It’s been promoted by everyone from Bill Gates to the Archbishop of Canterbury and the Pope, but what is the so-called Robin Hood Tax all about? Alex Blackburne has the answers.
Styled as the tax which, like the folkloric Nottinghamshire outlaw from which its name derives, ‘takes from the rich and gives to the poor’, the Robin Hood Tax claims it will generate potentially billions of pounds to be used in the fight against global poverty.
It would do this by placing a relatively small tax – a meagre 0.05% – on all financial market transactions in the UK. The general public, won’t be taxed a penny. Well, not extra anyway. It’s all focused on transactions made by banks and financial institutions.
Actor Bill Nighy, star of such films as Love Actually and Pirates of the Caribbean, is a self-proclaimed supporter of the Robin Hood Tax. He fronted an advertising campaign for it last year and told the audience at a 2010 RSA event,
“It seems to me a very simple and beautiful idea, which has really, to use a cliché, found its time. It’s pristine – there’s nothing wrong with it.
“I’m also accustomed to the phenomenon of people telling me and us that it’s unworkable or impossible, and then things do change, and peoples’ lives are saved and revolutionised by what seems to be a simple idea – too simple to be true, but in fact it’s that good.”
The money collected by the tax – which would likely be well into the billions of pounds – would go towards tackling poverty in the UK and abroad, as well as in the battle against global climate change.
“Why tax the financial sector, though?” I hear you ask. The Robin Hood Tax website provides a frank, yet honest answer to that.
“Because it’s responsible for a big part of the mess we’re in”, it reads. That’s why.
The proposed tax, which is also sometimes called transactions tax or the Tobin Tax, after economist James Tobin who came up with a similar taxation idea in the 1970s, does have its critics though.
Philip Booth, editorial and programme director at the Institute of Economic Affairs (IEA), dubbed it ‘impossible’, before warning the public about the potentially harmful consequences.
“By the EU’s own estimates it would probably raise no money [and] would divert resources from the nation states to Brussels. If the transactions tax is successful at undermining financial markets, we could all end up paying more tax as wealth is destroyed and the transactions tax eats away at its own base.”
While Booth’s stance may well have some substance, the IEA styles itself as a free-market think-tank, which writes volumes about the benefits of unfettered capitalism and the dangers of government spending of any sort, so they’re unlikely to be in favour of any form of taxation.
All new taxes have their detractors, often those who have to pay them, and the Robin Hood Tax certainly has its fair share, but a policy which has been publicly praised by Bill Gates – the multi-billionaire philanthropist behind Microsoft – and the Archbishop of Canterbury – a man of enormous social knowledge and experience – certainly shouldn’t be overlooked.
Picture Source: Emil Stefanov