Something’s moving in the USA, as President Obama begins to pull away from Republican contender Mitt Romney (in swing states more than most). Although Team Obama is anything but complacent, the real electoral battle now looks likely to be about who runs Congress. And a much more important regime change could happen a block away from the White House, at 1500 Pennsylvania Avenue where the US Treasury is based, and, come January, Treasury Secretary Tim Geithner will be retiring. His successor, probably a Democrat, may be the one to bring the Robin Hood Tax to Wall Street.
The liberal New York Times and its star blogger Nobel laureate Paul Krugman have supported a Robin Hood Tax for some time. What’s new this year was the launch of the USA’s own Robin Hood Tax campaign backed by AIDS campaigners, green groups and unions like the National Nurses United. And now, their campaign has spawned fourteen different Congressional bills, and, on Wednesday, an editorial supporting the Financial Transactions Tax (FTT) in the biggest selling newspaper in the country, USA Today.
Geithner’s departure is important because he has been the key figure in Obama’s first term White House opposed to an FTT. One book even went so far as to suggest that, were it not for Geithner, Obama would have backed Gordon Brown’s call for a Robin Hood Tax as far back as 2009.
What’s led to this shift? Well, it isn’t the Democratic platform for the elections this Fall, which promises progressive tax cuts in place of Republican tax breaks for the 1%. But ever since Occupy Wall Street put taxing the rich back on the American political agenda, life outside the Beltway has been inching towards an FTT as a way to put Main Street ahead of Wall Street, rebalancing the US economy, controlling speculation and curbing greed while releasing resources to tackle the US federal deficit and make the banks pay for their own bailouts.
The US Robin Hood Tax campaign is further from the political mainstream than the UK version, and far from the cross-party Christian Democrat/Socialist consensus in France and Germany. But the influential Americans for Financial Reform and the AFLCIO back the tax too, as do former neo-liberals like Jeffrey Sachs, billionaires George Soros and Bill Gates, and former financiers like Dr William Barclay, once senior Vice President of the Chicago Stock Exchange.
Some of the support for a Robin Hood Tax comes from the international development movement like Oxfam USA, and the US Friends of the Earth – like the unions, united around the world in favour of an FTT. Today, Business Week reported that “Friends of the Earth and Greenpeace joined 61 other charities, unions and campaign groups to urge U.S. Secretary of State Hillary Clinton to support a financial transaction tax to help fund the fight against climate change.”
But for others, its main attraction is as a way of putting Wall Street back in its box. As USA Today’s editorial put it:
“Slap a small transaction tax on rapid trades, impeding the practice and returning markets to their core purpose. That would be a big win for small investors, and the only people harmed would be those now putting everyone else at risk.”