About 2,000 labor, social justice, and other activists on April 20 rallied in Washington DC urging Congress to pass HR 1579, the Inclusive Prosperity Act by Rep. Keith Ellison. The Inclusive Prosperity Act would establish a small tax on financial transactions that would generate billions of dollars in new revenue that could be invested in public projects that rebuild America and create millions of new jobs. The financial transaction tax is known the Robin Hood Tax.
“In the world beyond the Beltway, people are still hurting. What they care about is not the debt ceiling or the fiscal cliff or the budget deficit. What they care about is the job deficit, the health care deficit, the housing deficit, the retirement deficit,” said Jean Ross, co-president of National Nurses United. “What people don’t need is more austerity, like more cuts, to Social Security, and other programs that help people. That’s why nurses for two years have been campaigning across the country for more revenue for our cities, our communities, our patients with a tax on Wall Street speculation.”
“Americans are fed up with the austerity agenda that leaves corporations with record low tax rates,” said George Goehl, executive director, National People’s Action. “We know where the money is. It’s not in grandma’s Social Security check, it’s not in our children’s classroom, and it’s not in the pockets of working class families. It’s on Wall Street, and it’s time for President Obama and Secretary Lew to step up to the plate and support everyday Americans by supporting the Robin Hood Tax.”
The Robin Hood Tax proposed by HR 1579 would be a small sales tax on speculative financial trades–0.5 percent on stock trades and a lesser percentage on other speculative activity. While the amount of the tax is low, it has the potential to recapture a substantial amount of wealth that hard working people helped create in the first place.
University of Massachusetts-Amherst economist Robert Pollin estimates that the Robin Hood Tax could generate as much as $300 billion a year in new revenue.
“Everyone shopping on Main Street today pays sales taxes when they buy things,” said Pollin. “It’s time for Wall Street traders to face up to similar obligations.”
The bill targets the wealthiest financial speculators and exempts households whose gross adjusted income is $75,000 or less.
If enacted, the Robin Hood Tax would discourage excessive speculation, the primary cause of the 2008 worldwide economic collapse that cost millions of people around the world their jobs and livelihood.
“Wall Street speculation has become a house of cards, a game of computer-driven bets on bets, far removed from real-world investments in real economic activity,” wrote Ralph Nader in a statement of support for Ellison’s bill.
“High-frequency trades are carried out at ‘blinding speeds,'” said Wallace Turbeville, former Goldman Sachs investment banker and a senior fellow at Demos. “To the point where 50, 60 or 70 percent are done by ‘robo-traders.’ This does not give value to the economy, it damages it.”
An analysis of the bill prepared by Rep. Ellison says that the Robin Hood Tax would make Wall Street begin to repay its debt to working people who bailed out the bankers when their speculative trades cratered the economy.
“The global crisis cost Americans $19 trillion in lost wealth,” reads the analysis. “American citizens provided the money to stabilize the financial sector. . . . The global financial crisis, along with wars, unabated and unaddressed climate change, unsustainable tax cuts, and a continuing unemployment crisis, if unaddressed, will deprive a generation of a meaningful role in the larger economy.”
The European Commission has proposed a financial transaction tax similar to the one proposed by Ellison. Eleven European countries have committed to adopting the tax proposed by the commission–Germany, France, Italy, Spain, Belgium, Portugal, Greece, Austria, Slovakia, Slovenia, and Estonia.
On Friday, George Osborne the United Kingdom’s Chancellor of the Exchequer, announced that he would take court action to block other European countries from implementing their financial transaction tax.
Owen Tudor, spokesperson for the Robin Hood Tax campaign in the UK, called Osborne’s action hypocritical because the UK itself has a financial transaction tax called the stamp duty that generates about $13 billion a year.
“This isn’t about defending British interests against Europe,” said Tudor to the Guardian. “It’s about defending one rather rich square mile (London’s financial district) against the wishes of people in Britain and across Europe. Not content with letting our banks off scot-free, Osborne now wants to prevent European countries from making financial sectors pay to repair the damage done by the financial crisis.”