Bill Gates backs Robin Hood Tax
A report prepared for G20 country ministers and officials – a copy of which the TUC has seen – summarises the key findings of the report Bill Gates will make to the G20 leaders summit in Cannes at the beginning of November. It says he will back a financial transactions tax (FTT), although acknowledging that the idea is controversial, and without going into detail about how such a tax would operate.
The Gates report will say substantial resources could be raised with a fairly small tax rate, and that it could be implemented unilaterally or by small numbers of countries. The report has been leaked ahead of Friday’s meeting of G20 Finance and Development Ministers in Washington DC.
This is a huge win for the Robin Hood Tax campaign around the world, and will put FTTs at the heart of the G20 debate over the next few weeks – alongside the EU’s consideration of the proposal.
And as Larry Elliott says in the Guardian, the document – which is quite complimentary about UK government overseas aid policy both in scale and direction – puts increased pressure on George Osborne to drop his opposition to an FTT. The campaign for a Robin Hood Tax is moving up a gear: the TUC Manchester for the Alternative protest that greets the Conservative Party Conference just days before EU Finance Ministers meet to discuss detailed plans for a European FTT puts the tax at the head of its list of demands.
Here is the key paragraph of the report in full (we’ve indicated a apparent omissions in the report, using square brackets):
Bill’s report will talk about the potential for new revenue measures, some of which have been under active discussion in the G20. A financial transactions tax has been supported by some governments of the G20 and a wide range of civil society groups, but opposed or greeted skeptically by others. The report will acknowledge the controversy around the proposal, but is unlikely to go into the detailed analytical merits, for example, with respect to different approaches to optimal taxation of the financial sector, but will make the case for a substantial allocation to development. It will note that FTTs of various kinds […] India and the UK, and therefore seem to be feasible even without universal adoption. If G20 members or some other set of countries (e.g., within the EU), can agree on the outlines of an FTT, Bill’s report is likely to argue, it could generate substantial resources. For example, some modeling suggests that even a small tax of 10 bp on equities and 2 bp on bonds would yield about $48 billion on a G20-wide basis, or $9 billion if confined to larger European economies. Some FTT proposals offer substantially larger estimates in the $100-250 billion-dollar range, especially if derivatives are included. If a substantial part of the revenues could be allocated to development, this would be a useful addition to resources—and would be additional help to some donor countries to meet their aid commitments in the current environment. Of course, to the extent that some countries applying the tax would use part of the proceeds to fund aid commitments they have already made, the revenue would be part of the aggregate aid increases already discussed, rather than incremental to them.