FAQ
The Robin Hood Tax campaign launched in February. What’s been happening?
The Robin Hood Tax campaign has grown hugely since it launched in February and is now a very successful campaign. We are a unique coalition of well over one hundred domestic, development and green organisations backed by 350 economists worldwide. We have 170,000 supporters on Facebook and over a million have seen our films. Every MP and Prospective Parliamentary Candidate in the UK has been emailed about the campaign at least five times, and… More >>
What is a Robin Hood Tax:
Currently lots of taxes are being labelled a Robin Hood Tax. While this sounds like victory, things might not be as simple as they first appear. Has Robin Hood’s name been used in vain?
The Robin Hood Tax is our name for financial transaction taxes. These are not new, but we believe they could play a much bigger part in raising money. A transaction tax takes a tiny percentage of a financial transaction such as changing money from one currency to another, buying shares or other more exotic financial products such as derivatives. Most of these transactions take place between financial institutions such as banks and hedge funds.
Different kinds of transactions can attract different rates. We reckon they could… More >>
The financial crisis has left a big hole in public finances in almost every country in the world. Companies who are under pressure or who have gone under are no longer paying so much tax. People who used to pay income tax are now receiving benefits instead. The result is a public finance deficit and growing debt around the world.
Yet the world’s problems have not gone away – and indeed have got worse as the recession has had a devastating effect in both the rich… More >>
This is an extremely practical proposal and has become more so in recent years as financial markets have become more computerised and automated. Transaction taxes can be easily collected at the point when deals are settled. Computerisation means revenue collection is now relatively straight forward and inexpensive.
Looking at people shouting at each other on the floor of an exchange would suggest that trading is chaotic. But transactions all need to be settled, and taxation would take place when payment takes place. No matter how complex… More >>
We want to see half the proceeds earmarked for spending internationally. Half of this (ie a quarter of the total) should go towards development and the other half should go towards tackling climate change. We are particularly worried that such spending will be a victim of spending cuts.
The other half we want to see spent on domestic good causes. It is much harder to earmark domestic tax for specific new good causes particularly at a time when many are calling for big cuts in spending.
But… More >>
Whilst some experts think that a transaction tax will make markets more volatile – exchange rates could jump around more than they do already for example, many other experts think the opposite – by damping down speculative casino flows you may reduce volatility.
The implementation of an FT must learn from existing FTTs around the world. The average rate of 0.05 per cent can then be applied differently to various markets, and coordinated with market regulation to minimise affects on volatility, and in some cases –… More >>
International agreement would be great, but we don’t have to wait. Many countries already have transaction taxes of their own. In fact, we have a very successful FTT here in the UK already – the stamp duty on shares. That hasn’t stopped the City being one of the most profitable markets in the world. There are simple ways we can implement a smaller Robin Hood Tax in the UK without waiting for everyone else, and it could immediately start working to raise money and prevent… More >>
The campaign is proposing different taxes with different rates for different kinds of financial transactions. Some transactions can be moved to tax havens, but others cannot. A full Robin Hood Tax system requires international agreement by the G20 – the group of the world’s 20 biggest economies. That kind of top-down agreement will not happen overnight, though there is growing support among G20 members.
But some transactions can be taxed by individual countries – or by groups of countries, like the EU, working together. For example… More >>
The tax will fall not just on banks but also hedge funds and other financial institutions. Together they make profits of £1250 billion a year – and this does not include banker bonuses. $400 billion is our best estimate of what the tax will eventually raise from a range of rates on different transactions. The rates are set to raise as much money as possible without producing undesirable wider effects, but it could be more or less than that. While banks and funds will try… More >>
Banks and hedge funds are incredibly profitable – and even before they have declared profits they have paid squillions in big bonuses. So banks, hedge funds and other financial institutions can afford to pay much of this tax from their own resources. Of course they will try and pass the costs on to those on whose behalf they are making transactions, but these customers are not ordinary account holders but some of the richest people and funds in the world.
You should always compare policies with… More >>
The tax will fall on the big banks, hedge fund and others who trade huge amounts every day – often buying and selling the same product or currency many times a day.
Just looking at foreign exchange, the wholesale foreign exchange market basically consists of 60-80 large dealer banks whose traders buy and sell billions of dollars worth of currencies, often many times a day – adding up to $800,000 billion a year. Those are the kind of institutions which will pay the tax.
People and companies… More >>
You won’t pay the tax directly yourself (unless perhaps you’re a multi-millionaire who likes to speculate.) High street banks, and places like bureaux de change where you exchange money to go on holiday or send money overseas, should be exempt from the tax.
It is the people and institutions who trade huge amounts of currency and financial products like derivatives who will pay the tax. They tend to be among the wealthiest people in the world. So unlike many other taxes, the RHT will fall on… More >>
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