Fighting for the FTT at global level!
The combination of a recessionary squeeze in tax revenues and the money that governments have had to spend to rescue the financial sector as well as stimulate the broader economy has increased the prospects of a fiscal crisis with many rich and poor country governments facing budget deficits of an unprecedented magnitude.
Based on calculations of the Austrian WIFO economic research institute, a global financial transaction tax of 0.05% could yield revenue of about 1% of nominal world GDP per year. You can download the WIFO study hereunder.
As German SPD put it, this would cover about half of the annual additional fiscal resources mobilized by G20 countries for anti-crisis measures (approx. 2% p.a.). A rough estimate of the revenue potential for Germany stands at about 10 to 20 billion EUR per year. The debate among finance ministers in London in the run-up to G20 has shown a basic agreement that burdens of the financial crisis ought to be shared in a fair manner. You can download the SPD position paper here.
Autumn 2009: G20 and EU leaders looked at the financial transaction tax
At the G20 in Pittsburgh, Merkel put forward the idea of a financial transaction tax. G20 tasked IMF to probe "Tobin tax" (Reuters): “We task the IMF to prepare a report for our next meeting with regard to the range of options countries have adopted or are considering as to how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system.”
Leaders’ Statement – The Pittsburgh Summit September 24–25, 2009
From 2010: When it comes to implementation...
The IMF launched an online public consultation on financial sector taxation in December 2010 (click here to download the consultation note), to seek views from the public on the matter of financial sector taxation (click here to access the consultation page).
The online consultation attracted more than 90 responses from CSOs, academics, the private sector and government officials. A significant number of the submissions included research papers and policy briefs. The report was presented to the G-20 Finance Ministers at their April meeting in Washington, D.C.
Since then, no decision has been taken so far at G8 or G20 level to implement a financial transaction tax at Global Level. In Europe, those who are against the FTT, say they want it at global level.
In 2011, the IMF published a "Working Paper Taxing Financial Transactions: An Assessment of Administrative Feasibility", showing that the implementation of a global FTT was feasable. It is just a matter of political will...
At global level, hundreds of thousans of people, including economists, politicians, citizens, and citivl society organisations, are in faour of a financial transaction tax.
• Academics: Stiglitz, Paul Krugman, Danny Rodrik, Geoff Sachs, Paul Volker, Keynes!
• Politicians: Sarkozy, Merkel, Brown, Pelosi, Rasmussen, Junkers. Obama supported the FTT during his campaign. Barney Frank want it to be global. Barroso has been favourable, as have the Austrians.
• Other key financial figures: Adair Turner, George Soros, Warren Buffet
• Media: Le Monde, The Mail, The Guardian, New York Times…
• Celebs: Richard Curtis among others