October 26, 2011
Pope Benedict and Bill Gates play Robin Hood for the G20
The next summit meeting of the leaders of the G20 nations takes place next week in Cannes, and the global financial crisis is top of the agenda. A variety of people from around the world are pressuring the G20 leaders to introduce a "tax on bankers". Such a tax has been discussed over the years under a variety of aliases, including "Tobin Tax" and "Financial Transaction Tax". However here in the UK currently the most popular euphemism for the idea is "Robin Hood Tax". Here's a video in which the team of Richard Curtis and Bill Nighy (of Love Actually fame) present their interpretation of the concept:
Richard and Bill aren't the only supporters of such a tax by any means. Nicolas Sarkozy is keen on the idea too. A couple of months ago the Daily Telegraph reported Mr Sarkozy as saying that:
The French and German ministers will table a joint proposal at EU level next September for a tax on financial transactions. This is a priority for us.
Nicolas even went so far as to ask Bill Gates to investigate the Robin Hood tax further for him. Having done so Bill says he likes the idea as well. According to Reuters:
In a report presented to a meeting of G20 ministers in Washington, the billionaire philanthropist proposed taxing financial transactions, tobacco, and shipping and aviation fuels.
Now this week the Vatican has also expressed the view that taxing the rich in order to give to the poor is an idea whose time has come:
The good thing about crises is that they are moments of great opportunity. The global financial crisis is an opportunity to reform the architecture of the global financial system, and strengthen the European Union in terms of harmonization of fiscal policies.
The only fly in the ointment is that at the last count Barack Obama and David Cameron didn't seem to be nearly so keen on the concept as Pope Benedict XVI and messrs Sarkozy and Gates. Neither is the Swedish finance minister Anders Borg. According to the BBC, when Sweden introduced a financial transaction tax in the 1980s things didn't go well. Mr. Borg told them that:
Between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London. We are basically taxing growth away from Europe, and that is not a very good idea. The impact was basically that we did not get any tax revenue. It brought in very little tax money while moving most of the businesses outside of Sweden. We abandoned [the tax] because it was a very, very bad functioning tax.
If such a tax were introduced across Europe, perhaps Mr. Borg's prediction for the BBC would come true?
The fact that the US has said it has no intention of introducing a similar tax, means that firms would be free to move to other financial centres.
No doubt that is why, again according to the BBC, that:
The UK has been vocal in its opposition to the tax proposed by the European Commission earlier this week. A spokesperson for the UK Treasury said it would "absolutely resist" any tax that was not introduced globally.
All in all in sounds as though the G20 leaders should pencil into their diaries plenty of time to debate this evidently contentious issue next week in the South of France. I wonder how much taxpayers money it takes to fund a years worth of events such as this? How much would be left out of £50 billion after covering that bill, always assuming Anders' predictions are overly gloomy?
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