Taxing Wall Street
The non-governmental organization (NGO) movement pushing reform of the financial industry in the form of the so-called Robin Hood Tax has traveled across the pond from England to the United States, drawing considerable interest and support. While anti-tax crusaders are sure to hate it on principle, the Robin Hood Tax is proving quite popular with not just peasants and serfs, but lords and ladies of the manor as well.
The Robin Hood Tax advocates for a financial transactions tax (FTT) of one half of one percent on all stock market transactions. It is being lauded by supporters as an effective way to curb the volitility of high-volume speculative trading on Wall Street while raising enormous amounts of revenue for social programs.
“This small tax of less than half of one percent on Wall Street transactions can generate hundreds of billions of dollars in the U.S. alone,” reads a statement on the movement’s website (robinhoodtax.org). “It won’t affect ordinary Americans, their personal savings, or every day consumer activity, such as ATMs or debit cards. It’s easy to enforce and tough to evade.”
It’s also very popular. According to the International Trade Union Confederation, support for an FTT is 63 percent in the U.S. and over 80 percent in both France and Germany. Currently, a version of FTT is already being implemented in India, Singapore, Hong Kong, Switzerland, and the United Kingdom.
“The tax offers an antidote to austerity and a rallying cry that hard-core occupiers, Democratic senators, and reality-based conservatives can all get behind,” Katrina van Heuvel writes for The Nation.
Robin Hood Tax has been endorsed by a variety of artists, businesspeople, politicians and church leaders, including Mark Ruffalo and Tom Morello, Warren Buffett and Bill Gates, Desmond Tutu and the pope.
The reform is even getting support from those in the financial community, including 50 industry heavyweights who recently signed a letter advocating the Robin Hood Tax. “The signers,” van Heuvel reports, “range from former heads of European banks to former managing directors of JP Morgan.”
For many, employing an FTT is not just a way to raise revenue, but also a way to reduce the velocity of speculative trading in the market.
“In return, investors get a much more stable environment for their investments,” says Oregon representative Peter DeFazio, a supporter. DeFazio recently proposed a bill calling for a 0.03 percent tax on all trades. Advocates of the Robin Hood Tax and other forms of FTT point out that, while capable of raising billions of dollars, the tax rates are so small as to be almost insignificant in the trading market.
DeFazio’s proposed tax rate, notes Sam Pizzigati of the Institute for Policy Studies, “runs 321 times smaller than the typical sales tax on a tube of toothpaste.”
“The volume of global speculative trading [industry experts point out] now exceeds—by 70 times—the size of the entire real global economy, the actual goods and services that people use everyday,” Pizzigati writes at his online journal Too Much: A Commentary on Excess and Inequality.
Rep. DeFazio agrees. “These people are getting filthy rich by driving up the price of commodities,” he notes. “They don’t care how they affect the real economy. They don’t care if they drive up the price of oil. They’re just there to trade something 1,000 times a minute with super-computers.”