Tags: Robin | Hood | Trading | Tax

NY Times: ‘Robin Hood’ Trading Tax Gains Momentum

Wednesday, 07 Dec 2011 02:28 PM

Need some fresh revenue to narrow a deficit and curb market volatility all at once?

Enter the Robin Hood tax, which levies small taxes on trades in stock, bond and other securities transactions.

Billionaires like Bill Gates and George Soros are behind it and so are world leaders like former Vice President Al Gore, consumer activist Ralph Nader and Pope Benedict XVI, according to The New York Times.

Current leaders support it as well.

"We all agree that a financial transaction tax would be the right signal to show that we have understood that financial markets have to contribute their share to the recovery of economies," German Chancellor Angela Merkel told her Parliament recently, the Times adds.

Experts says it will pick up more steam in Europe once the debt crisis abates a little.

"There is some momentum behind this," says Simon Tilford, chief economist of the Center for European Reform in London.

"If they keep the show on the road, they probably will attempt to run with this."

U.S. labor groups love it.

"The tax is a good idea because banks are where the money is. It’s the same reason Jesse James robbed banks," says Rose Ann DeMoro, executive director of National Nurses United, the Times adds.

"The thing about the financial transactions tax is it's stunning how quickly people get it and how fast they embrace it."

The Obama administration, however, may worry that taxing financial transactions may actually fuel volatility instead of curbing it.

The tax would arguably reduce the volume of trading but when investors do jump in the market, they'll come in bigger and faster all at once to dilute exposure to the tax that would come from trading more frequently.

"We share the goal of wanting a more stable financial system. We share the goal of wanting a more progressive tax system. The only real questions are — what’s the best way to do that?" a senior administration official told The Washington Post recently.

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