Harkening back to the legendary English figure who “robbed from the rich and gave to the poor,” a coalition of more than 60 national and international organizations launched a Robin Hood Tax campaign in the United States on June 20. The campaign aims to pressure Congress to place very small taxes on financial transactions (financial transaction tax, FTT) in order to raise money for health, education job creation and environmental programs. Campaigners argue that such a tax is necessary to raise increasingly limited public funds and to help decrease some of the dangerous speculation partly responsible for the financial crash of 2008.
In the same way that Robin Hood took money from Britain’s richest people to give to the poor, an FTT would take funds from the financial sector which now comprises an historically large portion of the overall economy. As Sen. Sherrod Brown (D-OH) said in 2010 – and was confirmed by fact-checking organizations – “Fifteen years ago, the assets of the six largest banks in this country totaled 17 percent of GDP… The assets of the six largest banks in the United States today total 63 percent of GDP.”
The Robin Hood Tax would place a minuscule tax on different transactions,(varying between 0.005 percent and 0.5 percent, depending on the items traded, such as derivatives, stocks, bonds, currencies, etc. Being so small, the tariff would barely be noticed by regular traders. Only high frequency traders, whose computer programs make millions of trades per second skimming profits from infinitesimal price changes, would be seriously affected. And limiting this sort of trading may be a good idea as increasingly markets have been forced to shut down temporarily due to high frequency programs run amok.
More than 1,000 economists from 53 countries and 1,000 parliamentarians in more than 30 countries have signed letters in support of financial transaction taxes. Politically, the tax could be very popular because even though it would be felt by very few, it could bring in hundreds of billions of dollars to be used to benefit the poorest people in society.
While the fabled Robin Hood had a conflicted relationship with the church, the current campaign using his name has wide support from faith leaders around the world. A letter to the U.S. Congress signed by more than 100 organizations, many of them faith-based, reads, “[T]hree years after the financial meltdown and a taxpayer bailout, Wall Street is booming with record profits and bonuses being reported. At the same time folks on Main Street are still suffering with zero new job growth and rising poverty. It is both fair and practical to call on Wall Street to do more to aid the recovery.”
A statement from German Catholic and Protestant churches said, “The taxation of capital is far below the taxation of goods and services. The FTT would increase the taxation of the financial sector which has in the past been exempted from contributing financially to society. The FTT can potentially create more stability in the financial markets and at the same time could create the means for global poverty eradication and protection of the environment and tackling climate change.”
The Pontifical Council for Justice and Peace, the Catholic Church’s socioeconomic think tank, wrote, “[T]axation measures on financial transactions…would be very useful in promoting global development and sustainability according to the principles of social justice and solidarity.”
Even a number of financial market experts have come out in support. Seven former executives of Wall Street banks, together with four current and former European bank heads and over 40 other hedge fund and portfolio managers, wrote a letter to G20 leaders saying, “New FTTs, whether agreed by the G20, EU, or by individual countries, offer a real opportunity to help restore the financial sector to its proper role, while raising massive revenues for people in urgent need at home and in the world’s poorest countries. We believe this is an opportunity that should not be missed.”
During the upcoming lame duck session of Congress when legislators will be desperately searching for ways to keep the country from falling off of the “fiscal cliff,” the Robin Hood tax should be at the top of their agenda. None of the other options being discussed have the potential to bring in as much money and most of the other options have worse drawbacks as well.
Unfortunately, Wall Street still has a great deal of influence in Congress, so many legislators are timid about a tax on financial trades. It is up to us to make sure that our Senators and Representatives know that we the people want a Robin Hood tax.
Learn more about the campaign here; help spread the word to your friends and families; consider joining the more than 100,000 supporters of the campaign. Organizations can sign up to be official endorsers of the campaign.