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Entries tagged "financial transactions tax"

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Obama: If You Can't Lead Then Get Out of the Way

November 4, 2011 ·

In December 2008, in the eleventh hour of two weeks of intense negotiations over the future of a global climate deal, negotiators sat exhausted and exasperated as the team from the United States moved to block a temporary agreement. Visibly frustrated, the lead negotiator for Papua New Guinea growled at the US, “If you can't lead then get out of the way.” The room exploded in applause, and the US backed down.

President Obama has a choice to make regarding the Robin Hood Tax.Flash forward three years and the United States, now under what was supposed to be a progressive administration, is standing in the way of other countries’ progress again. This time a coalition of the willing in Europe – led by French president Nicolas Sarkozy and German chancellor Angela Merkel – are laying plans to put a tiny tax on financial speculation by big banks and financiers who treat the global economy like their own personal casino.

A financial speculation tax (a.k.a. FST, Robin Hood tax or financial transaction tax) could raise serious money – on the order of $400 billion per year, and groups that are worried about the impacts of climate change think that this is one of the best proposals out there for generating some of the money developing countries desperately need to adapt to a warming world and to build low-carbon economies.

The Obama administration – and in particular Treasury Secretary Timothy Geithner – has staunchly opposed taxing the Wall Street casino at home. But in a serious overreach of power, they’ve threatened to stop any mention of France and Germany’s proposal for the tiny tax in the G-20 Summit underway in Cannes, France.

In response, major US organizations including Oxfam America, Greenpeace USA, 350.org, and Church World Service States sent President Obama and key members of his administration a letter urging the US to, once again, step out of the way of internatinal progress. 

Here's the full text of the letter, and the list of endorsing organizations:

Dear Mr. President,

We write to urge you to signal support for European countries’ proposal for the G20 summit in November 2011 to endorse countries’ use of a financial transaction tax.  It is dismaying that, according to recent reports, your administration has repeatedly objected to European efforts to put such a tax in place, even for themselves.  We believe this obstructionism is deeply misguided.   A negligible levy on the financial sector has shown great potential to address growing inequities in the financial system, and to help prevent financial crises in the future. 

A small tax on the trading of stocks, currencies, derivatives and other financial assets has the power to raise hundreds of billions of dollars a year while discouraging dangerous financial gambling and rapid, high-volume speculative trading.  Funds raised by the tax should be used to strengthen broad-based economic prosperity and human security by creating green jobs, improving livelihoods and global health, and following through on critical climate change finance commitments to developing countries.

The idea of a small fee on the sale of financial transactions is not new. Such taxes have a long track record in many of the world’s leading economies. The United States, for example, had a transfer tax from 1914 to 1966, which levied a 0.20 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help financial recovery and job creation during the Great Depression.

Today the idea is supported by many G20 leaders, including French President Sarkozy and German Chancellor Merkel, and innovative sources of finance remain high on President Sarkozy’s list of priorities for the G20 Summit. The European Commission recently published legislation for a European financial transactions tax. Bill Gates will formally present a report on development finance at the G20 in which he is expected to identify a financial transaction tax as one of the most credible and feasible sources of innovative finance. The IMF has also published papers noting the feasibility of such a tax.

But, Mr. President, while momentum builds in Europe your administration continues to block progress. We were deeply disappointed when reports from last month’s meeting of European Finance Ministers revealed that Secretary Geithner repeatedly discouraged European countries from moving forward with a financial transaction tax – even amongst a “coalition of the willing.”

Public anger is growing over Wall Street bailouts, record corporate executive excess and broken promises to build a clean economy. The “Occupy” movement is proof of that anger. You have an opportunity to stem this frustration by bringing a message of encouragement for a European financial transaction tax to the G20 Summit.

We, the undersigned organizations, call on your Administration to take a bold stand against Wall Street greed and negligence and stand for accountability and economic justice by supporting European leaders’ action on a financial transaction tax at the G20 in Cannes. 

