Anorak News | The Robin Hood Tax Is Unworkable, Ridiculous And Supported By The Elite

The Robin Hood Tax Is Unworkable, Ridiculous And Supported By The Elite

by | 15th, June 2011

TO the City of London for the Robin Hood Tax Protest. To protest against bankers, the campaigners set up a giant roulette table in a satire on them gambling with our money. Peter Kennard’s gaming board was in front of the Royal Exchange. The bankers could not lose; teachers and nurses lost their jobs. It all looks great. Then we look at the Robin Hood tax website. We learn:

A tax on banks that would give billions to tackle poverty and climate change, here and abroad.

And this is where it goes awry. They want to tax the rich to pay to fight the weather and feed foreigners? And that will be popular how..?

The Guardian concocted this headline – that is not a parody:

How the Robin Hood tax could help fight climate change in the Outer Hebrides

Toby Young put it thus:

The idea is to tax all bank transactions not involving members of the public by approximately 0.05 per cent and use the resulting revenue “to tackle poverty and climate change”… There are several problems with this proposal. First of all, it’s entirely possible that the cost of collecting a tax of 0.05 per cent would be greater than the amount of revenue it raised. Then there’s the issue of who would decide how the money would be spent…

But the real problem with a financial transaction tax — the reason it has never been introduced and never will be — is that no country is going to impose it unilaterally for fear of placing its own banking sector at a competitive disadvantage. If Britain introduced a Robin Hood Tax, for instance, the international banks that are headquartered here would simply relocate to a country in which their transactions aren’t taxed.

Yes, but the main problem is that tax will be passed onto the consumers. Although they say:

The Robin Hood Tax will not impact on personal banking or on retail banking. That’s because it targets a distinct area of bank operations – high-frequency large-volume trading, undertaken by financial institutions in the ‘casino economy’. 

If you change money to go on holiday, send remittances abroad, invest in a pension fund or take out a mortgage, you will not be affected by this tiny tax.

Anyone who knows anything about banking will scoff at this. It is ridiculous. Tim Worstall sums up:

Here’s this tricky little thing in economics called “tax incidence”. There’s a difference between who hands over the cheque and who actually carries the economic burden of a tax. Your employer hands over the cheque for the income tax taken under PAYE but no one at all thinks that your employer is carrying that economic burden: you are. Same with NI.

The incidence of corporation tax is largely on the workers in the form of lower wages, some on the shareholders in lower returns. The company certainly never pays a penny of it.

And note that this isn’t people “trying” to pass it on, it’s just that the existence of a tax changes behaviour and thus the burden of it can be on a quite different set of people than those it’s presumably aimed at.

The incidence, the economic burden, of the Robin Hood Tax will not be on the banks or the bankers. It will be upon all users of the financial system. Everyone with a bank account for example. Everyone who buys foreign currency to go on hols. Everyone who buys something from a company which has a bank account, makes money transfers, buys foreign currency to import something.

Yup, the tax will actually end up being paid by all of us, the poor bloody civilians.

And to put the tin lid on, why have the Robin Hood tax campaigners solicited the help of rich actors like Bill Nighy and Sam West to front their campaign? Nighy’s video was created by that working stiff Richard Curtis.

The only way you are going to get change – real change – is if the masses actually rise up and smash the Cityand the political elite to bits. But that will not happen. Instead, you get actors and a campaign based on a pipe dream…

Posted: 15th, June 2011 | In: Money Comments (3) | TrackBack | Permalink