Economic policy

Financial transactions tax letter

John Quiggin12 Comments

From my incoming email

Groups across the world are inviting economists who are qualified by post-graduate degree (Master or PhD) to sign a letter in support of a financial transactions tax (see below). The goal is 1000 signers by Friday, April 8th.
Economists can sign the open letter by entering their details in the comments box at this link: or emailing euderzo@oxfam.org.uk.

Last year, 350 economists from all over the world signed a letter in support of a financial transactions tax, and over the past year there has been significant political movement towards implementing the FTT in Europe and some other countries. The campaign for the so-called ‘Robin Hood Tax’ is now hugely popular in many countries (www.robinhoodtax.org). The French have made an FTT a priority for their presidency of the G20 and there is a real chance of a breakthrough in the coming six months.

I’ve also had some contact with the organizers who would like some Australian academic economists (I take this to mean having an academic position in an Australian econ department) who would state their support as a group. If any of my readers fall into that category, please email me.

12 thoughts on “Financial transactions tax letter”

  1. John – 3, 2, 1, cue Tony Abbott “Big new tax”. Cue the corporations to get out a rent a crowd with signs promising the end of civilisation as we know it if you dared to tax the market. Cue “The Australian” columnists. Cue – well, you get the idea.

  2. @David Horton
    Who cares? We have a labour government that is held hostage by these kinds of concerns. It’s about time the government grew a spine and called the oppositions bluff. Abbott’s “peoples revolution” was pretty thin and loaded with cranks. Australian’s aren’t quite as stupid as the media plays them for.

  3. Are these types of petitions a good idea? How much honest opinion do they elicit? Its an open question rather than a criticism.

  4. From the letter:

    This money is urgently needed to raise revenue for global and domestic public goods, such as health, education and water, and to tackle the challenge of climate change.

    But the money isn’t really needed for any of those things, at least not for domestic purposes. Even if it is, there are better ways of raising the money, e.g. the U.S. has hopeless health and education, but that’s because they choose not to tax personal and company income enough. And what money they do raise, they tend to spend wastefully on endless and pointless wars.

    There may be a case for developed nations to spend more money on health and education in other parts of the world, but the letter doesn’t even attempt to make that case.

    I guess it’s no surprise that they only got 350 signatories worldwide last year.

  5. SJ has a point – several actually.

    Further, is it really sensible to apply the tax rate to all financial transactions? In a monetary economy all transactions are ‘financial’ in the sense that all goods and services are bought and sold using securities.

    The idea of a Tobin-type tax is to mitigate speculative financial bubbles and the income distribution consequences of speculative financial bubbles.

  6. Good point David Horton. The only thing that would shut Abbott up is a political exageration tax.

  7. Ican see an FTT being an optimal device to fund the United Nations and the World Bank for a more comprehensive outcome than the very partisan output that we get now. But then that may well be what is being proposed here.

  8. Can we call it the Pauline Hanson tax given that this is one more part of the leftist economic agenda that she and One Nation advocated.

  9. @TerjeP (say tay-a)

    Even a broken clock is correct twice a day.

    A heck of a lot of credible people advocated this type of tax before Hansen became political. I think those who proposed, designed or negotiate it first deserve the credit.

  10. So glad to see Oxfam et al reinforcing the expertise claims of what has often been called a captured profession. Almost as good as Soros’s INET’s efforts to build new ways of thinking about equality, money, and distribution almost entirely with . . . the same discipline that has structured the world of hurt we’re now in. A creative, constructive approach would invite people who think about law, anthropology, sociology, etc. Are you really telling me that people like Karen Ho, Gillian Tett, or Annelise Riles couldn’t speak on this topic with at least as much authority as economists? (And that’s only to name a small sample of relevant anthropolgists.)

  11. The major advocate against an FTT in Australia is Sam Wylie, who’s done a few interviews claiming that no economist supports such a tax. It would be interesting to have this claim debated. Perhaps non-coincidentally, Sam makes his living teaching “financial engineering”.

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