 1,000 Durbans in conjunction with the December 3rd Day of Action on Climate Justice.
November 23, 2011 · By Robin Broad and John Cavanagh
Shift your gaze for a moment from the lurid headlines of police shutting down Occupy sites in Oakland, New York and other cities to the scene on a sunny day in early November here in Washington, D.C. In front of the grandiose U.S. Treasury Department building, thousands of nurses dressed in red shirts gathered holding high large signs proclaiming: “Heal America: Tax Wall Street” and “Tax Timmy’s Friends” (as in U.S. Treasury Secretary Tim Geithner). They and their allies next marched to the Bank of America, then to the Occupy D.C. site, and onward to the corridors of Congress. Their rallying cry: a tax on the speculative trades that dominate Wall Street.
These nurses are one of many reminders of how far we have come since Occupy Wall Street pitched its first tents in Zucotti Park on September 17 and of how much the national conversation has shifted. They remind us how significant have been the successes of the Occupy movement, whatever happens to those tents.
Occupy has already succeeded in challenging the old, faulty dominant story spread by the 1 percent and replacing it with another one that resonates with what most Americans know to be true.
For the thirty years until September 17, the dominant national narrative was framed by the overarching philosophy of free-marketers like Ronald Reagan, Margaret Thatcher, and Milton Friedman. Starting around 1980, they successfully sold a story-line that government should step aside, eliminate regulations, and let the “free market” and its large corporations create prosperity for all of us. As for the resulting rise in inequality? Not to worry, their storyline argued, this was not a problem because everyone had a chance to get rich and anyone who did not – well, that was their own fault.
Across the world, for years, millions of people challenged this elite-driven and elite-benefiting “Washington Consensus.” In Brazil, for example, landless workers occupied farmland and ultimately helped elect a government of the 99 percent. Similar movements helped elect governments that challenged the 1 percent in Bolivia, Uruguay, Ecuador, El Salvador, Venezuela, and elsewhere.
But, in the United States, the dominant story persisted for decades, drowning out the voices of victims and critics — leaving us with a callous national narrative that tolerated obscene wealth among the few, mounting poverty among the many, and an escalating gap between the two.
Tolerated, that is, until Occupy Wall Street.
The signs and chants of “we are the 99%” have broken the spell, liberating the public imagination to unearth the true narrative of what has happened in this country and across the world during the past three decades.
Pay no heed to what the self-serving mainstream pundits of the 1 percent say about the Occupy movement. The reality is this: Occupy has already succeeded. It has succeeded in shaking us as a society out of our hypnosis. Occupy has already succeeded in its role as a social movement in challenging the old, faulty dominant story spread by the 1 percent and replacing it with another one that resonates with what most Americans know to be true.
The truth: The policies and practices of giant corporations and the U.S. government over the past three decades have rigged the system to benefit the 1 percent. The truth: The resulting inequality has grown to grotesque levels not seen since the first “Gilded Age” 100 years ago. Inequality is crushing millions, while destroying our democracy.
Ignore also what the pundits of the 1 percent are telling you about who is at Occupy. The Occupy sites are not filled with partying spoiled rich college kids. There are ordinary people, some who have lost jobs, some who have lost homes, some who cannot find jobs, most who had lost hope. People who are tired of being blamed, tired of feeling alone, and tired of not being heard.
Now, they are being heard and they are not feeling alone.
In choosing Wall Street as its main initial site, Occupy brilliantly changed the narrative to focus on the real villain: a Wall Street that gambled the hard-earned savings of ordinary Americans and precipitated the crash of 2008. A Wall Street that was then bailed out by the 1 percent in the U.S. Congress.
Pay no heed to those pundits who say that Occupy will fail unless it puts forward a specific list of specific demands. This is not the role of a social movement such as Occupy. Rather, if Occupy can keep the spotlight on this new narrative, this gives space, power, and voice to other groups to put forward specific demands on behalf of the 99 percent. Case in point: those nurses who marched with other Occupy supporters on that sunny day in early November to demand the tax on financial transactions of the 1 percent.
Indeed, as the nurses rallied in Washington, three of their leaders joined in a demonstration thousands of miles away in France, pressing leaders of the world’s 20 largest economies including President Obama to embrace this tax. Obama had previously been opposed. But, as IPS fellow Sarah Anderson reported from France: “After the protests, Obama stood up in France at a news conference with the French President Nicolas Sarkozy. And, to our surprise, Obama announced that he was now open to the financial speculation tax.”
In sum: Occupy is successfully shifting the national conversation and, in doing so, it is opening the door to a new realm of possibilities.
November 4, 2011 · By Sarah Anderson
Talk about piling on. Bill Gates, the Pope, Michael Moore, the Archbishop of Canterbury, 1,000 parliamentarians, 1,000 economists, the world's major labor leaders, Occupy Wall Street protesters, Oxfam and other major development groups, thousands of nurses, the World Wildlife Fund and other major enviros…It might be easier to list who didn't come out didn't come out in support of a Wall Street tax in the lead-up to this week's G20 summit in Cannes.
The outcome? No home run, but some measurable steps forward.
No one expected a G20-wide agreement on taxing financial transactions at this summit. Despite rising support, opposition from the United Kingdom, Canada, and the United States, among others, is still just too strong. But there were high hopes that a subset of European and non-European G20 countries would launch a "coalition of the willing" in support of the tax.
This goal was achieved. In his concluding press conference, summit host French President Nicolas Sarkozy announced that South Africa, Brazil, and Argentina were joining the list of current supporters, including France, Germany, Spain, the European Commission, and several other European governments. Sarkozy said he hopes to move towards implementation in early 2012.
Sarkozy and German Chancellor Angela Merkel have been the strongest supporters of taxing financial transactions for nearly two years. A few months ago, the European Commission also reversed its earlier opposition and released proposed legislation for such a tax in the European Union. But while Europe appears likely to move forward, the addition of several emerging market countries to the supporter list is significant for several reasons:
- The increased revenue that can be generated.
- The reduced potential for tax avoidance.
- The enhanced chances that revenue won't just be plowed into European bank bailouts, but instead spent on human needs in both the global North and South.
- The strengthened legitimacy through the backing of rising powers in the Global South.
For U.S. advocates, there was another modest victory. Over the past two years, Treasury Secretary Timothy Geithner has made no secret of his aversion to the tax. In September, Geithner angered some of his European counterparts by objecting to proposals to raise funds to address their deficit problems through an EU-wide tax on financial transactions.
In Cannes, the Obama position shifted from active blocking to friendly neutrality.
"The president made clear that he shares the objectives that Chancellor Merkel and President Sarkozy have in ensuring that the financial sector contributes an appropriate share to the resolution of crises," said Michael Froman, the White House's G20 point person. "I think there is broad consensus between the Europeans that the president met with this morning and ourselves about the ability of each to pursue this in their own way, whatever way they see to be most effective."
The final communiqué of the G20 leaders was a disappointment, however.
The only relevant line in it is a typical diplomatic non-statement: "We acknowledge the initiatives in some of our countries to tax the financial sector for various purposes including a financial transaction tax inter alia to support development."
But with the likelihood of a critical mass of countries coordinating taxes on financial speculation, this kind of mumbo jumbo may disappear in the coming years. Once other governments start generating massive revenues by taxing speculation, even the most closed-minded economic advisers in this country may see the issue anew.
Sarah Anderson directs the Global Economy Project at the .