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Robin Hood to the rescue 11 February 2010

Posted by cooperatoby in Uncategorized.
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In a stroke of genius, Richard ‘4 Weddings’ Curtis has rechristened the Tobin Tax the “Robin Hood Tax ” and made a 2-minute film starring Bill Nighy to launch it. I heard about it on last night’s PM. It’s such a simple and overdue idea it can’t fail – particularly as Gordon Brown has come out in favour too. The campaign calculates that a 50p per £1,000 levy on all transactions that don’t involve actual consumers – i.e. not only currency exchange but bond speculation – would raise £250bn per year. Brilliant. It will as he says give banks the opportunity to become part of the solution!

There seem to be two main arguments against, and both are paper-thin:

(1) you have to have the whole world on board or else you will scare the “financial services” industry and it will emigrate and take 25% of the UK’s corporation tax revenue with it. Well quite apart from being tempted to say “good riddance” as we all revise down our expectations of a comfortable retirtement, the same argument is used in New York where they say they will come to London! Where are they going to go? We can get an OECD consensus, police our offshore dependencies and if anyone else sticks out – just unplug them from the networks.

(2) it is economically “inefficient”. Well as far as I can see having unemployment and empty property are inefficient too. Capital is just one factor of production like labour, fuel and land. To live in a civilised society you have to raise taxes. The point is to have a fair, workable and robust taxation system that raises reasonable amounts from lots of different sources. There is no special reason to make an exception for financial transactions – indeed on grounds of equity one would first lower taxes on labour (and put them up on carbon).

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