The Robin Hood tax

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What is the Robin Hood tax?
How are we doing?
What do we expect from the G8 and the G20 in June 2010?

What is the Robin Hood tax?

The Robin Hood tax is a tiny levy of around 0.05% that would be imposed on all big financial transactions around the world. Like the Tobin tax, it would target large-scale currency trades, but it would also apply to a whole range of financial market products.

Only banks and other big financial institutions would have to pay this tax; it would not affect individuals. This financial transactions tax (FTT) is intended to make the financial industry shoulder its responsibilities to countries of the South, who have been hardest hit by the economic crisis, while amassing funds to combat poverty in North and South alike.

The revenues from the tax would be distributed as follows: 50% would go to the government that adopted the tax and would be reinvested within the country, 25% would be earmarked for achieving the Millennium Development Goals (MDGs), and the remaining 25% would finance the battle against climate change in developing countries.

How are we doing?

Several leaders have already come out in support of such a tax, including German Chancellor Angela Merkel, French President Nicolas Sarkozy, and British Prime Minister Gordon Brown. The European Parliament has also spoken in favor of such a tax.

The worldwide volume of financial transactions is 75 times world GDP. For that reason, a tiny FTT of 0.05% could yield hundreds of billions dollars a year.

Under the proposed distribution system, we can expect that:

After three months, the FTT would give 8.6 million HIV/AIDS sufferers access to adequate treatment.
After two weeks, it would help guarantee food, water and drug supplies to 1.1 billion needy people.
After four days, a million teachers would be employed in Africa.
After two minutes, 100 000 people would have access to basic health services.
After one second, 9 000 schoolchildren would have a pencil and workbook.

The Robin Hood tax, then, is an unprecedented opportunity to reduce world poverty in a very short time.