By Maximilian Clarke
Business and legal experts will tomorrow (Wednesday) give evidence to the Lords EU Economic and Financial Affairs and International Trade Sub-Committee about the potential benefits of a financial transactions tax with advocates from non-governmental organisations (NGOs).
Bankers have emerged from the recession as a scapegoat for the UK’s economic malaise, and the tax is seen by many as a just means of addressing the inequalities wrought by the sector.
But many commentators have criticized the tax, which would scoop a nominal percentage- often quoted as 0.7%- from each financial transaction, bankers, argues Jan Boucek from the leading libertarian think-tank, the Adam Smith Institute, would be too smart to pay the tax and would move their transactions elsewhere. This happened to Sweden, who immediately saw financial flight to the City of London. Given the dominance of the UK’s financial sector, such flight would amount to ‘http://www.freshbusinessthinking.com/news.php?CID=2&NID=9789&Title=Tobin+Tax+deemed+%91economic+suicide%92" rel="nofollow">economic suicide’.
Desmond Tutu and George Soros and Nobel economics laureate, Joseph Stiglitz, have publicly supported the tax, as have MPs from all parties. Their arguments are summarized as follows on the Robin Hood Tax website:
“The financial crisis and the recession have left a massive hole in the UK’s public finances. Jobs and public services are at risk in the UK while many other developed and developing countries face a similar struggle.
But there is another way. Thousands of Robin Hood supporters believe that banks, hedge funds and the rest of the financial sector should pay their fair share to clear up the mess they helped create.”
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