By Pam Martens: October 10, 2012
Robin Hood Tax Protesters in Manhattan
Yesterday, eleven intrepid countries in Europe, led by the rallying cry of Germany and France, agreed to forge ahead on the imposition of a transaction tax on the trading of stocks, bonds and derivatives.
The specifics have not yet been ironed out but the original proposal called for taxing trading of stocks and bonds at 0.1 percent per transaction and derivative trading at 0.01 percent. The transaction tax is referred to in Europe as the Tobin Tax, named after the American economist James Tobin who first proposed it over 40 years ago.
That forty year number is the operative term in this battle. Another phrase comes to mind as well: when hell freezes over. The prospect that either Wall Street or The City (London’s equivalent to Wall Street) would tolerate this tax without a mass exodus of business from the countries imposing it is quite naïve.
Which raises an interesting possibility – do these eleven members of the European Union relish the idea that the ravaging hoard of high frequency bandits move their business elsewhere? In addition to Germany and France, the other countries agreeing to the transaction tax are Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
The Wall Street Journal reports that the final plan on the transaction tax by the eleven countries must be approved by “a majority of all 27 EU states and the European Parliament.” The German publication, Der Spiegel, however, points out that “Countries that choose to opt out of such an agreement could also block the action, but the non-participating countries said at the meeting that they would not plan on doing so.”
The U.S. has its own Tobin Tax idea – inspired by apparently the only group with the guts to try to medicate Wall Street’s madness: nurses. Seriously. Nurses.
On October 3, activists from National Nurses United swarmed House Minority Leader Nancy Pelosi’s office, urging her support for House bill HR 6411, the “Inclusive Prosperity Act,” which would establish a 0.5 percent tax on stock trades and smaller amounts on bonds, derivatives and currencies. Pelosi did not emerge to speak with the activists but sent out a representative to say she would consider the matter after the Presidential election. Translation: No way am I going to hand that powder keg to the ferociously anti-tax, anti-regulation duo of Romney and Ryan a month before the Presidential election.
The U.S. transaction tax is known as the Robin Hood Tax and was introduced by Keith Ellison of Minnesota. It’s a brilliant way to limit the high frequency trading which has driven the small investor out of the market and force Wall Street to create a fund to bail itself out of its next mess. But all Wall Street has to do to kill any good idea in Washington is scream “we’ll move our business to London.” As expected, this sound idea has a pathetic 10 co-sponsors in the House.
