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Entries tagged "robin hood tax"

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Celebrities, European Leaders Push for Final Deal on Wall Street Tax

February 19, 2014 ·

Robin Tax VideoIf you love Harry Potter, zombies, European art house films, or thumbing your nose at the big banks, you’ll love the new video promoting a Wall Street tax.

This is the first time, in my recollection, that major celebrities have ever showed a united front against the mighty financial industry lobby. The director is David Yates, who made the last four Harry Potter movies. Andrew Lincoln, the star of the hit zombie series “The Walking Dead,” and Bill Nighy, of “The Best Exotic Marigold Hotel” and “Love, Actually,” are among the actors.

Wall Street lobbyists will hate the film because it portrays a newscast 10 years from now in which a panel of bankers rave about the multitudinous benefits their countries have enjoyed as a result of a small tax on trades of stock and derivatives. The only panelist who’s decidedly not over the moon is Nighy, who plays a banker from the UK, which did not adopt the tax.

The viral video is one more setback for the financial industry lobbyists who have been madly trying to block progress on such taxes. In Europe, they seem to be losing the battle.

At a February 19 press conference in Paris, German Chancellor Angela Merkel and French President Hollande confirmed that a coalition of 11 EU governments are on track to finalize a coordinated financial transaction tax before May. European elections are that month, and this is considered a sure vote-getter. The latest Euro-barometer survey shows 82 percent of German and 72 percent of French citizens support it.

There have been hints, however, that the tax could be a watered-down version of the initial European Commission proposal. That original plan would place a tax of 0.1 percent on stock and bond trades and 0.01 percent on derivatives. Expected revenues: 31 billion euros ($US 42 billion) per year.

In a recent speech, EU Tax Commissioner Algirdas Šemeta indicated that negotiators are considering a graduated approach as a compromise. In the first phase, the tax would apply only to stock trades. In subsequent phases, it would be expanded to cover other instruments, including derivatives and possibly foreign exchange spot transactions.

German activist Peter Wahl feels this would be a bit of a setback but not the end of the world. “We could live with a two-step approach as a compromise under the condition that there is a binding timetable for the second step and that derivatives are included in the end,” he said.

Wahl, an analyst with the German group WEED, is one of the leaders of a diverse international campaign made up of labor, global health, climate, and other groups that has driven the financial transaction tax (aka Robin Hood Tax) from the fringe to the center of global debates.

At her joint press conference with Hollande, Merkel predicted that “the minute things start to move forward other countries may be less reluctant and it could be expanded.”

European progress is likely to change the dynamic in the United States as well. The Obama administration is not yet supportive, but there is growing support in the U.S. Congress.

Sen. Tom Harkin and Rep. Peter DeFazio have proposed a 0.03 percent tax on stock, bond and derivative trades, with a tax credit offset for contributions to qualified tax-favored accounts, such as 401(k) retirement funds. Rep. Keith Ellison has introduced the Inclusive Prosperity Act, which proposes tax rates of 0.5 percent on stock, 0.1 percent on bond, and 0.005 percent on derivative trades, with an offset for taxpayers who make less than $50,000 per year.

The Joint Committee on Taxation estimates the Harkin-DeFazio proposal could raise $350 billion over 10 years.

There is also growing support among financial industry professionals who believe the small tax would be good for market stability. In a joint letter, more than 50 financial professionals wrote that “These taxes will rebalance financial markets away from a short-term trading mentality that has contributed to instability in our financial markets.”

At a time when financial markets are dominated by computer-driven high frequency trading that has little benefit for the real economy, a tax of even a fraction of a percent could encourage longer-term sustainable investment.

At the end of the satirical video, the humiliated British banker lamely resorts to boasting about other occasions in which the Brits were not behind the curve, namely the Beatles and soccer. I suppose American bankers could come up with a few examples of their own. A better response to the growing momentum behind the financial transaction tax would be to just get on board. 

What's Hot and What's Not at COP19 in Warsaw

November 22, 2013 ·

Warsaw, Poland during COP19 (photo: Lauren Gifford)

This is the second week of the annual UN climate summit, hosted this year in Warsaw, Poland. Governments and activists gathered here on pushing for to make sure key provisions on lowering greenhouse gas emissions, adapting to a warming world, dealing with loss and damages from climate disruption, and finding ways to pay for it all are queued up for a new climate deal in 2015. As negotiations enter their final days, three participants weigh in on what’s hot, and what’s not, at COP19.


