Wednesday, March 09, 2011

Europe backs a Robin Hood Tax

From the European Parliament:

"The EU should promote the introduction of a financial transaction tax, even if it is alone in doing so "as a first step", says Parliament in a resolution on innovative financing voted in plenary on Tuesday. . . both resolutions call for the development of a low-rate financial transactions tax (FTT) which they say could raise around €200 billion per year in the EU and would also discourage speculative trading by making it more costly. If imposing this tax worldwide proves too difficult, then the EU should impose it at European level.

An important step forwards. And it makes an important point: that if this proposed 0.05% tax leads to certain types of capital activity fleeing Europe, it's most likely to be the unproductive, rapid-churn and sometimes outright harmful, financial activity that flees. The good stuff - the real investment in real things - which does not rely on high-speed churning of transactions to make profits -- won't be squeezed out.
"The same resolution throws down the gauntlet to critics who warn about capital flight, arguing that the EU would benefit if purely speculative trading were to move to other jurisdictions since this would help to increase market efficiency."
Not only this, but:
A second resolution, also voted in plenary on Tuesday, calls for more EU tax-related assistance and clamp downs on tax evasion and tax fraud to boost revenue and efficiency in the developing countries. . . . The tax and development resolution calls for more tax-related development assistance from EU Member States and a clampdown on tax havens. Developing countries should at the same time reduce their reliance on foreign aid, by putting in place viable tax systems, it adds. "
Fantastic. This is a tax justice agenda if ever there were one. It's a non-binding resolution, but such things carry weight. As the Guardian reports:
David Hillman, a spokesman for the Robin Hood Tax campaign, said: "The pieces are now falling into place for a Europe-wide bank tax.

"The German and French governments are both pushing this; Austria and Spain are in support and today the European parliament threw its weight behind a tiny tax on financial transactions that could help us fulfil our commitments to tackling poverty and climate change, and help prevent such huge cuts in public spending.

"It's time the UK stopped dragging its heels and joined the rest of Europe in ensuring the financial sector pays its fair share," he said.
Indeed.

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