April 27, 2014
Of the proposals made to tax Wall
Street's financial transactions, the best-known and presumably best-funded is
the "Robin Hood
Tax." Represented in the US as the "Inclusive Prosperity Act," introduced by MN
Rep. Keith Ellison, Robin Hood is curiously sponsored by the British NGO OxFam, who promotes it with slick viral
videos featuring well-known British actors like Bill Nighy.
While we at UFAA are broadly
supportive of Robin Hood's goals and have been present at a number of Robin
Hood demonstrations held by the National Nurses United, one of the unions
promoting the tax, we are obligated to offer the following criticisms:
1)
The tax rates are too low!
Whereas the UFAA demands a 1% tax
on the sale of all stocks, bonds and derivatives, Robin Hood starts at 0.5% for
stocks, but descends to 0.005% for derivatives (futures, swaps, indeces,
etc.)
This is not only too low for our
tastes, it's much lower than the rate demanded by similar bills, such as the
proposed "Harkin-DeFazio" tax (0.03% or 6X the rate of Robin Hood)
and John Conyers' HR 1000, which applies a rate of 0.02% (4X)
Derivatives include the most
dangerous types of financial speculation, such as the credit default swaps that
crashed the housing market or the energy derivatives and agricultural futures
that comprise up to 1/3 the cost of your gasoline and grocery bills. Robin Hood
attacks the stock market in a fairly aggressive manner, but leaves these
derivatives relatively unscathed.
We emphasize that a Wall Street
Sales Tax has a two-fold purpose: 1) to generate revenue, and 2) to penalize
non-productive speculation, which redirects money flows toward productive
investment. Robin Hood offers no convincing arguments that such a small tax is
sufficient to accomplish either goal.
