Of the proposals made to tax Wall Street's financial transactions, the best-known and presumably best-funded is the "Robin Hood Tax." Represented in the US as the "Inclusive Prosperity Act," introduced by MN Rep. Keith Ellison, Robin Hood is curiously sponsored by the British NGO OxFam, who promotes it with slick viral videos featuring well-known British actors like Bill Nighy.
While we at UFAA are broadly supportive of Robin Hood's goals and have been present at a number of Robin Hood demonstrations held by the National Nurses United, one of the unions promoting the tax, we are obligated to offer the following criticisms:
1) The tax rates are too low!
This is not only too low for our tastes, it's much lower than the rate demanded by similar bills, such as the proposed "Harkin-DeFazio" tax (0.03% or 6X the rate of Robin Hood) and John Conyers' HR 1000, which applies a rate of 0.02% (4X)
Derivatives include the most dangerous types of financial speculation, such as the credit default swaps that crashed the housing market or the energy derivatives and agricultural futures that comprise up to 1/3 the cost of your gasoline and grocery bills. Robin Hood attacks the stock market in a fairly aggressive manner, but leaves these derivatives relatively unscathed.
We emphasize that a Wall Street Sales Tax has a two-fold purpose: 1) to generate revenue, and 2) to penalize non-productive speculation, which redirects money flows toward productive investment. Robin Hood offers no convincing arguments that such a small tax is sufficient to accomplish either goal.
2) The money is not earmarked!
While Ellison’s bill and the Robin Hood group suggest ways the money might be spent, there are no guarantees. This is not true of Conyers’ HR 1000, which puts the tax revenue in a trust fund to be used for job creation. Furthermore, much attention is given by Robin Hood to mitigating global warming, fighting AIDS and similar areas that might offer new markets for Wall Street speculation (ie carbon futures), but offer little or no economic value to the American economy.
We insist that the revenue of this tax in the United States be split evenly between the federal and state governments, where it must be used first and foremost to fund social spending like Medicaid, Food Assistance, Unemployment Insurance, State contributions to public education, and other programs threatened by Washington's austerity agenda.
Or if you really want to get some attention, why not attach the tax to a proposal to fund a major new social program like Medicare for All? With 25 co-sponsors, Ellison’s bill stands little chance of being enacted by normal means. Now is the time to fight in the court of public opinion, not in the halls of congress!
3) The name stinks!
“Robin Hood” may sell in England, but in the United States, it's red meat for reactionary Republicans, who will stoke the fear of the tax “robbing from the rich to give to the poor,” which for Rush Limbaugh and others is code for “robbing from white people to give to black and brown people.” In truth, the tax makes predatory financiers pay their fair share for the maintenance of the American economy.
It's time to call the tax exactly what it is: A Wall Street Sales Tax! The American people pay taxes on food, clothing, gasoline and other necessities – Wall Street pays no sales tax! What could be more clear to the average person?
While we cautiously support the goals of the Robin Hood Tax, we are highly suspicious of the unwise tactics employed, and the willful ignorance of superior proposals like Conyers’ HR 1000 or the Harkin-Defazio tax, both of which were sponsored by prominent legislators and had more co-sponsors than Ellison does. Why should an NGO from London (the dark heart of international finance) determine America's political choices? Robin Hood is likely better than nothing, but certainly much less than it should be.