ACTION ALERT: Tell Harper and Flaherty to support a Robin Hood Tax – We need bold financial reform now!

June 1, 2010

With the G20 summit in Toronto only three weeks away, pressure is mounting on the Harper government to drop its resistance to a financial transaction tax and to join other international leaders who are open to bold financial reforms – not more of the status quo, boom and bust chaos caused by under-regulated financial markets.

Former British Prime Minister Gordon Brown, German Chancellor Angela Merkel and French President Nicolas Sarkozy have all stated their support for a tax on high value financial transactions, as have many renowned economists and financial experts. But Canada is using its position as co-chair of the G20 this year to try to block these kinds of truly bold financial reforms, such as the Robin Hood Tax.

The Council of Canadians rejects the G20 summits as an illegitimate venue for tackling global financial, economic or climate issues. These discussions should be happening more democratically, perhaps facilitated by the United Nations as the expert panel on financial reforms headed by Joseph Stiglitz recommended in mid-2009. Nonetheless, an agreement among major financial powers on a global financial transaction tax would be a popular and effective way to raise money for all kinds of social needs that are not being met under the current global economic system.

What is the Robin Hood Tax, or Financial Transaction Tax?
The Robin Hood Tax is a tiny tax on banks, hedge funds and other finance institutions that would raise billions to tackle poverty and climate change, and support social services at home and abroad. The tax must be distinguished from a simple bank levy supported by the International Monetary Fund (IMF), which would collect money from financial institutions for future bailouts, and a financial activities tax (FAT tax), which would skim off the profits of banks and bankers with the money going to government coffers.

All three options are on the G20 table in Toronto because of pressure around the world to cool down rampant speculation, which wreaks havoc on local economies, communities and workers. Of the three, the bank levy is the worst because it doesn’t redistribute any of the enormous wealth created through financial activity. But Harper doesn’t like any of these proposed taxes, despite how much we could do with the proceeds!

The Robin Hood tax could be as low as 0.005 per cent – and average 0.05 per cent . But when levied on the billions of dollars moving around the global finance system every day through transactions such as foreign exchange, derivatives trading and share deals, it can raise hundreds of billions of dollars every year.

As Council of Canadians Director of Campaigns Brent Patterson wrote on April 5, this tax “would generate $400 billion Cdn a year. A fraction of that amount – some $10-$30 billion a year – could provide clean drinking water to half the 1.1 billion people around the world who need it.”

Some 350 economists in more than 35 countries recently signed a letter to the G20 calling for the Robin Hood tax, including Jeffrey Sachs. His column - ‘Robin Hood tax’s time has come’ - can be read here.

While an international agreement is best, there is nothing stopping national governments, including Canada, from adopting national financial transaction taxes (or the FAT tax on bank profits) as a way to support social services and job creation measures at home while increasing development and contributing to Canada’s climate debt to the global South.

The Canadian barrier to bold, systemic reforms
Where the globalized economy and global finance has created instability and inequality, the Robin Hood Tax is about fair redistribution and a recognition that with wealth comes responsibility. Trickle down clearly does not work unless there is a mechanism to force the money to where it is needed most: public services, climate mitigation and green job creation at home and abroad. The tax would also effectively cool down global financial flows and discourage the wild ups and downs stock markets have experienced for the past 30 years under neoliberalism.

Unfortunately, Prime Minster Harper is one of a few world leaders lobbying hard to take the Robin Hood Tax off the table, at the G20 or any other venue. He’s shamelessly lobbying on behalf of Canada’s banks who don’t feel they should be “punished” because other banks have managed money poorly.

But the tax is not a punishment! It is a responsibility of the very wealthy to shoulder the burden of the very poor – it is a tax whose time has come.

TAKE ACTION

Send an email to Prime Minister Stephen Harper and his finance minister Jim Flaherty urging them to support the Robin Hood Tax at the G8 and G20 Summits this summer in Canada. You can use the action alert on the At the Table campaign website: http://robinhoodtax.ca. Tell the Prime Minister how you think the Canadian and international governments could use the billions of dollars raised through the financial transaction tax.