Time for a tax for the people

01 October 2016

DAVID HILLMAN, director of the Robin Hood tax campaign, explains why it’s time, again, to take from the rich and give to the poor

robin hoodFeatured in the ASLEF Journal, October 2016, pp14

The Robin Hood Tax campaign, comprising trade unions like ASLEF, charities, and green groups, works for a tax on banks that would raise billions of pounds to tackle poverty and climate change, here and abroad. With no sign of Austerity Britain abating, and the recent European Union referendum highlighting deep divisions in our standard of living across the country, surely the time has come for a tiny tax that would benefit the many, not the few?

More than a million people who support the Robin Hood Tax agree with this simple, yet highly effective, idea whose benefits are huge. Such a tax, set at a fraction of 1% on deals by finance firms, not ordinary people, could raise tens of billions globally – and at least £8 billion here at home in the UK.

HELP THE MOST VULNERABLE

This is substantial and much-needed revenue £8 billion could prevent cuts to the vulnerable, the NHS, and could also create jobs if invested to stimulate the economy. The statistics are compelling: it would take less than one week of funds from a Robin Hood Tax in the UK to pay for the salaries of 2,000 new police constables, 2,000 newly-qualified nurses and 2,000 teachers. Just one day of revenue from a UK RHT would pay for more than 2 million additional hours of home care to help the most vulnerable people in our society.

Moreover,the FTT is simply good economics as it discourages the worst forms of casinotrading, which helped cause the global financial collapse in the first place.

The battle over whether to impose a Robin Hood Tax – also known as a Financial Transactions Tax – on the banks to fix the problems stemming from a financial crisis they caused has often become heated. The banking sector, of course, rails against it, calling it radical and unworkable. The opposite is true. They conveniently forget to tell us that the UK already has an FTT on shares, which brings in £3 billion each year. Our campaign is calling for an improvement on what we currently have and extending it to products such as bonds and derivatives that ordinary people do not buy and sell. The result would generate billions more from a sector that can clearly afford it given the fat salaries they cheerfully, and regularly, pay themselves.

FIGHTING TAX AVOIDANCE

Beyond the immediate, and obvious, revenue benefits, an FTT could play an important role in the fight against tax avoidance. The recent release of the Panama Papers revealed a vast seam of hidden information about the secret world of people and companies. Voices from all corners of the political spectrum are,finally, calling out for action to clamp down on tax dodgers – people and companies that use our resources, and infrastructure, but want to avoid paying their share.

Greater taxation of financial transactions has the important fringe benefit of giving greater oversight to tax authorities. They would gain a vital new source of information on the size and direction of financial flows. For example, in Brazil information provided by their domestic FTT proved extremely useful to tax authorities in identifying those who had earned a lot more than they had declared on their tax returns. The same could be true of an FTT here in the UK aimed at high finance.

So how politically possible is a Robin Hood Tax? There are encouraging signs. In Europe we are excitingly close with Germany, France, Italy and Spain, along with six other countries, set to finalise an historic FTT deal in October. There has also been important progress in the United States with the FTT named as official Democratic Party policy for the first time. This was due to the valiant campaigning efforts of Senator Bernie Sanders who proposed a Wall Street Speculation Tax to pay the college fees of less well-off students.

TAX FOR THE 21St CENTURY

The FTT is a tax for the 21st century. It possesses elements that make it immune to the avoidance problems that plague other taxes and, by improving transparency,would be a new and effective weapon in the fight against tax dodging. If we want a tax fit for the digital age which could raise billions to help tackle the stark economic and social inequalities we now face then one thing is clear– the Robin Hood Tax is an idea whose time has most come.

For more information, or to get involved in the Robin Hood Tax campaign, please visit www.robinhoodtax.org.uk

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