IMF admits Robin Hood Tax is possible: major step forward for campaign
Yesterday the IMF finally released its study on the financial transactions tax. The paper, a draft of which was leaked a month ago, admits that an FTT is possible, lists the 16 G20 countries who already have one in a limited form, and admits that the more transactions it covers the more effective it will be.
This grudging conversion – much more positive than just a few months ago (and of course a year ago it was dismissed out of hand by the IMF Director-General) – is marred by the IMF’s continued use of studies from 20 years ago – when the financial markets were totally different – which question the impact of FTTs on volatility. The only objection still standing in the way of a G20 decision to implement an FTT is lack of political will.
The IMF policy paper is one of the background papers included in a 200-page report on “Financial Sector Taxation” (pdf, pages 144-187). It acknowledges the feasibility of the FTT and its capacity to raise large amounts of revenue although the Fund favours taxation of financial activities which would raise far less.
The release of the paper coincides with a debate on the FTT that took place Saturday morning as a side event to the IFIs’ annual meetings between the IMF and FTT proponents. (Speakers were Victoria Perry, IMF; Prof. Robert Pollin Uni. of Massachusetts; Peter Bakvis, ITUC/Global Unions). The FTT proponents noted the contributions that the paper made to knowledge about the FTT and suggestions for its specific design, but contested some of the arguments made by the IMF in critiquing the FTT.
Two months ago, the IMF made a version of its FTT study available to Global Unions and other civil society groups who made submissions on the FTT during consultation in early 2010. Only small modifications were made in the study released today.