It’s time to take from the rich and give to the poor !!

Whilst banks around the world are back in the black and back to paying massive bonuses to their executives, millions of poor people around the world are reeling from the global financial crisis which has been caused by their greed.

ActionAid is supporting the call for a tiny tax on the bankers, a “Robin Hood Tax” that takes from the rich to give to the poor. A .05% tax on global financial transactions by banks and other financial institutions like hedge funds would raise billions to assist people affected by climate change and extreme poverty. In Australia we all pay a GST of 10% on practically everything we buy, so why shouldn’t the banks be paying a tax on their transactions?

Such a tax would only be applied to the wholesale financial markets so for example you wouldn’t be taxed if money was being sent to relatives overseas. The tax would be based on a system where “the more you trade the more you pay” so the biggest institutions whose wealth skyrocketed before the global financial crisis would pay most of the tax. As the financial crisis has led to millions more falling into extreme poverty, the banks and other financial companies that caused this mess should be coughing up the money to help them find a way out of extreme poverty.

A growing number of economists (amongst them Nobel Laureate Joseph Stiglitz and Jeffrey Sachs), many in the financial sector and high profile business types such as Warren Buffett and George Soros are calling for the tax. This is because it’s an easy tax to collect and would have little impact on the financial services industry if it’s designed correctly. In many cases it would require little more than changing a few lines of computer code to collect the tax from computerised bank transfers. Lots of countries already tax financial transactions and the G20 has requested the IMF to review the proposal for a tax.

The global financial crisis has created the perfect storm and the time is right to introduce a financial transactions tax. The G20 provides the perfect forum for these discussions and a growing number of G20 governments are supporting the idea. We have written to Wayne Swann urging him to consider this proposal and ActionAid demands that the Government of Australia works with other G20 members to agree to a plan to implement a global financial transaction tax at the G20 meeting in South Korea in late 2010.