The Robin Hood Tax - Summary

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Business Tax: Reading Week Notes

The Robin Hood Tax
* The idea behind the RHT is to generate hundreds of billions of dollars

* That money could be used to kick-start the US economy and get America back on its feet

* The RHT = 0.5% tax on Wall Street transactions

* Benefits:

* It won’t affect the vast majority of Americans
* It’s easy to enforce
* It’s tough to evade
* It taxes those who are to blame for the global financial crisis, rather than the average American * It will help limit riskless speculation that threatens financial stability

* The RHT is seen as justified as “the banks can afford it”

* “It’s not a tax ON the people, it’s a tax FOR the people”

* It will be implemented using a Financial Speculation (or Transaction) Tax (FST/FTT)

* The FST is a small tax of less than half a percent on trades in derivatives, stocks, bonds and foreign currency

* With an FTT, a small percent (between 0.005% and 0.5%) of the value of the trade is collected in tax revenue

* The tax will deter the most risky transactions and prevent some of the “gambling” which helped trigger the financial crisis

* Why is the RHT needed? The financial crisis has left a massive hole in the US’s public finances and this needs to be filled. The money raised will generate jobs and strengthen public services

* The money can also be used to fund new Green projects to help curb global climate change

* Disadvantages

* The article is incredibly biased so it downplays this point: the tax will affect regular investors as well which could discourage normal people from investing * The tax will affect the value of pension funds, possibly discouraging trading which would see the value of pensions of many normal American’s fall * Banks may just past the cost of this tax onto the consumer * The affected companies may just move their business offshore or start trying...
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