Robin Hood taxes: Can the G20 remain blind, deaf and mute?
Valot H: CIVICUS, 3 November 2011
Robin Hood Taxes: Can the G20 remain blind, deaf and mute? Posted on November 3, 2011 by Henri Valot alsso at The global financial transaction tax (FTT) is a key proposal that civil society is campaigning for at the G20 Cannes Summit. It has the potential to raise billions of dollars to support goals of more just world – not just the minimalist MDGs but long-term sustained action to address the climate and economic crises currently gripping the world. Yet, will the G20 step up to the plate to make this happen? The Interim Report of the G20 on Fair and Substantial Contribution by the Financial Sector (2010) had proposed a flat rate levy on all financial institutions and a “financial activities tax” on profits and remuneration in order to pay for future financial clean-ups and reduce systemic risk. The policy objectives for a FTT are essentially two-fold: to raise revenue and to restore stability and integrity in the financial markets. According to estimates made by Bill Gates (founder of Microsoft) in a forthcoming report to the G20 on new sources of finance for development, a tax on financial transactions could generate about $50 billion from G20 member-countries. Some other estimates claim that a global financial transaction tax could generate as much as $250 billion if a wide range of transactions are included. The resources raised through FTT could be better used to support programmes to fight hunger and poverty, and pay for climate mitigation and adaptation costs. What kind of wide range of transactions are we talking about? There are 7 global taxes, which could easily become reality: 1.A tax of 5% on First and Business class tickets already funds UNITAID, and raises US$200 million annually. Generalised, it could raise US$ 8 billion globally; 2.A tax on polluting activities would complete the current “right to pollute” market and finance the UNEP programmes. Such a tax, amounting US$20 to 25 for every ton of CO2 would raise US$300 billion. Taxation of air and sea international transportation only could raise US$40 billion; 3.An additional tax on top of national taxes on transnational societies would eliminate tax havens and would turn these companies into global tax payers; it would raise US$100 billion; 4.A tax on arm sale (internal and export markets). Which represents US$200 billion a year, could reach US$30 billion a year without difficulties; 5.A tax on capital profit could represent US$50 billion if it was generalised, if it covered all tax havens and if it was controlled; 6.The tax on currency exchange transactions limited to a rate of 0.005%, and applied to principal currency exchange markets (US$, Pound and Yen) would generate at least US$33 billion. It would also reduce the volume of transactions by 14%. Amounting to 0.1%, this tax on financial transactions would raise between US$150 and 300 billion. It would also become an efficient instrument against speculation, as shown in Chile and Malaysia in the 90s; and 7.A tax of US$0.05 on every cigarettes pack in the rich countries (and of US$0.01 in poorest countries) would raise additional US$7.7 billion. It would “affect” 1.3 billion smokers globally, including 900 billion in the G20 countries. If it was higher, it would help reduce tobacco consumption, which alone costs US$100 million in health costs to the American economy and provokes more death globally than malaria and AIDS altogether. Such taxes can be conceived only if they apply to all countries on the planet, including safe havens. These taxes will exist. The battle is starting on how we will use the resources raised, beyond the famous US$100 billion needed to implement the MDGs. Here is the rationale and the logic of any collective action: no action without resources, no resources without legitimacy, no legitimacy without popular will, no popular will without ownership. This ownership and will is roaring everywhere. Can the G20 remain blind, deaf and mute? The G20 is yet to take a firm position on the issue as many influential members are opposed to it while others are sitting on the fence. As mentioned above, the additional funds raised would go a long way towards addressing many of the pressing problems facing humanity including poverty reduction, fighting deadly disease and taking action on climate change. Civil society has been campaigning hard for the Financial Transaction Tax. The ball is now clearly in the court of the leaders of the world’s richest economies as they meet in Cannes for the G20 Summit. These simple words are extracted from the latest book by Jacques Attali, a wise French intellectual, for many years François Mitterand’s Sherpa at the G7. You should read it! In solidarity, Henri Valot