The Robin Hood Tax

The 'Robin Hood Tax' campaign has been set up to gain support for a tax on financial institutions. The tax would be on all financial transactions at a rate of 0.5%. This could make around £250 000 000 tax revenue each year.

As taxation revenue was around £606bn in 2007/2008, an extra £250bn would help improve a lot of peoples lives

The idea is based on the Tobin Tax, a concept economist James Tobin first suggested in the 1970's.

The Tobin Tax was deemed to prevent the investment of large amounts of money in a foreign currency only for it to be pulled out after a short while which can result in instability such as a rise in inflation (wiki link). However the other upside is that it would produce tax revenues that could go into the NHS, education and other public services.

Joesph Steiglitz, a professor at Columbia University, holder of a Nobel Prize for Economics and the former Senior Vice President and Chief Economist of the World Bank supports the plan. He says “The benefits are twofold. Very little social returns come from short-term trading. It results in extreme volatility and excessive trading. So anything that discourages short-termism is to be encouraged. Does anybody seriously believe that anything happens because of the sort of micro-second trading we're now seeing? It's a function of speed. No investments are being made as a result of it, no jobs are being created. Finance has a vital socially important role to fulfil.... But the bankers fail to perform that socially useful function — and because of that, the world's economy has suffered.”

The campaign has the backing of severals unions (though it would appear currently not the RMT) and environmental and poverty charities.

One of the arguments against such a tax is that banks would just move or carry out taxable business abroad. If this were the case then why do so many banks operate from this country? The UK is presumably a good environment for bankers as so many of them are here. Also, with the ever increasing wealth gap, would it matter if these banks did leave the UK? It wouldn't appear that the wealth accumulated by this industry is going back into the society it is taken from. More so when you look at how much tax payers money has been used to support these banks.

The Robin Hood Tax campaign website is running a poll to see whether people support the tax. They were surprised to get 5,000 'no' votes in 20 minutes but further investigation showed that 1700 of these had come from a Goldman Sachs server, and the rest from an individual computer. A Goldman Sachs spokesperson said "We have just received this information, and we are investigating the matter fully."

I've signed up for the mailing list to see how this campaign develops. So far they are suggesting writing to your MP and spreading the word on FaceBook and Twitter I will be interested in what happens to this campaign as it gathers pace. They currently have around 13,000 signatories and I look forward to seeing that grow.

The Robin Hood Tax campaign website is is here.