Robinhood's FTT: A Tax for the Public Good

This week, Friends of the Earth sent a letter signed by 63 U.S. organizations, to Secretary of State Clinton regarding misinformation spread internationally by State Department representatives about financial transaction taxes (also known as the Robin Hood Tax). The Robin Hood Tax is a widely-supported, promising source of new revenue to address the climate crisis, healthcare, education, and other public goods -- both in the US and globally.

Endorsers of the letter include National Organization for Women, NETWORK (which spoke at the Democratic National Convention), National Nurses United, Conference of Major Superiors of Men, Main Street Alliance, Greenpeace USA, Oxfam America, and many other environment, public health, faith-based, labor, development, and social justice groups. The letter was sent in light of next week's UN climate meeting on "long-term finance" to help enable developing countries to address the climate crisis.

The thrust of the letter is captured by the following excerpt:

We were thus very disheartened to hear misstatements about the Robin Hood Tax made at a recent international forum -- the UN Climate Convention's First Workshop on Long-term Finance in July -- by a member of the U.S. climate negotiating team. While we work very hard to move our own country in a fairer, more just and more ecologically-sound direction, we would ask that you not discourage other countries from supporting this tax as one equitable solution to address the climate crisis, cuts to public services, and widespread job loss faced by their populations. Indeed, we urge you to support efforts to enact a financial transaction tax to pay for international public goods at climate change negotiations, the G20 and other important international venues.

The full text of the letter is pasted here:



September 27, 2012



The Honorable Hillary Clinton

U.S. Secretary of State

U.S. Department of State

Washington, D.C.



Dear Secretary Clinton:



We are strong, vocal advocates for the establishment of a financial transaction tax (FTT), which we and many others around the world call a Robin Hood Tax. We firmly believe it is past time for the financial sector to pay its fair share of taxes, and for the government of the United States to support this modest imposition on financiers and multinational corporations in order to meet the needs of ordinary people. At a time when public funds are deemed scarce, a Robin Hood Tax would create a new source of revenue to pay for desperately needed public goods -- like funds to provide healthcare and education for all and to help developing countries deal with climate change, for which the U.S. has committed to help mobilize $100 billion each year by 2020.



We were thus very disheartened to hear misstatements about the Robin Hood Tax made at a recent international forum -- the UN Climate Convention's First Workshop on Long-term Finance in July -- by a member of the U.S. climate negotiating team. While we work very hard to move our own country in a fairer, more just and more ecologically-sound direction, we would ask that you not discourage other countries from supporting this tax as one equitable solution to address the climate crisis, cuts to public services, and widespread job loss faced by their populations. Indeed, we urge you to support efforts to enact a financial transaction tax to pay for international public goods at climate change negotiations, the G20 and other important international venues.



To that end, ahead of the UN Climate Convention's Second Workshop on Long-term Finance on October 1-3, we would like to address three misleading claims made by your representative.

• A FTT would be almost impossible to impose globally. FTTs do not have to be global to work. They have been implemented -- both temporarily and permanently -- in over 40 countries. In fact, at least 9 countries are currently working toward the establishment of an FTT through Enhanced Cooperation in the European Union. As you know, both the French and the South Korean governments have recently imposed new financial transaction taxes, and the United States had a financial transaction tax from 1914 to 1966.
• It would be difficult to raise a lot of revenue from an FTT once private actors figure out how to work around such a tax. It could actually erode a country's tax base more generally by encouraging movement of financial activity offshore. According to the IMF, financial transaction taxes "do not automatically drive out financial activity to an unacceptable extent."[1] Tax avoidance could be easily minimized by a well-designed tax. More than 70 percent of financial transactions go through electronic central clearinghouses, making them easy to monitor and difficult to evade. Financial traders have little incentive to avoid these clearinghouses, since the mechanism ensures firms' sales and purchases have been completed. London has an FTT on share transactions, yet it remains one of the biggest stock markets in the world.
• The source of climate finance should be linked to emissions. It is the exception, rather than the norm, for revenue from a tax to be directly linked to the source of taxation. No one, for example, demands a direct link between state sales taxes and the use of that revenue.

To provide you with further background, we are attaching Stamp Out Poverty's "Financial Transaction Tax: Myth-Busting." We also encourage you to visit www.robinhoodtax.org.



As your Special Envoy for Climate Change Todd Stern is fond of saying, politics is the art of the possible. The barriers to the implementation of a Robin Hood Tax are political, not technical, and they are certainly surmountable -- if government has the political will. We urge you to ensure that U.S. government representatives stop trying to make what is very possible seem impossible. We are working hard to make a Robin Hood Tax a reality in the United States, and we encourage you to consider doing the same at home and abroad.



We would be pleased to meet with you and your representatives to discuss these matters at your earliest convenience.



Thank you for your consideration.



Sincerely,



ActionAid USA

African Services Committee

AIDS Foundation of Chicago

AIDS Taskforce of Greater Cleveland

Alliance for a Just Society

BAART Programs

California NOW

Center for Biological Diversity

Center for Economic and Social Rights

Center of Concern

Chicago Political Economy Group

Conference of Major Superiors of Men

Corporate Accountability International

DYNS Services

EcoEquity

EG Justice

Food & Water Watch

Foundation Earth

Franciscan Action Network

Friends of the Earth U.S.

Gender Action

Global Alliance for Incinerator Alternatives

Grassroots Global Justice Alliance

Grassroots International

Greenpeace USA

Health Global Access Project (GAP)

HIV Prevention Justice Alliance (HIV PJA)

HIV/AIDS Law Project

Holy Cross International Justice Office

Institute for Agriculture and Trade Policy

International HIV/AIDS Alliance USA

International Rivers

Jobs with Justice

Jubilee Oregon

Jubilee USA Network

Labor Campaign for Single Payer

Labor Network for Sustainability

Lifelong AIDS Alliance

Main Street Alliance

Marin Interfaith Task Force on the Americas, USA

Maryknoll Office for Global Concerns

National Nurses United

National Organization for Women (NOW)

NETWORK

New Rules for Global Finance

Nicaragua Center for Community Action

Oxfam America

PeterCares House

PR CoNCRA

Progressive Democrats of America (PDA)

Raging Grannies

Rainforest Action Network

RESULTS

Right to the City Alliance

Sustainable Energy and Economy Network/Institute for Policy Studies

Sisters of the Holy Cross - Congregation Justice Committee

START at Westminster

SustainUS

Tax Justice Network USA

Voices Of Community Activists & Leaders (VOCAL-NY)

Wealth for the Common Good

Women Together for Change, Inc.

350.org



Cc: The Honorable Tim Geithner, Secretary of Treasury

(PDF): Letter to Secretary of State Clinton urging her to support, not disparage, the Robin Hood Tax