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Robin-Hood-Tax

The Guardian has the best description of this very desirable tax based on the Tobin Tax idea. Bill Nighy looks wonderfully shifty in the famous video.

Joseph Stiglitz, professor of economics at Columbia University: “A tax structure that does not reward short-term, very speculative gains would be good. If you were investing for a year or five years or 10 years it would be a small tax but if you were holding it for just one minute it becomes a very high tax. The important question is implementability. It’s designed to tackle high frequency activity for which it is hard to find any societal benefit. The only question is, can it be effectively implemented? Will it be circumvented? There’s a growing consensus it can be implemented, if not perfectly, effectively enough to make a difference.”   (link to article and video)

Posted in Money Systems, News.

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One Response

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  1. Adrian Wrigley says

    I cannot enthuse about a “Robin Hood Tax” which I don’t really understand. Who is the spending power taken from?

    The arguments are presented in glowing terms, stating how much spending power would be obtained. But is very light on detail about the economic response and the ultimate bearer of the tax.

    It’s clear that the spending power can’t be taken from the financial sector, since it doesn’t create any spending power to take. So the spending power must come from somewhere else. Most likely it will come from savers and investors of one sort or another. Businesses (shares) will be reduced in market value, land (house) prices will be reduced, and interest rates paid to depositors will fall. Some of the spending power will be taken away from other taxes (eg Corporation and Income tax).

    The transaction volumes will be curtailed sharply and transaction spreads to the public will widen.

    On the positive side, labour demand will be cut in the financial industry, promoting a transfer of top mathematical talent into productive industry. I envisage continued high bonuses in the sector of reduced size. The economic cost of much of the frequency trading (staff, modeling, software etc) will be saved as turnover tumbles.

    On the negative side, it represents an expansion of state power as the private sector is further drained of vitality. It is an attempt to expand the tax taken for a new sink for public funds.

    A far better way to help cut the size of the finance industry would be to introduce a Land Value Tax (LVT) and to nationalise the money supply. Doing this would remove the fuels which drive the bloated, parasitic finance industry – land rent and money issuance.

    The Robin Hood Tax proposals address the right industry (finance) in the wrong way (through transactions). Transactions are not the problem. The problem is the industry subsidy through the state-granted credit creation privilege. By further diverting attention away from the key issues the campaign does the public a disservice.