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Entries tagged "robin hood tax"

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A Robin Hood Tax Can Raise Big Bucks for People and the Planet

June 19, 2012 ·

Today I’m joining tens of thousands of people — in 15 cities around the country — rallying outside Wall Street institutions to tell President Barack Obama that it's time to put a tiny tax on big banks. We’re calling it a Robin Hood tax because the tiny tax will hit some of the wealthiest corporations on earth, but the money it raises will mean big bucks for people and the planet. Take back our money from the banks, give it to the people. Simple enough:

In Washington, DC, where I live, we’re heading down to JP Morgan — home to CEO Jamie Dimon who just lost $2 billion on his watch to risky trades. He told members of Congress in a hearing last week that everyone should calm down, it’s just a drop in the bucket. He's likely to stick to the same script at another hearing today.

This is exactly the problem. Wall Street fat cats don’t care if their reckless behavior makes the economy less stable. In fact, they make a lot of money when the prices of things like food and oil race up and down.

Volatility may be a cash cow for the already rich, but it undermines long-term investment in what we actually need  — like clean energy. A Robin Hood tax could curb some of that risky speculation by making high-speed trading less lucrative.

That’s part of why climate activists are calling on world leaders to tax financial speculation — and why that call is reaching a crescendo at the Rio+20 Earth Summit. People who care about our children’s future are demanding that the financial sector, which made trillions from a global economy that trashed the planet, pay its fair share to heal the environment.

The other reason is that a Robin Hood tax could raise hundreds of billions of dollars each year for building a climate-friendly economy and creating good, green jobs.

Heads of State like new French President François Hollande are committed to a financial speculation tax, and to coordinating with other European countries. Now more than ever it’s time for Obama to say yes to a Robin Hood tax.

Conservative Candidate Supports Wall Street Speculation Tax

April 5, 2012 ·

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. Credit: UMP photos.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.

Emerging Economies Join G20 Coalition to Tax Speculation

November 4, 2011 ·

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.

At an action this week, Robin Hood visited G-20 leaders. Photo and action by Oxfam International.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 Institute for Policy Studies.

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.

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