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Unless you have been living under a rock recently, it can’t escape your notice that the country is tightening it’s purse strings in the light of the spending cuts. 490,000 public sector workers set to loose their jobs, rising tuition fees at universities and the state pension age rising to 66, are just some of the joys we all have to look forward to in the coming years. But is there another solution that has been overlooked? To say the solution lies with Robin Hood sounds a bit silly and probably to most people just brings up images of men in tights, which I’m sure we will all agree wont really help anyone, but his simple slogan “steal from the rich, give to the poor”, could make the country billions. Easy and its called the Robin Hood Tax.
Now we aren’t talking taking in a stand and deliver sort of way, but a simple tax on the financial sector (the rich) and giving to those who need it (us, the poor.) Now here is the technical stuff. The Robin Hood Tax comes in three forms, an FTT, a financial transaction tax which takes about 0.05% from transactions on things like stocks, bonds, foreign currency and derivatives which could raise £250bn a year globally, or £20bn in the UK alone. A bank levy, which is just a flat rate tax on large financial institutions and taxing excess profits and remunerations which is sort of VAT on the financial sector and could raise as much as £3.9bn a year. Taxing the financial sector makes sense; it has cost us £1.5tn to bail out the banks, that’s £31,250 per tax payer in the UK. To put it in other terms, the financial sector owes us, and now it’s about time it gave something back.
The money from the tax can be used to fight poverty in both the UK and abroad and to help combat climate change, all worthwhile causes that are going to suffer in the current economic situation. The Robin Hood Tax supporters have pointed out ways the money could be used. In the UK £2bn avoids housing benefit cuts; £4bn halves child poverty; £5bn insulates every home; £10bn protects the NHS. If the policy was adopted worldwide £4bn puts every child on earth in primary school; £5bn pays for healthcare for 200,000 people; £7bn means Haiti can fully adapt to the threat of flooding.
And while people across the country are loosing their jobs, the bankers are still receiving their huge bonuses and returning record profits, surely the most sensible way to create some money is to tax these institutions and make them begin to fix the mess they caused in the first place? There have already been some steps taken towards introducing this tax, such as the Bank Levy introduced by the baby-faced chancellor George Osbourne, however this doesn’t go anywhere near far enough. This tax will eventually generate £2.5bn but is slightly offset by a cut in corporation tax, but compared to the possible £20bn that could be raised this figure seems ridiculous. It may seem like a huge sum of money to take but the sector’s profits and bonuses total more than £100bn, so it’s an easily achievable figure when put in context. And of course the idea that the financial sector can’t handle these kind of cuts is ridiculous; in 2011 the financial sectors taxable income could reach more than £75bn. A Financial Transaction Tax will also rebalance the tax system, so that organizations that can pay do pay. And it will refocus our economy away from the riskiest elements of the financial sector. The tax is supported by charities and organizations all across the world, including Oxfam, (and Lancaster’s very own Oxfam Society) and numerous celebrities and politicians who all recognize the Robin Hood tax as a sensible way of steering the world through the difficult economic times and creating money to counter all the serious government spending cuts.