The HOT list…

Demanding climate justice

It seems everyone’s calling for ‘climate justice’ these days — and we’re all for it! It can mean many things, but most importantly it acknowledges the economic roots and geo-politics of the climate crisis. It’s based on recognition that global warming — and the proposed solutions to it — disproportionately impact low-income people and people of colour, and that those most impacted have the right to a seat at the table to speak for themselves. Sure, you can hang a climate justice banner on just about anything — that’s why international collaborations that separate the wheat from the chaff like the Global Campaign to Demand Climate Justice are so important.  

Philippine head of delegate Naderev Yeb Sano (photo: Adopt A Negotiator)Solidarity fasting

In his opening plenary remarks, Philippine head of delegate Naderev “Yeb” Sano announced that he would fast for the duration of the COP until “a meaningful outcome is in sight,” in solidarity with the hundreds of thousands of Filipinos without food, water and shelter in the wake of Typhoon Haiyan. Over 700,000 people around the world have stood with Yeb, and many are planning to fast once a month until COP20. As the Warsaw summit enters the realm of the ridiculous (like Poland sacking the COP host mid-meeting), we’d bet that people are getting pretty hungry. 

Asking “WTF?”

As in, “Where’s the Finance?” Dealing with climate change could cost more than $1 trillion each year. Wealthy countries promised four years ago in Copenhagen to set up a Green Climate Fund and deliver $100 billion per year once we reach 2020. But countries have so far refused to commit to a concrete plan for scaling up the paltry support provided since Copenhagen. U.S. climate chief Todd Stern has said not to expect more public funding from developed countries anytime soon. A High Level Ministerial Meeting on Finance is supposed to yield some answers — but we aren’t holding our breath.

Men in tights

There is one ray of hope for climate finance: Robin Hood and his merry men are about to visit Europe. 11 European countries — including the four largest economies on the continent — are implementing a Robin Hood Tax (also known as a financial transaction tax) in the coming year. This tiny tax on trades on stocks, bonds, currencies, and derivatives can yield up to $50 billion per year. France already has the tax and is earmarking ten percent of the revenue to climate and development overseas. The rest of EU11 might follow suit, and the U.S. should fall in line!

 Anti-corporate campaigning

The corporate capture of the COP by big business and dirty industry has been staggering. But the unexpected side-effect has been to unite civil society observers in taking up an anti-corporate mantle. Signs in the corridors have not been shy about asking “Who rules Poland?” and “Poland or Coaland?” 

Walkout at COP19: Polluters talk, we walk

In an inspiring show of solidarity with each other and the planet, environment, development, youth, labor, and faith groups said, “Enough is enough!” and walked out of the Warsaw climate talks on the eve of its final day, saying that it’s blatantly obvious that forces of the fossil fuel industry are making it impossible to have a real conversation about reaching a global climate treaty. Mainstream green groups joined with veteran climate justice activists to abandon COP19, promising they’ll be back even stronger next year when the climate summit moves to Lima, Peru.

 


The NOT list…

Paying twice the price of local food

Eating shouldn’t have to be a luxury, but it is in the Polish National Stadium (Stadion Narodowy) where the COP is taking place. Food is twice as expensive here as it is elsewhere in Warsaw. Delegates from many developing nations — and youth representatives — are counting their grozses to be able to afford the cardboard-flavoured Sodexo sandwiches. Another good reason to support Yeb’s fast!

Heart of darkness 

And we don’t mean the gloom that’s descended on the climate talks since Australia and Japan reneged on their promises (and policies) to reduce greenhouse gases. In November, the sun sets in Warsaw around three in the afternoon. Or maybe it’s coal ash settling from Poland’s 47 coal-fired power plants. Either way, consumption of Vitamin D has gone through the roof.

