Occupy Wall Street’s ‘Robin Hood Tax’ A Tough Sell At G20

15 january 2013

The 99 percenters at Occupy Wall Street are hoping their European counterparts can pressure G20 leaders this weekend into adopting what they call a Robin Hood tax on financial transactions. But it faces some hefty opposition.

The Robin Hood tax, sort of like a Tobin tax, was proposed by Germany as a means to raise revenue for countries hit hard by the 2008 housing and credit markets crash. Yet, the estimated 1% transaction tax would have to be global in nature for it to work, and countries as diverse as the UK and Russia are against it.

The tax is being proposed for members of the EU only, but there is a push to make it global.

This week, Russia’s assistant to the president, Arkady Dvorkovich, said taxes were for individual countries to decide, not international institutions.  “We don’t need taxes on transactions and banks,” he said in a radio interview on the Voice of Russia. “We have other (revenue) opportunities like high taxes on oil and gas sector and some raw material producers. This is enough. If other parties want to impose transaction taxes let them do it.”

Last week, UK Finance Minister George Osborne said he opposed a Tobin-style tax on derivatives such as forex contracts, options and futures, unless they were applied globally. If they are only applied to Europe, it is believed that many capital market players will move to nations with lower tax burdens.

Russia is busy building out its securities market infrastructure with the merger of Micex and RTS, and has a shiny new city being built with all the amenities across from the Moscow River that would welcome them. Russia is opposed to taking the Robin Hood tax global.

Germany’s Finance Minister Wolfgang Schaeuble said in a speech in London last week, that a financial transaction tax in Europe would help reduce volatility and make leveraged trading — buying on debt — less profitable.

“Short-sighted parochialism” is stopping progress, he was quoted as saying in Reuters on Oct. 17.

The UK has already imposed a balance sheet tax on banks, but Europe is asking it to join them in imposing a tax on what is mainly investor speculation in an effort to raise revenue for cash strapped states in southern Europe.

One of the brains behind Occupy Wall Street, Kalle Lasn, told Forbes on Oct. 14 that movement followers would protest on Saturday Oct. 29 ahead of next week’s G20 meeting in Cannes to show support for what he referred to then as a Robin Hood tax.