Whenever someone suggests corporations and the richest Canadians should pay their fair share of taxes – or at least something approximating the level they paid back in the post-war decades when rising prosperity was lifting all boats – the reflexive response is: “Oh, no, we couldn’t do that. They’d just move somewhere else.”
Impose taxes on carbon emissions in order to help scrub our screwed-up environment? But what about China? India? We couldn’t compete if our businesses had to actually pay for the environmental messes they create.
Protect the jobs of Canadian workers from sweatshops and cheap offshore competitors? But who would make our iPads if we did that?
Maintain social services, education, health care, pensions? Sorry, but those horses left their barns long ago…
So what can supposedly sovereign nations do when individual governments seem powerless in the face of rampant globalization and footloose capital?
Well, they could get together to create an international public counter-balance to out-of-whack corporate power and – at the least – begin to mitigate some of the worst effects of unfettered globalization.
Agreeing to a locally adopted, globally implemented financial transactions tax would be a smart start.
The idea – popularly known as the Robin Hood tax – originated with Nobel prize-winning economist James Tobin, who pitched a variation of the tax following the 1990s Asian financial crisis. Not surprisingly, his proposal has only gained traction in the wake of the 2008 global meltdown.
The miniscule tax – averaging no more than 0.05 per cent – would be tacked on to the cost of buying and selling all stocks, bonds, mutual funds, currencies, derivatives, futures, options, etc… (but not ordinary consumer transactions like credit card purchases, deposits and withdrawals).
Besides serving as a (probably only slight) brake on speculative trading, such a tax would have the more important impact of raising up to $400 billion a year.
Some of the revenue raised through the tax could be used to, in effect, either force banks to fund their own future bailouts or help underwrite economic recoveries. The rest could be put to all sorts of public goods at home and abroad, like maintaining and improving public services, fighting climate change, reducing world hunger … or some combination of the above.
The idea isn’t as radical as it might sound.
In 2010, an International Monetary Fund report called on governments to tax banks and financial institutions to create a global “rescue” fund for future bailouts.
Germany’s conservative chancellor Angela Merkel supports a transactions tax, as does France’s new left-of-centre president Francois Hollande, who actually campaigned and won his country’s recent national election with a Robin Hood tax-plank. Japan’s foreign minister is on side.
George Soros and Warren Buffet have joined the small but significant number of successful global capitalists who have also endorsed the proposal.
Last year, more than 1,000 economists from around the world – including Nobel prize winners Joseph Stiglitz and Paul Krugman – signed an open letter to G20 leaders urging them to introduce such a tax.
Public support is growing too. In recent surveys in England and the countries of the E.U., more than two thirds of respondents said yes to a transactions tax.
That’s partly because, two years ago, more than 50 charities and activist organizations there came together to launch a lobbying effort to explain and promote the tax. (Check out its funny but pointed YouTube video ad featuring British actor Bill Nighy as a deer-in-the-headlights businessman trying to explain why the tax isn’t a good idea.)
Today, that drive has spread to 14 countries, including, most recently, Canada. In June a coalition of union, nongovernmental organizations, anti-poverty organizations and community groups launched a campaign to put the tax on the agenda for next year’s federal budget consultations.
Convincing the Harper government won’t be easy, of course. Its I’m-all-right- Jack dismissal of global economic problems and its mindless anti-tax mindset – not to mention its parliamentary majority – will make it a tough nut to crack.
But, given what the last global meltdown did to the world’s economies and the seeming inevitability – in the face of the failure of governments to actually control the financial sector – of a next, worse one … the least the rest of us can do is make them pay for their own next bailout.