Bank levy and/or Robin Hood Tax? FT supports one, ignores the other
The Financial Times’ lead editorial today says that a global financial transactions tax is a non-starter, and then goes on to explain all the problems with a global bank levy – almost all of which would be solved by a global financial transactions tax. It ends, spilling the beans, by attributing to cynics the idea that the banks “have calculated that if they must concede something, insurance is the least-worst option.” I must be a cynic then, because that’s precisely what I wrote when bank levy fever swept Davos last month! And the Robin Hood Tax campaign launched this week (covered by almost every major news outlet apart from the Financial Times) will ensure that a financial transactions tax is anything but a non-starter.
The FT approach is odd, and seems designed less to inform their readers in the City than to comfort them. It doesn’t actually help top financiers not to know that a mass, popular campaign supports a financial transactions tax (FTT). Nor does describing the idea as a non-starter. The editorial starts off by suggesting that Gordon Brown’s proposal of an FTT last November isolated him – but in fact he was coming into line with the views of France and Germany’s leaders (as well as the Austrians, Brazilians, Ethiopians etc). That the FT dismisses any views other than those of the IMF and Tim Geithner may describe their prejudices accurately, but it’s sloppy reporting at best.
Second, the arguments for an insurance levy (which we support by the way – it’s just not the complete answer) which the FT advances apply equally to an FTT, but the drawbacks identified do not. The FT says that there may be technical difficulties with a levy (far more, certainly, than a tax on the now entirely computer-based financial transactions), but that it has been managed in countries like Sweden, so is feasible (there are financial transactions taxes in at least 14 economies, too – including the UK’s stamp duty on share transactions). As a downside, the FT recognises that a bank levy would not be big enough to address all the problems caused by the global financial crisis – well, precisely. That’s why an FTT is necessary – its contribution of up to $450 billion a year would go much further towards dealing with the damage banks caused to everyone else, as well as their self-harm.
The Robin Hood Tax, which now has support from 66 organisations (including unions representing finance workers and tax inspectors as well as Greenpeace and the Salvation Army), is here to stay, and won’t go away, no matter how much the FT ignores us. Of course, people in the big banks already know this despite the FT’s silence. That’s why a Goldman Sachs banker tried to fix the vote on the Robin Hood Tax website on launch day. So that’s what their obscene bonuses are for – childish pranks and vote rigging!