The tax that robs the rich

A new campaign for an old idea, known as the Robin Hood Tax, proposes to levy a small charge on banks’ own transactions and distribute the money to good causes

'IT'S A sweet little idea, taxing the banks to help the poor, but I don't think it will work." So says British actor Bill Nighy, playing a banker who patronisingly bats away questions about the introduction of a Robin Hood tax while London's financial centre bustles outside his office windows. By the end of the short film, which was directed by Richard Curtis of Four Weddings and a Funeraland Love Actuallyfame and is now available on YouTube, Nighy has been bombarded by the figures, and forced to accept that such a tax is perhaps "quite a good idea". The video, released this week, spearheads a new campaign to bring in a tax on banks with the funds to be redistributed among worthier causes, and Curtis already has a number of organisations signed up, including Barnardos, the Trade Unions Congress, the Salvation Army and Bono's One campaign.

The tax, also known as the Tobin tax after the American economist James Tobin who first mooted the idea in 1972 as a tax on all spot conversions of one currency into another, is envisaged as a 0.05 per cent levy on speculative bank transactions that do not involve members of the public. And what was once dismissed as a pipe dream has been gaining backing from all manner of high-profile people as the effects of the recent financial crisis become clear, among them UK Prime Minister Gordon Brown.

Brown first voiced the Tobin tax as a real possibility at last year’s G20 summit of finance ministers, since which time a number of other world leaders have got on board the notion of some form of bank tax, including Chancellor Angela Merkel and President Nicolas Sarkozy.

It’s easy to see why the public might also get behind the idea in the wake of bailouts for banks, which many saw as responsible for the crisis in the first place. With more than 30,000 votes logged on the Robin Hood Tax campaign website at the time of writing, close to 28,000 have said they think the tax is a good idea.

Perhaps unsurprisingly, not everyone is in favour of such a measure. There is concern that the tax would work only if it was implemented globally, and the US has already rejected the idea. However, the IMF is reported to be looking at other options, while Brown seems confident that a global deal is near and can be concluded at the next G20 in Canada in June.

Estimates suggest the tax could net hundreds of billions of dollars a year, and though there are questions remaining over how it would be spent, the UK campaign is pushing for it to be used to “boost the NHS, our schools, and the fight against child poverty – as well as tackling poverty and climate change around the world.”

In Ireland, there are no immediate plans to introduce the Tobin tax, although the option has not been ruled out. “We will consider any proposals in conjunction with our EU partners, but it should be noted that we already have a significant charge to the banks for the benefit of the State guarantee on deposits and fundraising, which equates to approximately €1 billion over two years,” says a Department of Finance spokesperson.

Yet as Colin Roche, policy and advocacy co-ordinator for Oxfam Ireland points out, the campaign for a banking tax is gathering momentum.

“It’s an idea whose time has come,” says Roche. “Over the past 10 years, we’ve seen a boom in the financial sector in proportion to the economy, so if we can take some of that activity and put it towards helping people in poverty, either in rich countries, or for people in developing countries, then that’s something we should be doing and something that the Irish Government should support.”

See http://robinhoodtax.org/