A new tax on banks, actually

Mark Lee
Mentor and Speaker for accountants
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Bill Nighy and Richard Curtis joined tax campaigners and other finance professionals to debate the proposed ‘Robin Hood’ tax at an RSA event in London today. Consulting practice editor Mark Lee was there to take part in the discussion.

The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) played host to an event that sought to continue the debate about the so-called Robin Hood tax. The campaign to introduce a tiny tax on financial transactions was launched last month and is supported by a number of celebrities – including Love Actually director Richard Curtis and actor Bill Nighy, who were both present for today’s discussion.

Originally proposed by James Tobin in 1972, the 'Tobin tax' has been ‘snappily rebranded’ and is gaining popular support as it's a tax on banks and not a tax on individuals. Professor Jeffrey Sachs, director of the Earth Institute at Columbia University and an adviser to the UN spoke passionately in support of the proposal, saying its “time had come”.

Sachs was joined by the FT’s world trade editor Alan Beattie, Dr Claire Melamed from ActionAid UK and Major Ivor Telfer from the Salvation Army for a Q&A session in which the 250 strong audience explored the proposed tax in more detail. Most of the questioners were supportive of the campaign but some were a little too quick to simply ‘run’ with the proposals in my opinion.

Questions included how it could be ensured that the funds raised would be used to alleviate worldwide poverty, who would run the global tax authority required to establish and administer the tax and how the Robin Hood Tax Coalition (as the campaign group are calling themselves) could maintain momentum to engage with all those who have supported the campaign. These and other questions showed that many presumed the new tax was a done deal.

For my part, I was more interested in the immediate practical issues - accepting that my own tax background in no way qualifies me to speak to the technical aspects of a Tobin tax (or the Robin Hood financial transactions tax). Apparently the main impact of the tax would fall on the hedge funds and investment banks who would not, contrary to some gain sayers, be in a position to pass on the 'cost' to consumers or to reduce pension fund investments.

The campaigners are keen to engage with politicians of all the major parties in the run up to the election. They hope that constituents will raise the issue with local MPs and aspiring MPs.  They also hope that the online support for the campaign on social networks like Facebook and Twitter will influence MPs. The ambition is to get one government (for example the UK’s), to introduce the tax on a unilateral basis and for this to inspire other countries to follow suit.

Speaking at the event, Nighy and Curtis said they were aware of the reasons that some people had argued against the campaign, but their focus was on what they see as an unarguable need for the money. They said that if any eventual new tax was exactly what they were proposing of a variation of it, they wouldn’t mind – the main point was to raise funds good causes and relieve the prospect of increased taxes on real people in the wake of the recent financial crisis.

Will the Robin Hood tax happen in the UK first or ever? Share your views below.


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