'Robin Hood tax': What is it and why does Occupy want it?

As Jamie Dimon testifies before Congress (again), Occupy protesters don pointy hats to promote the 'Robin Hood tax' on stock and bond transactions – an idea Washington opposes. 

|
Andrew Burton/REUTERS
A woman donning a Robin Hood-style hat and mask protests outside the JPMorgan Chase headquarters in support of the Robin Hood tax in New York Tuesday.

If you're a 99 percenter and think something called a "Robin Hood tax" sounds like a good idea, what better time to don a mask and a pointy-topped hat than on the day JP Morgan Chase CEO Jamie Dimon gets grilled by Congress?

Mr. Dimon might have become the new symbol of corporate profligacy when his company lost some $2 billion in stock trades, but Occupiers on Tuesday dreamed of socking his Wall Street brethren with a much bigger number. Say, $100 billion.

If Congress were to pass a financial transaction tax – a.k.a. the Robin Hood tax – the "rich" (stock- and bondholders) would lose a small percentage of every trade, which would be given to the "poor" (insert your cash-strapped federal program here). All without adding a cent to personal income taxes.

Its backers – including actor Mark Ruffalo, Rage Against the Machine’s Tom Morello, and Coldplay’s Chris Martin – appear in a video drawing masks and hats on dollar bills. In front of the JP Morgan Chase headquarters in New York Tuesday, a group of about 40 activists (and one dog) also dressed in Robin Hood attire tried to drum up public support.

"As a democracy, I think it’s what we want, but the people who would be taxed are the most powerful people in the country,” says Michael Kink, executive director of Strong Economy for All Coalition.

Indeed.

Unfortunately for Tuesday's would-be Robin Hoods, Washington is no Sherwood Forest. Republicans on Capitol Hill are against any tax increases, and even potential allies such as President Obama and Treasury Secretary Tim Geithner have said the tax wouldn’t be feasible.

Critics say taxing financial transactions could move all that Wall Street business offshore and would be more likely to affect individuals’ retirement savings than financial traders. Obama administration officials have said that it would be ineffective.

“Academics tend to be big supporters of this – back when he was an academic Larry Summers was a big proponent of this, but he changed his mind” when he became Treasury secretary, says Pete Davis, an economist who advises Wall Street on financial legislation.

Advocates are talking about between a 0.5 and 0.005 percent tax on every transaction, but those numbers add up quickly. The tax would generate more than $300 billion a year if there was no reduction in trading, according to a study by the Center for Economic and Policy Research. Different proposed versions of the tax have more modest estimates.

When Sweden enacted a similar tax, traders moved to the London Stock Exchange and the volume of trading declined significantly, says Shelly Antoniewicz, senior economist with the Investment Company Institute (ICI).

“We view [the taxes] as being more harm than good, the side effects or negative consequences would outweigh the benefits,” she says.  

ICI has a letter to Secretary Geithner on its website, stating its opposition to a transaction tax.

Robin Hood activists tried to do the ICI one better.

“I knocked on Tim Geithner’s door, but he didn’t answer," says Bobby Tolbert, an activist in New York Tuesday who went to Washington last week to try and generate interest in the tax plan. "We just wanted to deliver a letter to him, but the Secret Service stopped us.” 

Still, Mr. Tolbert's merry band can claim at least one small victory. 

Quoth he: “As we were leaving, a neighbor told us that they would deliver the letter for us.”

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to 'Robin Hood tax': What is it and why does Occupy want it?
Read this article in
https://www.csmonitor.com/USA/Politics/The-Vote/2012/0619/Robin-Hood-tax-What-is-it-and-why-does-Occupy-want-it
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe