I received this from Avaaz today and signed their petition. I post it here in case some of my readers may wish to do so as well.
Dear friends,
Across the world, people are refusing to pay the social and economic price of trillions in bailouts to banks in 2009. A new tax on financial speculation could raise trillions to cover the crisis in public financing, and ensure those who got us into this mess, pay to get us out. Leaders are considering the tax now – click to support it:
From the UK to the US to Spain, Italy and Israel, the economic crisis is brewing riots, crashes, and protests, but there is one big way out — a global financial transaction tax (FTT)1.
The FTT, being proposed by Nobel prize winning economists and leading EU politicians, is a tiny fee on stock market traders and speculators — a fair way to meet the crisis in public financing. Less than .05%, the tax would be painless to responsible commerce and hit speculators hard, raising a trillion dollars in the next 10 years.
We spent trillions bailing out banks and speculators in 2009 – the very people that caused the crisis – and now our social programs are being asked to pay for it. The people won’t accept that, and we have a better way. World leaders are deciding right now on the FTT, let’s demand that the speculators who got us into this mess pay to get us out:
Click here to sign the petition
While the London violence is inexcusable, so is the crisis in which it is occurring. Three years ago, governments took trillions of dollars of public money to bail out the banks, promising it would save our economies. Now, the markets are in turmoil again, the banker bonuses have returned and no one has been held accountable for the crash. The cost of these failures is being shouldered by us ordinary citizens everywhere — our communities are enduring huge public spending cuts and zero employment prospects.The horrific looting and violence in the UK has multiple causes and should not be condoned. But what’s happening there hints at a disturbing trend all over the world — more and more people are desperate, disenfranchised, and hopeless in the face of brutal cuts. While in Israel and Spain, the widespread public frustration has turned into an overwhelming non-violent mobilisation for change. In the UK, the poorest and most excluded communities have lost even the thinnest thread of respect and hope.
Public frustration is at a boiling point and this proposal could be a game changer. Key economists and a handful of politicians are pushing for it, but to get the FTT approved, we all need to weigh in behind it. It won’t be a silver bullet, but it will create vast sums of money to invest back in our communities. Let’s all unite behind this one powerful policy. Click below to sign the petition for the Financial Transaction Tax, and we’ll deliver it to key governments when we reach 500,000 signers:
Click here to sign the petition
Collapsing economies inevitably lead us to social and political upheaval and further away from the world we want. Recessions bring protectionism, nationalism, racism, and now our governments are worsening matters by pursuing disastrous policies. Today, by building a movement behind the Financial Transaction Tax, we can draw a line in the sand on catastrophic policies and demand a solution that strengthens communities not corporations, and restores hope and humanity to the world.
With hope,
Alice, Iain, Emma, Ricken, Stephanie, Pascal, Morgan, and the rest of the Avaaz team
Notes:
1. The Financial Transaction tax is also often referred to as the Tobin Tax, or the Robin Hood Tax.MORE INFORMATION
Economic uncertainty leading to global unrest, CNBC
Nothing mindless about rioters, Al Jazeera
EU President says only global “Tobin” tax effective, Reuters
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My 2 cents. It is a great idea only if you can trust the politicians. I am afraid by the time it got pass as a tax. We, the retail investors, are the only ones paying the FTT. The others, i.e. HFT traders or major banks/institutional traders, are excluded. They will tell you that it would be too “BIG” of an impact on them and on the fragile economic. The “others” will be able to claim all the FTT back as some kind of tax credits then these tax refunds will be rewarded to traders as trading bonus to “stimulate” our economic.
BTW, I agree with Matt Alic’s comment on Roubini. In addition, if them are bankrupted, I am sure there are many responsible companies with strong financials are willing to step in and pick up the slack. Good capitalism. JW, Vancouver.
In January, 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Hence a round trip (purchase and sale) transaction resulted in a 1% tax. In July, 1986, the rate was doubled, and in January, 1989, a considerably lower tax of 0.002% on fixed-income securities was introduced for a security with a maturity of 90 days or less. On a bond with a maturity of five years or more, the tax was 0.003%. Analyst Marion G. Wrobel prepared a paper for Canadian Government in July, 2006, examining the international experience with financial transaction taxes, and paying particular attention to the Swedish experience.
The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kroner per year. They did not amount to more than 80 million Swedish kroner in any year and the average was closer to 50 million.[30] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kroner by 1988.
On the day that the tax was announced, share prices fell by 2.2%. But there was leakage of information prior to the announcement, which might explain the 5.35% price decline in the 30 days prior to the announcement. When the tax was doubled, prices again fell by another 1%. These declines were in line with the capitalized value of future tax payments resulting from expected trades. It was further felt that the taxes on fixed-income securities only served to increase the cost of government borrowing, providing another argument against the tax.
Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. On 15 April 1990, the tax on fixed-income securities was abolished. In January 1991 the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the 1990s.
This tax does not punish corrupt credit rating agency’s responsible for giving triple A ratings to worthless assets, this tax does not punish governments for spending and lending well beyond there means taking there country’s to the point of collapse, and finally this tax does not punish speculators or any one choosing to do business in the markets because they will take there business else where to a country that is not insane enough to impose it., apart from corporations who must exchange funds and deal with the markets, there will be no issue there because the costs can and rightly will be handed to the end consumer. Tax Profits.