Monday, June 20, 2011

A "Robin Hood Tax" could tackle poverty

Oxfam reports that a European tax on financial transactions could raise as much as €210 billion for poverty efforts and aid. A tax of .05% that would be placed on bonds, shares, currency and derivatives would raise a significant amount of money.

In light of the recent economic crisis, many people feel that this tax can be a way for the banks to repay their debt to society. Jeremy Hobbs, the International Executive Director for Oxfam, said: "This is the biggest opportunity to ease the financial burden on poor countries since debt relief. Europe has a chance to lead the world in making the financial crisis in the fight against poverty and climate change."

The Robin Hood tax, or financial transaction tax (FTT) has been supported by Nobel Prize-winning economists such as Paul Krugman and Joseph Stiglitz as well as notable individuals like Warren Buffet and George Soros. They believe that the FTT is manageable and possible to implement.

The United States and Europe have the opportunity to help the poor overseas through the FTT. The Borgen Project would like to see the United States take the lead in implementing a similar process on financial transactions in this country. Banks are continually making massive profits - the global profits and bonuses for banks in 2011 will probably fall between $600 billion and $1 trillion. Any percentage of that would significantly increase the amount of aid being sent abroad.

- Michael Kan