A new campaign has just launched in the UK to build support for a tax on financial transactions called a Tobin tax (named after the American economist who proposed the tax in the 1970s James Tobin). Taking inspiration from the legend of Robin Hood, the medieval bandit who conducted his own brand of wealth redistribution, the campaign calls for a Robin Hood Tax.
The idea behind a Tobin tax is very simple concept that could raise hundreds of millions, if not billions, of dollars to go to alleviating poverty, mitigating climate change, curing diseases the list goes on. The idea works by charging a 0.05% tax on speculative transactions. As many thousands of these happen every day this would rapidly raise huge amounts of money.
A speculative transaction is one that has a typically very high risk of not returning the original investment. This is the type of financial transaction that was involved in the collapse of many banks recently – the buying and selling of debt is one of the most common forms of speculative transaction.
This latest initiative in the UK has given a huge boost to global Tobin tax campaginers. The Tobin tax was proposed by the UK and France at the UN Climate Change summit in Copenhagen last December as a way to raise the money needed to help developing countries to leap-frog carbon intensive development and go straight to renewables.
There are campaigns all over the world calling for the introduction of a Tobin tax as it needs to be implemented on a global scale. To find out where your nearest campaign is check out the Tobin Tax Campaign website.