Robin Hood Tax - Dear G20 and Bill Gates....

[sharon sanders]

Robin Hood tax: 1,000 economists urge G20 to accept measure G20 finance ministers urged by experts from 53 countries to tax City speculators to help the world's poor

snip

"The financial crisis has shown us the dangers of unregulated finance, and the link between the financial sector and society has been broken. It is time to fix this link and for the financial sector to give something back to society," the letter says, adding that a Robin Hood tax is "technically feasible" and "morally right".

http://www.guardian.co.uk/business/2011/apr/13/robin-hood-tax-economists-letter

 

[alert]

Re: Robin Hood Tax - Dear G20 and Bill Gates....

Ouch. I'm not sure if this line of discussion is appropriate, as it may quickly get political, but assuming we want to allow this discussion, it sets off several concerns IMO.

The tax proposed would be a truly international tax; it would be a tax imposed by some world body to be distributed to the poor. Given how unpopular even federal taxes are in the United States, I would imagine there would be widespread opposition to such a plan. I am not aware of any such tax currently in existence. Worse yet, it would be an explicitly redistributive, which would tend to anger certain groups.

I thought one of the points of economics was to remove one's morals from the discussion; economics can tell us the consequences of certain actions, but they cannot tell us what is right.

But deeper than that, assuming we decide such a goal is worthy, I am surprised that economists would suggest such a method of accomplishing it. I suspect it might serve to "gum up the wheels" of the financial system. Transaction taxes would serve as a disincentive to make transactions. I would think that the same objective would be accomplished with much smaller deadweight loss to society simply by "seizing" (taxing) the wealth of those you wish to target. Levying the tax as a transaction tax would shrink the size of the market, and probably result in substantial job loss, including among those who are not wealthy.

To me, this article is highly political and very strange.