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Occupy Movement: Is a global Robin Hood Tax the way to go?

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Panhead

Panhead
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More Globalism IMO....just like the BoA story yesterday.

Occupy Movement: Is a global Robin Hood Tax the way to go?

By Catherine Solyom, The Gazette October 21, 2011 9:05 PM

MONTREAL - Jail the bankers, create jobs, forgive student debt, restore democracy, occupy the world. The desires, to not say demands, of the Occupy movement around the world are many and varied.

But one candidate is emerging as a possible rallying cry for the thousands of protesters to put to the leaders of the G20 meeting in France on Nov. 3: Take from the rich and give to the poor – with a global Robin Hood Tax.

Also known as a financial transaction tax (FTT), the Robin Hood Tax would see a small percentage – some suggest 0.05 per cent – levied on transactions involving shares, bonds and derivatives, the kinds of “products” that helped bring down the world economy in 2008.

The resulting funds, counted in the hundreds of billions of dollars, could go toward reducing poverty and combating climate change.

It’s hardly a new idea, but it’s gaining ground like never before. John Maynard Keynes first proposed it in the midst of the Great Depression to mitigate “the predominance of speculation over enterprise …” The idea was revived in 1972 by economist James Tobin, who proposed a tax on currency transactions to “throw sand in the wheels” of international finance, and reduce speculation and fluctuations in exchange rates.

Now, Tobin is joined by three other Nobel laureates, Bill Gates, Desmond Tutu, at least two democratic Congressmen, a host of celebrities, the IMF, and the French and German leaders: Last month, they proposed an FTT on stocks and certain derivatives for the European Union, which would raise $80 billion a year, and they plan to push for it at the G20 meeting.

Adbusters’ Kalle Lasn, the spiritual father of Occupy Wall Street, has called for protesters to march together on Oct. 29 to demand the Robin Hood Tax, during what he hopes will be the movement’s “Tahrir moment.”

But every Robin Hood has its Sheriff of Nottingham.


As the host of the last G20 summit in Toronto in 2010, Finance Minister Jim Flaherty was instrumental in voting down an FTT as insurance for any future bank failures. Canadian banks did not require a bailout from taxpayers, he argued, so why should they be punished?

Asked again about the FTT last week, he said: “It smacks of some sort of punitive action … It makes no sense in ensuring that banks are adequately capitalized which is what is important to people, all of us … so we avoid another financial crisis.”

Jan Ericsson, a professor of finance at McGill University, agrees.

“It would have political value as punishment and make people feel good, but it won’t do any good,” he said.

It would reduce the volume of transactions and hence the corporate taxes paid by financial institutions, and it would target all those making such transactions – including pension funds. And it would have to be global to work. Sweden imposed an FTT, and the end result was that transactions were shifted abroad.

Toby Sanger, a senior economist for the Canadian Union of Public Employees, argues that the financial sector paying its fair share of taxes is also important to the people – as evidenced by the Occupy movement – and there’s no shortage of worthwhile ways to spend the money.

The strongest advocates for the Robin Hood Tax are NGOs, like Oxfam, Friends of the Earth and the Salvation Army. They calculate a global tax could yield $100 billion plus annually for reducing poverty in the developing world – where health care and education budgets have been slashed since the economic downturn – and in the G20, where austerity measures are also taking their toll on average citizens, the “99 per cent.”

“Governments have gone back to the same business-as-usual economic policies that led to this great recession and imposed austerity measures while at same time cutting corporate tax rates,” Sanger says. “Meanwhile corporations in Canada have half a trillion dollars in excess cash that they’re not investing.”

According to Sanger an FTT of 0.5 per cent, even if it reduces the volume of transactions in Canada by half, would net $3.5 billion per year – a half billion less than what the financial sector is saving as a result of cuts to the corporate income tax rate since 2001. There is no GST or HST on transactions either, while tax rates on stock options and capital gains, often a significant portion of executive compensation packages, are low.

Sanger agrees the FTT should be global, but several states, like the U.K. and Switzerland, have had FTTs in place for decades, even centuries, and it hasn’t crippled their financial centres.

Resistance to the FTT by the Canadian government is more a reflection of its coziness with the banks, Sanger says, where many former ministers have landed: former federal environment minister Jim Prentice is now vice-chair of CIBC, and former finance minister Michael Wilson became chair of UBS Canada, to name two.


Occupy the World could exert an opposite pressure, says Yvan Allaire, author of Black Markets and Business Blues.

“Governments have to become more afraid of the people than of the bagman, afraid of being thrown out of office,” says Allaire, who also heads the Institute for Governance of Private and Public Organizations. He says an FTT should target transactions that use other people’s money to make fast returns, instead of investing in the economy. If the volume of such transactions goes down, so be it.

But states can also adopt measures to reign in the financial industry within their borders, Allaire said.

Pension funds, for example, should not be allowed to fuel speculative transactions that can come back to hurt the very people investing in them. And executive compensation packages must be tempered.

“$3.1 billion – what would you do for that kind of money?”

As for the “demands” of Occupy Wall Street, Allaire says it’s not their job to come up with solutions. “It’s up to elected officials. If they don’t, they will lose all legitimacy and that’s very dangerous. All revolutions start with the loss of legitimacy of those in power.”


Read more: http://www.montrealgazette.com/business/....l#ixzz1bTpbQs00


gente

gente

Good find Pan-Yea, that's what we need, more Socialism

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