Transcript Financial Transactions Taxes (aka Financial Speculation

Financial Transactions Taxes
(aka Financial Speculation Taxes, Robin Hood Tax, etc.)
Sarah Anderson, Institute for Policy Studies
Climate Finance Meeting, Feb. 23, 2010
What is it?
Very small tax on each trade of all types of
financial assets, including:
• stock
• derivatives
• options
• currencies
What’s the Goal?
Twofer:
1) drop in excessive short-term speculation that
can lead to bubbles
2) revenue for good things, like health, climate,
and jobs programs
How much money could be raised?
• US: > $175 billion
(source: CEPR, based on tax rates ranging from 0.01% on currency
transactions to 0.25% on stock trades, and assuming a 50% drop in trading
volumes)
• Global: $400 billion.
How would it be collected?
Can be done unilaterally or globally, with no new institutions.
• Stocks and derivatives traded on exchanges: can be collected by
the central counterparty at the point of the trade, or automatically
in the clearing or settlement process.
• Over the counter trading: can be collected at the point of clearing
or of settlement.
• For technical details, see work of Rodney Schmidt, North-South
Institute.
In 2002, IMF managing director said obstacles
were “political, not technical. “
Who’s behind it?
• Leaders of three largest European economies
– UK, Germany, and France
• Russia (at least on currency transactions)
• Japanese Finance Minister (as of 2/15)
• Noted business leaders and economists (e.g.,
Stiglitz, Krugman, Soros, Bogle)
• Celebrities (Richard Curtis and Bill Neighy)
Where is Obama?
• No definitive public position.
• In November, Geithner was put on the spot by Brown
and said they “weren’t prepared” to support FTT.
• Obama promoting a fee on the top 50 banks, which
advisors privately say is their preferred alternative.
• Proposed fee wouldn’t directly affect speculation,
would leave hedge funds off the hook, and would
generate far less revenue.
Strategic Opportunities in 2010
International
• March16-17: UN High Level Dialogue on
Financing for Development
• April 23: G20 Finance Ministers meeting in
Washington (IMF will deliver draft report)
• June 26-27: G20 Leaders Summit in Toronto
(link to cyber petition?)
US Congress
• Harkin/DeFazio bills: revenues dedicated to
domestic job creation and deficit reduction
(28 House, 3 Senate co-sponsors)
• New legislative vehicle for international needs
in process: would target spot foreign exchange
transactions, which are not covered by
Harkin/DeFazio (estimated revenue: $7-15 billion)
Campaign organization
• US: [email protected] Calls usually
every Wed. am. (contact: [email protected])
• International: [email protected]. Calls every two or
three weeks, as needed. (contact:
[email protected])
• DC face-to-face campaign strategy meeting –
date.