I want to support the new campaign for a “Robin Hood Tax” – really I do. I understand the logic behind the Tobin Tax and have a lot of sympathy for the idea. But there’s something about this campaign… Actually, there are four problems I have with it:
Firstly, the name “Robin Hood Tax”. On LabourList, Sarah Hayward has already suggested that inviting comparisons with your tax and thievery may not exactly be a great idea. But more to the point, it just isn’t accurate. This isn’t a case of robbing from the rich to give to the poor; it is a case of robbing from the banking system – which we, the companies we work for and the pensions we hope will look after us in old age all participate in – and giving to the government. I don’t wish to sound like a swivel-eyed libertarian, but I need to hear a stronger argument for how that would be genuinely redistributive before I sign up. There is certainly an issue surrounding bankers awarding themselves unjustified bonuses, and you might call that a reverse Robin Hood effect, but it is by no means clear how this tax will tackle that.
Secondly, my old sparring partner Andy Mayer makes an interesting point on his Facebook page:
The figure for global banking profits comes from the campaign website itself $788bn and refers to the year 2006, at the height of the boom. Using the same source as the campaign more recently, the 2008/09 profit figure is just near $120… hence this Tobin tax, if implemented, would be akin to a special corporation tax of between 50-350%.
In the last 8 years I there would only be 3 years where the industry could have afforded to pay it from profits. In the last year it would have had to have been taken direct from bail-out funds, a somewhat circular exercise for government.
Now the Robin Hood Tax is not a tax on profits so there is a danger of comparing apples with oranges here, but the simple fact is that a charge has to go somewhere. It either cuts into profits or it gets passed on to the customer. I’m not, I have to confess, entirely clear what would happen precisely – there are lots of variables – but the Robin Hood Tax website doesn’t seem to want to enlighten me. Perhaps the 0.05% level is too high? Perhaps there should be other restrictions? I have an open mind and would like to hear a debate; instead I’m just being asked to add a mask onto my twitter profile pic.
Thirdly, and this is where I really start to get nervous, the Robin Hood Tax is not the same thing as a Tobin Tax. James Tobin’s proposal was intended specifically to attack currency speculation – not to raise revenue. The Robin Hood Tax, according to their own blog is intended to do the exact opposite.
Why does that make me nervous? Well because when it comes to taxes, I’m highly dubious about taxes on economic activity. Economic activity is a good thing: it gives people jobs (and meaning). Markets aren’t perfect and can create all sorts of anti-social problems but it isn’t the economic activity itself which is the problem but, generally, monopolisation and speculation. Taxing all financial transactions equally won’t tackle bad economic activity any more than the good – it’s just another way of screwing money out of the rest of us. What’s worse is that unlike the Tobin Tax, this idea isn’t about discouraging what is arguably a bad economic activity but profiting from it. Speculation just ruined your economy? Dont worry, here’s a sticking plaster courtesy of the Robin Hood Tax.
Let’s introduce taxes that don’t create perverse economic incentives (such as land value taxation) before creating new ones that do.
Fourthly, there is the Richard Curtis factor. Okay, maybe it is a bit harsh to pick on Curtis, who does seem to mean well, but there’s something about his “love, actually” world view that makes my skin crawl. To promote the campaign, he’s made this video starring Bill Nighy:
Like most of Curtis’ films, on a basic level it is harmless enough but as soon as you start thinking about it the more pernicious you realise it is. Ooh, what a nasty greedy banker! Boo to him! This from the man who gave us the all white Notting Hill (which has now become a self-fulfilling prophecy courtesy of David Cameron and his pals).
Okay, maybe that last point isn’t a particularly strong one, but it is this sort of superficial, anti-intellectual marketing that has got the world in the mess it is today. Is the Robin Hood Tax a brilliant idea? Feel free to try convincing me, but spare me your celebrities, your claims that you can get money for nothing and your *gag* guerilla marketing exercises (a protest at 4am? Edgy!).
Further reading:
- Freethinking Economist: The curse of nef: Tobin Taxes
- Jane Watkinson: Tobin or not Tobin…