Sucking up to coal

In a show of solidarity with the dirty energy industry, UN climate chief Christiana Figueres heralded coal as an integral part of solving climate change at the International Coal and Climate Summit. Meanwhile, civil society staged a major action outside the summit denouncing the expanded use of coal. Cozying up to coal cost Figueres her invitation to the annual Conference of Youth, a meeting attended by people who actually care about the future. On the positive side, the UK said it would stop financing coal with public money.

Putting lipstick on the carbon market

The bleachers of Stadion Narodowy are abuzz with the promise of new market mechanisms. But existing carbon markets have shown a weakness for fraud, scams, and general ineffectiveness. The World Bank tells us not to worry — they’ve learned from the EU’s failures and the 20 new carbon markets they’re helping setup in developing countries will get the job done. For now, a decision’s been kicked down the road. But can we please stop trying to put lipstick on this pig (did someone say pirogues in szmalec)? Let’s stop wasting time and simply cut emissions.

Shameless self-promotion

You’ve got to hand it to Emirates Airlines. They’ve placed oversized beanbag chairs all over the conference for weary negotiators to take a nap. But let’s be honest, grownups in suits look silly sleeping on the floor! Maybe the aim was to get delegates so relaxed they’d forget that the airline industry as a whole is responsible for about 2% of global climate pollution — or that two of the UAE’s major economic drivers are oil and gas export. 

Australia’s "DILLIGAF?" attitude

Urban dictionary can help you out with that acronym. Australian delegates made it perfectly clear how little they care about finding a way to help compensate poorer countries deal with “loss and damage” from climate disruptions. The Aussie officials acted like “a bunch of high school boys misbehaving in class” in their t-shirts and flip flops before finally bracketing [i.e. putting on hold] all of the already agreed-upon text. Their disruptive behavior drove 130 developing nations to eventually walk out in frustration at four in the morning, abandoning what some have called the most important talks in Warsaw. Walk outs are so hot right now, it seems.

Jonas Bruun and Robbie Watt are PhD candidates at the University of Manchester. Lauren Gifford is a PhD candidate at the University of Colorado, Boulder.

Inside-outside Strategy on Wall Street Tax

April 24, 2013 ·

Cross-Posted with The Huffington Post

The International Monetary Fund is accustomed to rallies outside their Washington, D.C., headquarters during their annual meetings. What was different this past weekend was that the activists on the outside and several high-profile government and financial industry speakers on the inside were calling for the same thing: a financial transaction tax.

Outside, around a thousand activists called on world leaders to adopt a small tax on trades of stocks, bonds, and derivatives that could raise massive revenue for jobs, climate, global health, and other public investments.

Inside, in a somber basement auditorium, the IMF hosted a debate on the same topic. The uniform on the outside was a green Robin Hood hat. On the inside, it was a charcoal gray suit. In both spaces, however, there was the sense that the financial transaction tax is gaining momentum and credibility.

net_efekt/FlickrThe rally, sponsored by the Robin Hood Tax campaign, was not the largest to date, but it appeared to be the most diverse, with strong representation from labor, environmental, and global health groups, including National Nurses United, National Peoples Action, Friends of the Earth, Amalgamated Transit Union, Jobs with Justice, and Health GAP.

Inside the IMF, European Commission official Manfred Bergmann reported on the strong progress on his side of the Atlantic, where 11 EU governments are negotiating the final details of a coordinated financial transaction tax. The proposal on the table would tax stock and bond trades at 0.1 percent and derivatives trades at 0.01 percent. Expected revenues: as much as $45 billion per year. If the United States adopted a similar tax, it would raise an estimated $750 million to $1 billion over 10 years, Bergmann said.

Of course the IMF event was not without opposition voices. The strongest was Luc Frieden, the finance minister of Luxembourg, where a light regulatory and tax regime has boosted the size of the banking sector relative to GDP to a level similar to that of Cyprus. Frieden is particularly upset about the potential cross-border effects of the proposed EU tax.

Residents of non-participating countries will have to pay the tax if they trade with financial institutions in one of the 11 participating countries or if they trade financial instruments issued in one of those countries. The UK government has just launched a legal attack on the plan over this extra-territorial issue, a move Frieden applauded.

Avinash Persaud, a former senior executive of JPMorgan, UBS, and State Street banks, noted the irony of the UK's complaint. Britain's own Stamp Duty, introduced hundreds of years ago, is also extra-territorial. Trades of shares in British firms are taxed at 0.5 percent -- no matter who's doing the trading. An estimated 40 percent of the revenue comes from non-UK residents.