Respectfully yours,

350.org

ActionAid USA

Affording Hope Project

Center for Biological Diversity

Center for Community, Democracy and Ecology

Center for Participatory Research and Development

Center of Concern

Chesapeake Climate Action Network

Church World Service

EcoEquity

FERN

Foreign Policy in Focus

Friends of the Earth U.S.

Grassroots Global Justice Alliance

Greenpeace USA

Holy Cross International Justice Office

International Forum on Globalization

International Rivers

International-Lawyers.org

Jubilee USA Network

KyotoUSA

Maryknoll Office for Global Concerns

Movement Generation: Justice & Ecology Project

Nord-Sud XXI

Oil Change International

Oxfam America

Pacific Environment

Pan Africa Climate Justice Alliance

Stiftung Nord-Süd-Brücken

Sustainable Energy & Economy Network, Institute for Policy Studies

Tax Justice Network USA

United Methodist Church, General Board of Church and Society

Urgewald

Women's Environment and Development Organization


cc: Secretary Timothy F. Geithner, Department of the Treasury; Michael Froman, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs

Gates Backs the Wall Street Tax at the G20 Summit

November 3, 2011 ·

The world's second-richest man and a group of American nurses on the frontlines of the Occupy Wall Street protests came to the G20 summit in Cannes, France this week to advocate for the same thing.

Nurses check up on Bill Nighy after his endorsement of the Robin Hood Tax. Photo by Sarah Anderson.Bill Gates came because French President Nicolas Sarkozy asked him to give G20 leaders recommendations on how to raise funds to meet the needs of the world's poorest. Among Gates's proposals: a small tax on trades of stocks, derivatives, and other financial instruments, also known as a financial transactions tax (FTT), Wall Street speculation tax, or the Robin Hood tax.

According to an advance copy of Gates's report, "FTTs already exist in many countries, where they generate significant revenue, so they are clearly technically feasible. According to the IMF, 15 G20 countries have some form of securities transaction tax. In the seven countries where the IMF estimates revenue, these taxes raise an estimated $15 billion per year."

"It is very plausible that certain kinds of FTTs could work," Gates told the Guardian. "I am lending some credibility to that. This money could be well spent and make a difference."

Gates has a net worth of $59 billion. So forget the 1 percent, he'd be in what, the top 0.001 percent? Meanwhile, representatives of the 99 percent were outside the summit security zone, plugging the same idea.

National Nurses United, the largest union representing U.S. nurses, came to France from the Occupy Wall Street protests across the United States where they have been providing first aid for the encampments. In Cannes, they dressed in their scrubs and joined nurses from Australia, France, Ireland, and Korea. This global group then administered an FTT saline drip to an ailing world economy — represented by a man painted in full body art as the Earth.

"The economic decline is literally making our patients sick," said one of the U.S. nurses. "We see more and more children with conditions related to poor nutrition and stress." The solution, according to the nurses, is a Wall Street tax that could generate the revenues needed to address human needs.

Bill Nighy, an actor famous for his roles in "Love, Actually" and other British films, jumped right into the world economy's hospital bed and posed for photos. "People around the world are dying of illnesses that should have been eliminated hundreds of years ago," Nighy said, noting that a new Wall Street tax could help raise the money required to stop those scourges.

One of his contributions to the campaign for such a tax in the UK was a video that went viral, in which he plays a banker trying to argue against the idea. Ultimately, his character can't find a good reason why not to raise huge amounts of money for the things people need through a tiny tax on financial transactions.

Back inside the summit venue, there's a frenzy of last-minute lobbying going on to try to line up a group of G20 governments to launch a “coalition of the willing on FTT.”  The Obama administration isn't expected to be on the list. 

But RoseAnn DeMoro, National Nurses United's executive director, said, “Nurses don’t give up on people and they won’t give up on this.” The union also spearheaded a rally in Washington, DC today, with more than a thousand nurses and their allies targeting opponents of the Wall Street tax in the Treasury Department and Congress.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies.

Obama Supported Financial Transactions Taxes - Before Summers Nixed It

September 20, 2011 ·

The hot new book in Washington, Ron Suskind’s Confidence Men, shines a bit of new light on the Obama administration’s lack of support for financial transactions taxes. 

