Few figures in English history represent the triumph of fuzzy myth-making over reality more than Robin Hood. There’s no evidence that he existed, and if he did, I wouldn’t be surprised to learn that in fact he was basically a terrorist while the Sheriff of Nottingham was a hard-working public servant doing a tough job in difficult circumstances. Perhaps that makes Hood an ideal figurehead for the NGO-backed campaign for a financial transactions tax, something which is heavy on symbolism and light on detail.
Debate over the plan – which would impose a small levy on financial transactions to fund domestic public services, and poverty reduction and tackling climate change overseas – has focused on whether it makes financial success. Less discussed is whether the scheme is politically possible or even desirable.
As the campaign website acknowledges a Robin Hood Tax (RHT) “requires co-ordinated implementation by the G20 countries, or at least the G8.” They think this is possible because the international response to the financial crisis demonstrated the “ability of powerful countries to act in unison”. However, during the financial crisis, nations’ immediate interests were all pointing in the same direction. Where states have in recent years tried to coordinate over issues that transcend national interests, the results have been acrimony and deadlock (eg Copenhagen, Doha).
Even if a sufficient number of countries do sign up, some important questions remain unanswered, even unacknowledged. For example, if the RHT is to be a permanent fixture as the campaigners appear to suggest, what would happen if a future government wanted to withdraw? Doing so would destroy the level playing field on which the system depends but locking future governments in would be undemocratic and unconstitutional.
Maintaining the level playing field would also require blocking states from changing unilaterally the size of the levy or the destination of revenues away from frontline public services. According to the website, “all stakeholders would take decisions jointly about collecting and allocating money”. They don’t flag up that this would entail an erosion of national sovereignty on fiscal policy, something about which, in the debate over Europe, the British public has shown it feels strongly.
Similar issues arise when you wonder how the RHT will be enforced. How do you stop some financial regulators being more lax on evasion than others? What if France classified France Telecom and EDF as public services? The task of preventing abuse and ensuring uniform interpretation of key terms would surely require an oversight body capable of overriding national governments and regulators – another big step with profound implications.
Monitoring how revenues earmarked for international development are spent could also be a headache. The campaigners say funds would be managed by “a UN mechanism” and “spent according to developing countries’ own poverty reduction priorities”. As seen at Copenhagen, developing countries are very sensitive about donor states trying to monitor aid outcomes. But donor countries might be accused of unworldliness if they hand over chunks of their national wealth without a say on how it’s spent and no rigorous audit mechanism, especially following the BBC report this week alleging that large amounts of money raised for Live was siphoned off by Ethiopian rebels and spent on weapons.
Then there’s the issue of fairness. Just because something punishes bankers and splurges money on the poor does not mean that it operates fairly. If all stakeholders make decisions “jointly”, even though some countries by virtue of having bigger financial centres contribute far more, is that actually fair? Furthermore, and without wanting to be shunned in left-wing circles, I don’t fully understand why, when clawing back the money sunk into saving our banking sector, the British taxpayer should share a kind of preferred creditor status with governments overseas who had nothing to do with it, or why the government should not be able to spend the money as needs dictate.
“Not complicated. Just brilliant”, is how the campaigners sum up their idea. I politely suggest that they haven’t thought it through.
Photo: Robin Hood Tax 2010
Nice. You miss a couple of other objections, though: the campaign’s maths is wrong and the British would not get the money suggested by the campaign. http://blogs.ft.com/ft-dot-comment/2010/02/10/robin-hood-and-the-happiness-levy/
To be fair, the campaign has responded extensively to these concerns, and has 350 economists backing them.
there has been an extensive back and forth on this.
http://robinhoodtax.org.uk/debate/a-doubters-questions-answered/
and lots of responses from those backing the campaign which should be taken seriously.
the campaign says that it would be best if the G20 did it together, but that the UK and europe could go it alone too, and not wait for obama. interestingly vince cable now supports this move
http://www.youtube.com/watch?v=WzeHp2U1cQM
The campaign is really clear that the money raised by this tax in the UK numbers.
i posted before I had finished.
the campaign is clear that resources raised in the UK would be kept by the UK and would not be spent by some global government. if the uk would then want to commit some of it to spend on africa or on climate change then it would be up to the UK govt.