In a recent congressional hearing, U.S. Treasury Secretary Jack Lew also raised concerns about the extra-territorial impacts of the EU proposal. He failed to mention that U.S. investors have been subjected to the UK Stamp Duty and other countries' transaction taxes for some time now -- without the sky falling.

Nor did Lew acknowledge the many ways in which U.S. laws impose costs on non-U.S. entities. Take, for example, the 2010 Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to report information about financial accounts held by U.S. taxpayers to the IRS. Foreign banks have also complained about the extra-territorial implications of the Volcker Rule, the provision of the Dodd-Frank financial reform legislation which seeks to prevent deposit-taking banks from making bets with their own capital.

At the IMF, Persaud also scoffed at the Luxembourger's position that any transaction tax should be global: "Samuel Johnson said 'patriotism is the last refuge of scoundrels.' In this case, internationalism is the last refuge of scoundrels."

Indeed, many countries are already raising significant revenue from national financial transaction taxes. In addition to the UK, Persaud listed South Korea, Taiwan, South Africa, Switzerland, and Brazil among the countries that already have some form of the tax. He estimated their combined revenues at around $23 billion per year. Beyond the revenue benefits, Persaud argued that the current lack of taxation on trading activities creates "incentives to build edifices of value that are actually mirages" and can cause systemic risk.

The IMF event was the latest example of the Fund playing a constructive role in the debate. It didn't start out that way. In September 2009, the G20 assigned the IMF to prepare a report on "how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system." Initially, then-IMF Managing Director Dominique Strauss-Kahn said financial transaction taxes weren't even worth studying. In his view, such taxes were a "simplistic idea" that wouldn't work.

But in response to international public pressure, the Fund agreed not only to include the issue in their analysis but also to engage in civil society consultations. In the IMF report for the G20 leaders, they made clear their preference for other forms of financial sector taxation, particularly a "financial activities tax" on bank profits and compensation. Nevertheless, they also acknowledged that transaction taxes were administratively feasible and could raise significant revenue. And in a follow-up technical paper, they acknowledged that most G-20 countries, including Brazil, India, and South Africa, have already implemented some form of FTT. In October 2012, current IMF Managing Director Christine Lagarde said that the EU progress on a coordinated financial transaction tax was "clearly a good move."

At the debate, the Director of the IMF's Fiscal Affairs Department, Carlo Cottarelli, stressed that the IMF would still be pushing their "beloved" financial activities tax. But he admitted that since the IMF's 2010 report to the G20, there hasn't been much progress on that. "The momentum behind FTT was so strong, it was hard to turn in another direction. Sometimes life just isn't fair," he said with a laugh.

Follow Sarah Anderson on Twitter: www.twitter.com/Anderson_IPS

How About a Tax System for the 99 Percent?

April 17, 2013 ·

Cross-Posted with Yes! Magazine

Paying taxes, as tens of millions of us in the United States do every April, evokes many emotions—from gratitude for government programs that feed the hungry to disgust over paying for fossil fuel subsidies and unjust wars. But among a growing number of people, it is also evoking anger over an unequal tax system that favors the 1 percent over the 99 percent.  More and more of us are saying that corporations, Wall Street, and the wealthy should pay their fair share.

Robin Hood Tax USA/FlickrThe good news is that rising numbers of organizations and people are involved in struggles for a more just tax system.  Below we share the contours of three such campaigns, all of them winnable before the next U.S. president is elected.

Corporations: Daily newspaper headlines remind us that corporations are making record profits while their workers’ paychecks have been frozen for decades.  These same corporations complain that the corporate tax rate, pegged at a mere 35 percent, is one of the highest in the world.  And, corporations are lobbying furiously to cut that rate.

Read the rest of this post on Yes! Magazine's website

Wall Street's Climate Finance Bonanza

April 10, 2013 ·

Government officials from an elite group of developed countries meeting in Washington, D.C. at the invitation of U.S. climate envoy Todd Stern appear to be on the brink of instigating yet another corporate handout and big bank giveaway—this time in the name of fighting climate change.

