The title of the tax alludes to its ethos: taking from the rich and giving to the poor. After months of pressure from nurses, health care, labor, environmental and faith-based activists, the Robin Hood Tax—a type of Financial Transaction Tax—has taken the next step towards become a reality. But there is a long road ahead. On Friday, September 14, Representative Keith M. Ellison (D-Minn.) introduced a bill, HR-6411 “The Inclusive Prosperity Act,” in Congress that would place a tiny tax on Wall Street.
The bill begins, “To impose a tax on certain trading transaction to strengthen our financial security, expand opportunity, and stop shrinking the middle class.” The idea is simple: in the wake of the financial crisis, Wall Street received a major bailout, while many social safety net, infrastructure, and other programs are struggling to provide vital services that millions rely on. The tax places a levy of less than half of one percent on big financial transactions including the trade of stocks, bonds, derivatives, and foreign currencies. Economist Robert N. Pollin, co-director of the Political Economy Research Institute explains the basis of an FTT: “It would mean that financial market traders would pay a small fee to the government every time they purchased any financial market instrument. This would be the equivalent of sales taxes that Americans have long paid every time they buy an automobile, shirt, baseball glove, airline ticket, or pack of chewing gum, eat at a restaurant, or have their hair cut.”
The Robin Hood Tax has the potential to raise up to $350 billion in annual revenues that could then be directed toward various social programs both domestically and globally. The money from this tax could go toward creating jobs, strengthening health care and education infrastructure, and investing in clean energy in the U.S., while establishing funding for programs to fight AIDS, poverty, and climate problems abroad.
This would not be the first time that the United States has had a financial transaction tax. The U.S. had a transfer tax in place from 1914 to 1966 that put a 0.2 percent tax on the sales and transfers of stocks. The tax was doubled in 1932 to assist in overcoming the budgetary challenges imposed by the Great Depression. The tax disappeared in 1966 when lawmakers repealed it in an effort to streamline the tax system.
More than 40 nations are currently reaping the benefits of an FTT and using the revenue to finance a variety of services, while suffering few or no financial repercussion as a result.
The bill just introduced in the House by Ellison was assigned to the House Committee on Ways and Means. The bill has 10 cosponsors, including Representative James P. McGovern (D-Mass.). However, it must secure more political backing in order to become a reality.
Money raised from the FTT would be spread over a range of endeavors—from expanding resources for state and federal investments that protect health, physical infrastructure, and jobs to funding international prosperity programs such as climate change and AIDS treatment and prevention programs. The tax has wide appeal and should be an exciting prospect for organizations that have faced budget cuts in the midst of the financial crisis, and for students and young professionals who care deeply about social and humanitarian issues.
Today, the Robin Hood National Day of Action, activists from around the Boston area will rally outside the office of Representative Michael E. Capuano (D-Mass.), who represents all of Cambridge, to ask him to co-sign the current bill aiming to implement a Robin Hood Tax, HR-6411.
Capuano’s history of support for universal healthcare, affordable housing, improved educational opportunities and funding, and international peacekeeping show that his interests are in line with those of the tax. He was a staunch advocate of the Patient Protection and Affordable Care Act, has fought for increased Section 8 housing, and has built himself up as a champion of peace and development in the aftermath of the genocide in the Darfur region of Sudan.
Capuano himself agrees that “we remain too far from the goal of ‘universal access, zero disparities’” in the realm of domestic healthcare. Supporting the Robin Hood Tax provides Capuano a unique opportunity to stand up for the values he so clearly professes and to ensure that vital programs get the funding they so desperately need.
As members of the Harvard College Global Health and AIDS Coalition, we have a particular interest in the tax, which could go to funding global AIDS programs that have received far too little attention in the U.S. budget in recent years. We now have the tools we need to eradicate the AIDS epidemic and the Robin Hood Tax could ensure that we invest the necessary resources to bring about its eradication. Health activists are not pressing Capuano for a radical change in his politics. He is simply being called to stand up for a tax that would unite his domestic and international interests through the broader vision of global health and social welfare. If all goes well on today, Capuano just might be our Robin Hood.
Anthony N. Almazan ’16 lives in Canaday Hall. Lucas B. Gemar ’15 lives in Winthrop House. Isabel R. Ostrer ’14 is a social studies concentrator in Quincy House.