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Tax on Financial Transactions - Now?


From: Stimmen der Zeit, 2/2012, P. 73 et sequ.
webmaster's own, not authorized translation


In Germany, the campaign Taxes against Poverty began on 17 October 2009. In an open letter to the Federal Government, a total of 32 organizations and eight individuals demanded a tax of 0.05 percent on all speculation relevant financial transactions. Its proceeds are to be used to combat national and international poverty and to protect climate and environment. This initiative was inspired by considerations that go back to the economists John M. Keynes and James Tobin ("Tobin Tax"). The anti-globalization NGO Attac has been demanding such a tax since 1998 - but without any significant response.

The campaign Taxes against Poverty on the other hand experienced a breakthrough: within three weeks 55.000 citizens signed a petition to the German Bundestag, and put thus the issue on its agenda. It is now supported by 88 organizations - from Adveniat to DGB and political parties - and 16 individuals, including bishops, bankers and scientists. In February 2010 the British Robin Hood Tax Campaign was founded. It popularized this concern in the English-speaking world. The demand of the campaign is now made in more than 30 countries around the world. In November 2011 also the Occupy Wall Street movement has taken it over.

What sort of dynamism is the reason for the success of this international civil society movement? Three factors may play a role: First, many citizens are disappointed by the fact that financial market actors privatize profits. They make the public pay for the losses whereas they continue to reap bonuses and profits. Second, the realization that not only the rich countries suffered from the financial crisis and the speculation contributing to it, but also the poor countries; with the result that the number of hungry people around the world surpassed the one billion mark. Third, the realization that the world faces major challenges with regard to the preservation of global public goods, as e.g. drinking water, forests and climate, which cannot be mastered without adequate financial expenses, and that the financial sector, which moves every day gigantic sums, until now does not recognizably take its share of this burden.

The best opportunities for the introduction of a financial transaction tax are currently in the EU or the euro zone. At the end of September 2011, the EU Commission presented the respective legislative proposal, including the timetable. The strongest opposition comes from Great Britain, where the government is under massive pressure from the financial institutions, and therefore intends to support such a tax only if it is levied globally.



However, if you would always wait with all the good ideas until all parties are ready to implement them, many things would not at all come into being, or, due to the obligation to make compromises, they would be so watered down that they would be ineffective. So why shouldn't the EU or the euro zone set a good example, and invite others to join them? Also the Anti-Personnel Mine Ban Convention or the Kyoto Protocol were only in this way set in operation.

However, the growing support for the introduction of a financial transaction tax conceals the problems regarding the use of the revenues: the enthusiasm of many governments for the tax is due to their intention to use the proceeds to reduce debt or to create reserves - in anticipation of the next banking crisis. While other governments (e.g. France), the civil society and most opposition parties insist on using at least a substantial portion of the proceeds for the original goals of the campaign.

It will be interesting to see how the initiative will develop in 2012. In November 2011, the G20 summit in Cannes confirmed: there is little hope that an agreement can be achieved with the countries with an Anglo-Saxon financial system. The statements of important emerging countries such as Argentina, Brazil or South Africa were more promising. There the willingness to participate in such a policy is growing. And it should not be underestimated that the demands of the campaign are supported by a growing number of global players, as e.g. UN Secretary General Ban Ki Moon, the African Union, the International Trade Union Confederation and the Catholic and Anglican Churches.

But also in Germany there is still much to do: It is an irony of politics, that just Federal Minister Dirk Niebel, whose budget would benefit most from the required increase in revenues, is one of the fiercest opponents of the tax. It is equally regrettable that now more than 370 members of the Bundestag, of all political groups, have stated in the so-called "development policy consensus" to fulfil until 2015 the 40-year old promise to spend 0.7 percent of gross national income on development aid. But despite this large parliamentary majority, they have not managed to get the concrete process really going as regards the budget deliberations. If they really seriously wanted to do this, from now on an annual increase of 1.2 billion euros in the development budget would be required. It would also have been a signal that the Bundestag shares the optimism and determination of the First Parliamentary Secretary of the CDU / CSU parliamentary group, Peter Altmaier. He declared on 9 November 2011, "Before the next year is over, we will get FTT!" By then at the latest, the revenues from this "innovative financial instruments" would be available.

Despite all these successes there is therefore no cause for rejoicing but certainly for reasonable optimism, though admittedly a lot of hard work needs still to be done.


Link to 'Public Con-Spiration for-with-of the Poor'