Robin Hood Tax - photo courtesy of tcktcktck.orgIf it follows a recently leaked agenda, the meeting will focus on using capital markets to raise money for climate finance. The goal is to fill the void left by the United States and other developed nations that have failed to meet their legal obligations to deliver funding to poorer countries for climate programs.

In this corporate-oriented approach, countries would provide generous loan guarantees and export subsidies that sweeten investments for private firms and give them the chance to net big profits while leaving governments (and the taxpayers they represent) to cover the losses if investors’ bets don’t pay off. Wealthy countries would then be able to claim that they had moved billions of dollars of new climate investments.

Unfortunately, the projects best placed to benefit from large-scale private investment and market mechanisms—like mega-infrastructure projects and fossil fuel-powered ventures that hide behind a “low-carbon” label—are likely to be those that have fewest sustainable development benefits. In many cases, the funding will channel windfall profits to corporations that would have invested profitably even without these new channels of support. 

The sad fact is that this has happened before. Nations spent five years negotiating the Kyoto Protocol—the only multilateral treaty to regulate emissions of greenhouse gasses and spell out binding targets for reducing climate pollution. But before the treaty was finalized in 1997, the United States led a push to replace the enforcement mechanism—a fine for missing reduction targets paid into a clean development fund—with a market mechanism meant to lower the cost of compliance for polluting companies. The accompanying clean development mechanism (CDM) was born so that companies in the industrialized world could purchase ultra-cheap carbon pollution credits from developing nations to offset their continued pollution at home.

In the end the United States pulled out of the Kyoto treaty. But by shifting a global regulatory regime into a market-based regime centered on enticing private-sector investment with promises of profitability, Washington left its mark.

A decade and half later, carbon markets have collapsed, developing countries are awash with carbon credits for which there is no demand, and the planet keeps getting warmer.

Meanwhile, the clean development mechanism has led to private sector investment in spurious projects like mega-hydropower dams and coal-fired power plants that have delivered little in the way of sustainable development outcomes—and in some cases have further harmed the environment and human health.

Passing the Buck

And now Washington is at it again, hijacking the debate about how to support the global transition to a low-carbon, climate-resilient economy—and keeping the public, the press, and even developing countries out of the conversation. They’re repeating the same tired story that rich governments are broke and thus have to call in the private sector to finance climate change solutions.

In today’s economy, mobilizing private finance means going to the capital markets to raise money. But relying on financial markets for funding to support renewable, clean energy or to resettle climate refugees would subordinate climate action to the speculative whims of bankers.

Americans have visceral reminders of the consequences of leaving decisions about critical needs to the market—the more than 1.6 million families locked out of their homes and the $2.5 trillion in taxpayer dollars handed over to bail out Wall Street and U.S. car companies are just two. Europeans can point to the recent bailout after the carbon bubble burst. If a global climate finance bubble were to burst, we wouldn’t just lose our houses; we might have lost our chance at averting catastrophic global warming.

Governments in the developed world shouldn’t pass the buck to the private sector. They must act now. They can start by cutting subsidies for fossil fuels, including for natural gas “fracking” in the United States, and set binding regulation for reducing climate change pollution. Then governments can adopt innovative ways to raise public money, like taxing pollution from shipping or financial transactions. Indeed, even a very low financial transactions tax would generate substantial revenue and deleverage capital markets.

And of course, if there is any hope of creating a new paradigm of climate-sound development, there will have to be a role for the private sector. But the micro, small, and medium enterprises of the developing world would be preferable partners to the multinational firms that have been responsible for sucking wealth and resources out of countries for decades, leaving pollution and poverty in their wake.

At some point—and for the sake of the future generations who will bear the results of our decisions, we hope it’s sooner rather than later—the government officials who place their bets on private finance will have to learn that putting corporate profits over the needs of climate-impacted people is a risk the rest of us are not willing to take.

Antonio Tricarico is director of the New Public Finance program of the Italian organization Re:Common based in Rome and a former economic correspondent at the Italian newspaper Il Manifesto.

Janet Redman is the co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies in Washington, DC.

Editorial support by Peter Certo and Oscar Reyes of the Institute for Policy Studies.

** This piece originally appeared in Foreign Policy In Focus

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