Larry Summers wasn't asleep when financial transactions taxes came up.According to the book, based on 700 hours of interviews with high-level staff, President Obama supported the idea of placing a small tax on trades of stocks, derivatives, and other financial instruments. But, as with many other progressive policy proposals, it was blocked by Larry Summers, the former Treasury Secretary who was serving as Obama’s Director of the National Economic Council.

A major theme of the book is how Summers dominated daily morning economic policy meetings with Obama. Former Office of Management and Budget Director Peter Orszag reportedly told Suskind that Summers would often tell the President “I’ll make my argument first; you can go after me.” 

According to Pulitzer Prize-winner Suskind, Obama economic advisors said Summers hijacked a long list of their proposed policies. Here’s what he reports about FTT:  “A financial transactions tax on banks and financial institutions, to try to tame the trading emphasis that has swept those industries and along the way, raise money: Obama said, in one meeting, ‘we are going to do this!’  Summers disagreed; it never materialized.”  (page 365)

The story of Obama supporting the idea of taxing financial speculation is corroborated by off-the-record reports I’ve heard over the past couple of years from civil society leaders and foreign government officials. But it’s chilling to hear such strong confirmation that the idea was derailed by Summers, a man whose credibility should have been in the toilet long before Obama entered the White House. 

The Suskind book reminds us of Summers’s long trail of disasters, from his key role in pushing for reckless financial deregulation during the Clinton administration to his offensive remarks about women during his stormy tenure as president of Harvard University.  My first exposure to the guy was in 1991, when, as World Bank chief economist, he penned a scandalous memo suggesting that dumping toxic waste in developing countries made sense from an economic perspective. 

And yet Summers, renowned for his powers of intimidation, was apparently so forceful in his domination of economic policy matters in the Obama White House that, according to Suskind, it messed with Obama’s confidence. “Over time, some of Obama’s more admirable features, his joy of inquiry, his impulse to reach just a bit beyond his grasp, started to get planed down,” wrote the former Wall Street Journal reporter. “He was making fewer decisions, and almost none where he couldn’t manage to tease some supporting consensus from his senior staff.”

Summers left the administration late in 2010. According to Confidence Men, he was outraged over being passed over for the position as chair of the Federal Reserve. So much so that he submitted a list of demands for compensation, including a round of golf with Obama, to be able to walk with cabinet members into the State of the Union address, and a car and driver. 

However, even with Summers finally out of the picture, Treasury Secretary Geithner has worked to block financial transactions taxes. Recently, he even chastised Europeans for moving towards implementation of such taxes in their own territories, prompting angry words from the Austrian finance minister.

But let’s hope Obama’s recent tough talk on fair taxation signals a new chapter. It’s not too late for the president to revisit some of his earlier positions in support of progressive economic policies, including financial transactions taxes. 

U.S. Nurses Bring Global Call to Tax Speculators to Wall Street

June 22, 2011 ·

Nurses from across the United States rallied on Wall Street today, calling on the financial industry to pay their fair share of the costs of the economic crisis. 

Coming from the frontlines of the suffering, the nurses had some gut-wrenching stories to tell. Sandy Falwell, who has worked in an intensive care neonatal unit for 20-plus years, told one of the most painful: After a woman gave birth to a 2-pound baby, the woman told Falwell that she blamed herself for her baby’s premature birth. During her pregnancy she had been unable to afford insulin treatments for her diabetes — in part because she was taking care of her elderly parents.

Nurses rally for a financial transaction tax. Photo by Marlee Blasenheim.How does the nurses union that spearheaded the rally propose to raise the funds necessary to cover the costs of such urgent needs? National Nurses United Executive Director Rose Ann DeMoro explained:  “There’s a financial transaction fee that we’re going to have Wall Street pay. They have paid it here in the past. It’s very American. These yo-yos who buy and sell and buy and sell our country should have to pay a tax on that.”

The way such taxes work is they place a small fee on each trade of stocks, derivatives, foreign exchange, and other financial instruments, with the goal of raising massive revenues while also discouraging reckless speculation.

