Friday, February 12, 2010
A movement calling itself the “Robin Hood Tax” wants world leaders to tax banks and other financial institutions that gamble with speculative investments, the kind helped bring about the 2008 economic crisis. Supporters of the tax claim it could raise $400 billion annually, which would help fund public services, aid the poor and fight global warming. It would also discourage Wall Street from taking too many risks in order to avert future meltdowns.
The Robin Hood Tax is similar to other proposals offered by leading economic institutions in the wake of the 2008 crisis. The European Union favors the imposition of the “Tobin Tax” designed to discourage reckless behavior by financial institutions. Named after Nobel Prize-winning economist James Tobin, the Tobin tax was written off in the 1970s as impossible to impose because technology then could not properly account for derivatives trading. But advances in computers and software now make such a levy possible, supporters argue, They propose that the tax amount to .005% to 1% per trade.
Meanwhile, the World Economic Forum, backed by the International Monetary Fund, has expressed support for a levy to create a rainy day fund that would bail out banks the next time the need arises.
-Noel Brinkerhoff
Video: Robin Hood Tax (YouTube)
The Big Idea (RobinHoodTax.org)
Taxing Wall Street Gambling Transactions (by Noel Brinkerhoff, AllGov)
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