We Need a Global Tax on Financial Speculation
British Prime Minister Gordon Brown unveiled an eminently sensible proposal this week: to place a 50 percent tax on all bankers’ bonuses in his country. But another, even more sensible idea of his last month was shot down by other nations, notably the United States.
This is a global tax on speculative financial transactions, also often called the “Tobin Tax” after the Nobel-winning economist James Tobin, who first came up with the idea. The notion has been around since the 1970s in one form or the other (I have a decade-old poster for the tax up in my office), but Brown deserves credit for attempting to resuscitate it. “Calculations by the Austrian government, which is keen on a transaction tax, showed that even if the number of deals fell by up to 65 percent as the fee dissuaded people from unnecessary trades, it could still raise $700 billion a year,” writes Heather Stewart in the London Observer.
But even Brown’s modest proposal was enough to invite a very public rebuke from across the Atlantic. “That's not something that we're prepared to support,” said Treasury Secretary Tim Geithner. With assistance from the IMF, the stalking horse of the United States, and Canada’s conservative government, the Obama Administration succeeded in strangling the idea in its crib, in spite of the fact that President Obama had earlier suggested that he was open to the notion. Germany and France have also voiced interest in such a proposal, but even their backing wasn’t even enough to prevent Brown from being humiliated on the international stage.
The Tobin Tax is an idea whose time is past due, however. As Brown pointed out, the social contract between the bankers and the rest of society has broken down over the past year. With their completely irresponsible actions in the mindless pursuit of profit, the denizens of the financial sector have led the entire world to the brink of the abyss. And the social costs have been much more staggering than most people can even imagine. The Harper’s Index from the June issue of the magazine quotes a World Bank estimate that 1,400,000 infants will die in the next seven years due to a global economic crisis caused essentially by the insatiable greed of financial wheeler-dealers.
And why shouldn’t we demand something back in return when we have spent so much in bailing out these fat cats’ behinds? Again, the public perception of the cost is far from the actual truth. In a superb piece for The Nation, Nomi Prins and Christopher Hayes calculate that if you factor in the entire range of handouts and subsidies the government’s various entities have doled out to the financial sector, the total bailout is $17.5 trillion, not the $700 billion TARP figure that is commonly quoted.
Apart from helping set up a fund for future bailouts and improving the balance sheets of governments, a Tobin Tax could also ameliorate the plight of the global poor and disadvantaged. In fact, this was what the tax was originally envisioned for.
Critics of a Tobin-type global tax say that it is too complicated to impose and too easy to evade. But Nobel-winning economist Joseph Stiglitz (whom I had the privilege of interviewing earlier this year) has said that this isn’t true due to the advent of modern technology. “The financial sector polluted the global economy with toxic assets and now they ought to clean” up, Stiglitz said.
House Speaker Nancy Pelosi has indicated her approval of such a global tax, and Representative Peter DeFazio and Senator Tom Harkin have recently co-introduced a bill that will impose a 0.25 percent transaction tax on the U.S. financial sector with the aim of raising $150 billion for deficit reduction and social programs.
“We need a shift in priorities in this country to ask not what America can do for Wall Street, but ask what Wall Street can do for America,” said Harkin.
We need to make this bill a reality in the United States—and then take it worldwide. It’s high time that the global financial sector contributed its fair share to society.
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Comments
This all sounds so reasonable and necessary, but
let's probe into this somewhat; shall we?
What would the monies from this Tobin Tax be used for?
And when you say Global Tax, I assume the Money would be paid to some Entity of Global Scale.
Would that be the IMF or the World Bank? Who in turn are controlled by whom? Perhaps the Bankers along with other Creatures of Wall Street and Global Corporate Financial Interest?
Since you mentioned, in a positive light, the World Bank --
Let's look at the current President of that institution. See if we can draw a picture here.