As DeMoro mentioned, the United States had a transactions tax from 1914 to 1966, which levied a 0.20 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help financial recovery and job creation during the Great Depression.

The Wall Street rally was part of a global day of action on financial transactions taxes involving more than 35 countries. The actions were timed for the eve of a meeting of leaders of European Union nations, where the debate over such taxes is much further along than in the United States. There are high hopes that Europe will implement them in the near future, which would give a big boost to U.S. advocates.

Here are a few highlights from other countries, where many of the campaigns have taken on a “Robin Hood” theme:

  • In Berlin, Robin Hoods rolled giant Euro coins down the street to Chancellor Angela Merkel’s residence, where someone who looked an awful lot like her (except with a head four times as large as a normal human) received the money as she prepared to depart for the European Council meeting.
  • In Lebanon, the League of Independent Activists did a direct action on the Central Bank, opening a banner in English and Arabic that states: "Big Day for a Tiny Tax," before delivering a statement to government officials.
  • In Brussels, activists met the Belgian Prime Minister Yves Leterme, who assured them that his government will support a Europe-wide transaction tax.
  • In Nepal, activists met their Deputy Prime Minister and Finance Minister and delivered a lobby letter before taking their message to different historical sites in Kathmandu.
  • In Norway, a casino/stock exchange installation was set up alongside a “Robin Hood forest” in the center of Oslo.
  • In New Zealand, activists with 350.org and Oxfam did an action at a shopping mall, resulting in this not-to-be-missed short video of a break-dancing Robin Hood. 

For more on these actions and continued coverage of the global day of action, click here.

Karen Higgins, a co-president of National Nurses United, told the crowd on Wall Street, “Around the world, we’re calling for a more fair and just economy. The finance tax we’re talking about comes from the trillions of trade of stocks and bonds sold here every day. The revenue is badly needed in our communities.”

The nurses union was joined on the street by a long list of other unions and organizations, including the Amalgamated Transit Union, Vocal NY, AFSCME, UNITE HERE Local 100, Community Voices Heard, Transport Workers Union Local 100, United Steam Workers, and PSC-CUNY.

A big theme of the day was that the New York rally was just the beginning of what they're hoping to be a growing movement. Minnesota nurse Jean Ross, clearly angered by the role of the financial industry in creating the current crisis, said, “Wall Street should be happy that we’re just talking about a financial transaction tax. We could be talking about restitution.”

Nurses Join Call to "Tax Wall Street"

June 7, 2011 ·

A swarm of around a thousand nurses in scarlet scrubs descended on the U.S. Chamber of Commerce in downtown Washington today, calling for a new national agenda funded by taxing Wall Street.

Nurses display a banner calling for a tax on Wall Street. Photo by Sarah Anderson

At the door to the Chamber’s headquarters, they were greeted by tuxedoed gentlemen with sashes bearing the names of Wall Street firms. They held out buckets for cash donations (I didn’t see much actual money going in).

The rally, organized by National Nurses United, was part of a series of activities to promote what they are calling a “Main Street Contract” to increase spending on jobs, healthcare, education, and other urgent needs. 

At a press conference on June 6, NNU Executive Director Rose Ann DeMoro explained that they are calling on Congress to enact a tax on financial transactions as a way to pay for the contract. 

Such taxes are designed to generate massive revenue while also discouraging the kind of short-term purely speculative financial activity that serves no social purpose. The way they work is by placing a very small fee (0.25% or less) on each trade of stocks, derivatives, foreign exchange, and other financial instruments.

DeMoro said that NNU members along with other unions and allies plan to demonstrate June 22 on Wall Street as part of an international day of action on financial transactions taxes.

That date was selected because it falls on the eve of a European Council meeting in Brussels. Progress on this issue has been moving fast in Europe and there are high hopes that European countries, at least those in the eurozone, will reach agreement soon to coordinate the adoption of financial transactions taxes. Leaders of Germany and France have been the biggest champions, and there are reports this week that their two governments are coming closer to consensus on the technicalities (instruments covered and at what rates). 

This could put healthy pressure on U.S. policymakers to open their minds to an idea that progressives have been pushing for decades.

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