The Robin Hood Tax: A Powerful Antidote to Austerity
Last week, nurses rallied, bank staff marched, conservatives coalesced and finance professionals petitioned—all in support of a global tax on Wall Street speculation. You wouldn’t know it from the headlines (Financial Times: “Push for EU-wide ‘Robin Hood Tax’ ends”), but by week’s end, that elusive goal was closer than ever.
“We don’t just advocate for people when they’re ill, and we don’t just advocate for them when they’re in the hospital,” says Jean Ross, a registered nurse and co-president of National Nurses United, the country’s largest nursing union. “We have to have a society where they can get well and stay well.”
As I’ve written before, the financial transaction tax (FTT) is a good idea whose time has come. By assessing a modest fee on transactions, we can raise revenue from those who can afford it while discouraging the unproductive speculation that puts our economy at risk. And frankly, Wall Street owes us. The tax offers an antidote to austerity and a rallying cry that hard-core occupiers, Democratic senators, and reality-based conservatives can all get behind.
Consider the coalition of European Union countries backing the tax, led by new French Socialist President Francois Hollande and German conservative Angela Merkel. “We are behind where the state of the debate is in Europe,” says Sarah Anderson, who directs the Global Economy Project at the Institute for Policy Studies. Though European conservatives peddle austerity, says Anderson, they have “more of a clear understanding that governments need to raise revenue, and that this is a practical way to do it right now, when there’s such a crushing need.” While media reports have focused on the majority of EU countries that didn’t get behind the FTT at last week’s European Commission meeting, Anderson says proponents’ immediate goal was always to pull together enough countries for what the EU calls “enhanced cooperation.” They needed at least nine nations; they now have ten. Anderson expects successful implementation and new revenue in those countries will shift the debate for the holdouts, including the UK and the USA.
Anderson says some European officials were moved by support she helped corral from a perhaps-unexpected source: financial professionals. On Thursday, 52 of them released a letter endorsing an FTT. The signers range from former heads of European banks to former managing directors of JP Morgan. They wrote that the “primary role of financial markets is to raise investment, allocate resources efficiently, and mitigate risk. However, much of today’s financial activity does not contribute to these goals” and will actually “drain liquidity in stressed markets when it is needed most.” By discouraging such transactions, “a modest transaction tax will actually improve the functioning of markets.”
That elite endorsement is backed by grassroots firepower. On Wednesday, US “Robin Hood Tax” backers launched a new wave of activism, with progressives packing hallways outside Jamie Dimon’s congressional hearing, confronting JP Morgan Chase headquarters, and rallying outside Chase Banks in fifteen cities. New York activists put Robin Hood masks on the city’s most famous statues. National People’s Action demonstrated in front of Tim Geithner’s house. (Meanwhile, Catholic “Nuns on the Bus” were on the a cross-country tour exposing the social costs of Paul Ryan’s austerity budget.)
In DC on Wednesday, nurses were joined by activists from groups including Jobs With Justice, Occupy our Homes, and the National Organization of Women. The day before in Brazil, they were joined by activists from around the world. Outside the UN’s Rio+20 conference, unions and NGOs made the case for the FTT at a People’s Summit, and then thousands took to the streets. Among them: Brazilian Bank workers, Quebec students wearing red squares, and a leader of the Brazilian Workers’ Party, who headed from the march into the legislature, still wearing his Robin Hood hat. “It was very reaffirming” says Ross, “to know that we’re on the right track, and we’re not in this alone.”
Anderson says that the struggle for an American FTT may come to a head at year’s end, as Congress faces the planned expiration of the Bush tax cuts and the looming trillion-dollar cuts set in motion by the debt-ceiling deal. She believes grassroots energy, and the European example, can force the common-sense FTT into the coming budget debate.
But even if an FTT tax gains traction here, NNU expects a struggle over what to do with the new revenue. Executive Director RoseAnn De Moro notes media reports that rather than new social spending, the tax could fund future bailouts in Europe or deficit reduction in the US. “That’s not a movement transaction tax,” says De Moro. “That’s just a bureaucratic maneuver to get money back into the budget.” She says when the insider-outsider coalition that’s united behind the tax becomes divided over how to spend the money, grassroots organizing will be more important than ever: “Where the money would go is going to be contingent on the movement that we build.”
© 2012 The Nation