Robert Bruce Zoellick (pronounced /ˈzʌlɪk/; born July 25, 1953) is the eleventh president of the World Bank, a position he has held since July 1, 2007. He was previously a managing director of Goldman Sachs, United States Deputy Secretary of State (resigning on July 7, 2006) and U.S. Trade Representative, from February 7, 2001 until February 22, 2005.
Goldman Sachs -- Hmm -- where have I heard that name?
And the World Bank's grave warning -- "a World Bank estimate that 1,400,000 infants will die in the next seven years due to a global economic crisis caused essentially by the insatiable greed of financial wheeler-dealers."
Coming from Goldman Sachs Cronies -- that is Rich, indeed.
So the idea is to punish and reel in Wall Street, with a tax to be controlled by the higher levels of the same.
This is Ludicrous.
Mr. Pal -- you should know who is behind this move for Globalism and One World Control. It is the same people you guys, justly yet hypocritically, proclaim as the Enemy.
And to answer my initial question, these monies would be used to further develop a control grid of "Hitlerian Proportions" on a Global Scale.
I say sir, you can go to hell with these sort of ideas -- we ain't buying it.
You are either an Idiot, perhaps of the useful sort, or a willing Dupe.
Coincidence, that this little piece of yours, comes on the heels of ClimateGate and a realization that a Global Carbon Tax, paid to the same, is in danger of collapse, and you guys may have to be shopping around for another means and mechanism of Global
Control?
Give me back the days, when Progressives were supposed to stand against the "Robber Barons", back before the "Robber Barons", bought the entire movement.
But hats off to you, on the clever reasonable arguments, such as the following --
"And why shouldn’t we demand something back in return when we have spent so much in bailing out these fat cats’ behinds? Again, the public perception of the cost is far from the actual truth. In a superb piece for The Nation, Nomi Prins and Christopher Hayes calculate that if you factor in the entire range of handouts and subsidies the government’s various entities have doled out to the financial sector, the total bailout is $17.2 trillion, not the $700 billion TARP figure that is commonly quoted."
"Apart from helping set up a fund for future bailouts and improving the balance sheets of governments, a Tobin Tax could also ameliorate the plight of the global poor and disadvantaged. In fact, this was what the tax was originally envisioned for." --------------------------
It is refreshing to hear the truth -- the figure
is 17.2 Trillion and rising -- rest assured these "Fat Cats", knew exactly what they were up to.
And, about the plight of the Poor --
We heard this same story, as reasoning for the Creation of the IMF and World Bank -- Great job, so far.
Today, if you to check into it, we have mass starvation as close as Haiti, with people eating "Mud Pies", made from real dirt, as filler, due to their inability to afford grain, caused mainly by this fake "Green Movement", fully supported by the World Bank, with the conversion of Food Crops into "Bio Fuel", resulting in the doubling of Global Food prices and concurrent mass starvation on a Global Scale.
This, however, goes unreported by the Global Corporate owned Mainstream News Networks, where we do get to hear a constant dribble about, "Going Green" and "Saving the Planet" from CO2, as the World's oppressed starve.
Then we get to hear about "Cap and Trade", a system
where a tax will be paid to the same entities that
are responsible for the actual Raping of the Planet.
And this is supposed to Save us?
These "Fat Cats", you connive to give more control to, do not give a "Sh*T" about the World's Poor, and, in Reality, Global De-Population is foremost on their "To Do" list.
All this while, the Environmentalist and Progressives, seemingly lap this BS up from the Palms of the Corporate Globalists hands.
A continuing Mantra of, "We got to save the Earth -- to hell with the poor -- too many people are oppressing the Goddess Earth's Bosom".
"Global Tax -- Yes, My Pretties --- a Global Tax is the Answer".
Better hope you guys come out on top -- otherwise,
I think some 21rst Century version of Nuremberg Trials might be in order -- yes, I am talking "Crimes Against Humanity".
In short, Mr. Pal --- I am calling you out, as
a "Corporate Globalist Stooge".