I’ve blogged a few times on the momentum building behind the introduction of a Financial Transactions Tax (see here). Today it steps up a gear with the launch of international campaign calling for a ‘Robin Hood Tax’ (much more memorable!), with the full campaign repertoire – op-eds, a letter signed by 350+ economists, a dedicated website with lots of background materials, and a great youtube (see below) with Bill Nighy playing the quintessential shifty banker. Declaration of interest – Oxfam is a core member of the campaign.
The basic backgrounder is here, and there will doubtless be a lot of arguments around the numbers and feasibility of the tax, which the campaign reckons could raise hundreds of billions of dollars a year to put into development, combating climate change, and filling the fiscal holes in Europe and the US.
I will blog on those debates as they unfold, but stand back for a moment and I think there is a bigger picture here. Since the early 1970s, the financial sector has been growing at a phenomenal rate – the volume of financial transactions is currently running at about 60 times the size of global GDP. With that growth has come volatility and crisis – when a beast that size shivers, the real economy catches cold. It was surely inevitable that at some point, that sector would come to be properly regulated and taxed (i.e. beyond that residual level of corporation and income tax that the bankers fail to avoid). The introduction of other kinds of taxes suggests that is most likely to happen after a shock (e.g. an income tax was introduced in Britain in 1798 to fund Britain’s war with France).
So we have the tectonic build up of pressures and problems and the shock (in the shape of the fiscal trauma inflicted by staving off a global recession) required to shift institutions and politics – that is how change of this magnitude often happens. Whatever the detail of the debate, it feels like taxation of the ever-growing financial behemoth is long overdue.