Feared by the banks, loved by the gullible
In explaining how he avoided falling into the common liberal trap of supporting the Iraq war, Dan Davies listed the maxim “Good ideas do not need lots of lies told about them in order to gain public acceptance“. The fact that all the main proponents of the Iraq war were lying like rugs about WMDs inherently casts doubt on the case for war, even if you believe that a war for regime change would have been justifiable in its own right.
I was reminded of this when looking at the website for the Robin Hood Tax campaign (the Robin Hood Tax is the new, nauseatingly cute, name for the Tobin Tax on financial transactions):
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.
The Robin Hood Tax consists of a levy on:
financial assets such as stocks, bonds and foreign exchange, traded both physically and as derivatives (options, forwards, futures and swaps).
Hence, any money you change (whether for a holiday or for remittances) and any investments that your pension fund makes will, very obviously, be taxed under it. The tax will, definitely have a negative impact on ‘good’, non-casino-y transactions like people buying shares in companies to generate income for their retirement, or companies converting euros from their export sales into pounds.
This doesn’t, in and of itself, make the Robin Hood Tax a bad idea. That negative impact could well be outweighed by the benefits of the revenue raised and of dampening the speculative excesses of the global financial system (I’m sceptical of the latter: we all know with each successive crisis the speculative excesses of the GFS turn out to be concentrated in areas that aren’t regulated or taxed or indeed understood. But that’s for another day).
But the tax’s proponents are simply lying that the negative consequences for the real economy simply don’t exist, rather than acknowledging them and saying that the benefits are larger. And that definitely triggers my Iraq filter.