Any laws have questions around implementation and enforcement, does not mean we should not try to implement them.
How depressing.
The notion that an essentially humanitarian tax might be a bit tricky to implement, so we might as well bin it.
Or that the tax is a bit more complicated and nuanced than the YouTube video suggested it might be – ergo it’s dubious.
Or that the most powerful governments on the planet couldn’t agree to developing this idea (so let’s not bother).
Or its supporters are misguided and naive, so…
It is a pretty big claim to assume that this campaign is lacking on detail. With an endorsement from Jeffrey Sachs and over 300 economist it is clear to me that the substance and aims of this campaign are spot on.
The campaign is straight forward and common sense, it’s a great shame and evident that we have bought into bankers rhetoric that this is complicated and an unattainable tax. What is baffling is it seems like you are listening to the ‘big talk’ from the city pre banking crisis that and failed to learn any lessons that they are not what they say they are.
Humm what I find amusing with those against this tax is the lack of research into what taxes are in place on banks in the UK and other countries. 0.5% tax is currently placed on share transactions and has not stopped people buying or selling shares in the UK, which in fact has one of the world’s largest stock exchanges.
I support this campaign and feel that even half a progressive would feel the same. To see the eradication of world poverty and achieving climate change adaption for those that need it the most. This is not a lefty pipe dream but a world that could actually happen if we focus on the outcomes and poor people around the world rather than rich bankers.
Future governments would never be locked into continuing with this but like the NHS the benefits and outputs would alone be enough make such an idea to withdraw a very unpopular thought.
Another article that shows just how out of touch Progress is with the progressive grassroots.
– a tax whose implementation would require nothing less than a global government.
What is most unfair about this tax is that the cost of all these transactions will be passed onto those of us who can least afford it through higher fees and rates. Selective taxes on the other guy always gets passed onto us. The UK stamp tax on shares is an interesting example where only the poor and middle class pay the tax, no exemption for them, where 71% of the trading volume is tax exempt as transacted by traders, market makers, funds, banks etc. If the traders, market makers were not exempt, we would pay double the tax. The tax will solve nothing. It will not prevent another crisis.
So locking in future governments would be undemocratic and unconstitutional?
What about every piece of international law ever ratified? Nuclear non-proliferation, the Geneva conventions, International Human rights Law, Maritime Law…
Several G20 nations have already strongly rejected the suggested tax, so agreement will not occur.
A punitive tax advocated in unbecoming censorious language can readily be interpreted as meddling in foreign affairs.
This idea is potentially harmful to millions of jobs and businesses that most certainly did not engage in irresponsible lending to irresponsible borrowers.
Most international banks did not fail, they are appropriately managed and their hundreds of thousands of ordinary employees deserve much more respect than is repeatedly tossed at them by promoters of a punitive tax that would disadvantage ordinary investors and retirees.
For outside individuals to interfere in foreign taxation matters by attempting to set policy and influence direction of public money, is an insult to independent sovereignty and the intelligence of our populations.
Recent reports on distribution of charitable money make interesting reading. Google the following key words :
Geldof Meles Zenawi Tigray CIA Oxfam UNICEF
It would be disastrous if they introduced such a tax. The Robin Hood campaign is deliberately misleading. If you are feeling charitable you would be better off donating to the poverty fighting Robin Hood FOUNDATION instead (http://www.robinhood.org/home.aspx), ironically founded by financial trader Paul Tudor Jones…
When Sweden introduced a financial transaction tax in 1984 net tax revenues were actually NEGATIVE as the amounts generated were less than 5% of the amounts claimed beforehand, whilst capital gains taxes also fell by an amount greater than the amount raised from the transaction tax…
Liquidity in financial markets would dry up leading to greater volatility in securities prices, competition in financial products would decline, bid ask spreads would increase and costs would be passed on to pensioners, savers, investors, farmers and other hedgers…
Mind you, Fidel Castro thinks it is a good idea.
“undemocratic, unconstitutional and downright unfair” – So this blog is arguing that the redistribution of wealth unfair, who would have thought this was a Labour leaning site. Goodness me.
Is this the progress line on Robin Hood Tax, I would love to know!