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Who’ll move first to support the Robin Hood tax?

Chris Gardiner

by Chris Gardiner

08 Apr 05:35am

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Filed under: Charity, Henry Review, Tax

51 comments

So who will be first to support the international ‘Robin Hood Tax’ – Kevin Rudd or Tony Abbott?

The Australian's Jon Kudelka

We can leave Mr Rudd to Gordon Brown to persuade. The question is whether a modern day Friar Tuck could tap into Mr Abbott’s policy pragmatism (or idealism, depending on your point of view) to persuade him to commit the Coalition to this great idea. Or perhaps Angela Merkel’s conservative lead on the proposal would be enough.

The proposal is for a 0.05% tax on international financial transactions. This small tax could raise approximately US$400-billion a year for investment in hospitals, or clean energy infrastructure, or water programs, here and in developing countries, to suggest three examples.

Communities in Australia and around the world need and demand more investment in infrastructure. They need more programs that promote the common good by underpinning growth in human capital and removing barriers to productive involvement in the economy.

We know that private investment should be a priority. But we also know that public revenues need to be raised and allocated, and we need clever taxes that are not so burdensome as to be counterproductive. Putting such a small tax on the transactions that have come to dominate international finances, but that have thus far escaped the taxation net, would be a simple and strategic policy move.

Australian voters will be asked in the near future to make up their minds about the Henry Tax Review, and about preferred paths to tax reform. We know that our challenge in the next few budgets is to prevent the public debt created by the government’s stimulus initiatives to blow out further. We also know, though, that considerable public infrastructure issues remain to be addressed. Amongst most voters there is also commitment to public investment in clean energy infrastructure.

Moreover, we know that the productivity of poorer countries in our region could be boosted considerably by tackling their public infrastructure and public health needs, and that we would benefit as a country in the generation of global wealth that followed.

Renowned capitalists George Soros and Warren Buffet as well as Mrs Merkel have given their backing for the proposed tax, so Tony Abbott would not be out of place in arguing this case in the Coalition party room. It would be a natural element in any social democratic re-working of the tax system by Mr Rudd.

So who will be the lead Australian ‘merry-man’ in supporting the new ‘Robin Hood Tax’ – Mr Rudd or Mr Abbott?

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51 comments

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    • watty says:

      06:19am | 08/04/10

      Quote “Australian will be asked in the near future to make up their minds about the Henry Tax Review, and about preferred paths to tax reforms”

      Presume you are referring to the Henry Tax reforms which Rudd keeps locked in his office safe?

      You’re not serious surely?

      Reply

    • John A Neve says:

      01:36pm | 08/04/10

      Wayne,

      I don’t really think this is the correct forum for my views on our political scene. But quickly, I am opposed to the politics of divison, I think they destroy rather than build. When you have what amounts to a two party system, it is even worse, it polarises the electorate. As a result you end up with rusted on supporters, who can see no wrong on their side and no right on the other.

      I also believe a two party system such as we have destroys the real concept of Democarcy.

      But I could be wrong?

    • John A Neve says:

      06:43am | 08/04/10

      Why not go the whole hog and replace existing taxes with a Financial Debits Tax?
      Will the top end of town ever pay their fair share of taxation?
      Will the PAYE tax payer continue to carry this country?

      Let’s have an open investigation of all forms of taxation, or are our pollies scared of the findings?

      Reply

    • Wayne Fehlhaber says:

      10:27am | 08/04/10

      Prime Minister Rudd is bloody terrified of the Henry Tax Review , any reform is governed by risk to Rudd’s popularity . If it causes public pain ,it has no chance and that is why the Henry Review is locked away in Rudd’s safe. He is not a P.M. from which we can expect reform if there is any risk of his popularity diminishing in the process. Why advocate another tax when the G.S.T.can be adjusted . ? I’ll tell you why they would opt for another tax , Labor are terrfied of increasing revenue via the G.S.T. because it create disgruntled voters . Loss of popularity. !
      The G.S.T. was the most dreadful tax ever to see the light of day , according to Labor. But guess what !  ?  They are leaving it right where it is because it is providing ever increasing revenue to the states. Do they have the guts to increase G.S.T. ?  Not bloody likely. !

    • John A Neve says:

      12:01pm | 08/04/10

      Wayne,
      We seem to be moving of the topic!!  However, I would oppose an increase to the GST on the basis that it is not a fair and equitable tax.

      What is required is one fair tax for all and it can bedone.

    • Mark says:

      12:42pm | 08/04/10

      John A Neve
      There was an idea raised back in the day of replacing all income tax with GST.
      If, for example, we were to abolish all income tax, but increase the GST to a rate of say 20-30%, it would become well balanced as those with the highest disposable income would pay the most tax.
      Unfortunately I’m not sure how well it would work in this day and age, as most would simply purchase the more expensive items from overseas and ship them in, but it is an interesting idea.

    • Wayne Fehlhaber says:

      12:37pm | 08/04/10

      John Neve   :  John , first up , i’m like everybody else , i don’t like taxes.
      You dont accept G.S.T. as a fair and equitable form of tax , I definately do.
      Everybody spends money and pays G.S.T. accordingly.
      We can go into the pros and cons but our subject is not G.S.T. , it is how to gain more revenue .  F.D.T. is a measure to be considered , yes.
      However , the govt. that decides to introduce such a measure would likely be under greater pressure than what the Howard/Costello govt underwent to introduce G.S.T.  Sometime , a govt. of one colour or the other has to bite the bullet.  If i were Nostradarmus , i would predict that it would be a Liberal govt. to do so and that they would be on the nose
      afterwards. There is no doubt any govt. will ultimately pay the price for reform .
      John , how do we go about putting intestinal fortitude into a govt. to do what has to be done. ?

    • John A Neve says:

      12:57pm | 08/04/10

      Mark,
      Yes, you are correct a FDT was raised, by a few, as an alternative to the GST. Unfortunately, for reasons known only to themselvs the coalition of the day rejected it!!!


      Wayne,
      Sorry, not every one pays GST, ABS holders can claim it back and those on a pension firstly got a one of payment if memory serves me and a allowance on the pension. More to the point many multinationals can avoid it.

      As to “intestinal fortitude” in government; you know my views on that one Wayne. All the time we keep returning either Tweedle Dee or Tweedle Dum, we will kep getting screwed.

    • Wayne Fehlhaber says:

      01:38pm | 08/04/10

      John Neve :  An A.B.S. holder claims it back where it is charged on his purchase invoice , yes , because he is legally reselling the item , he did not buy it for himself , it is for a customer.  The ABS holder then adds his margin plus the GST and sells the item on. If he buys an article for himself , he has to pay the GST. The customer who is buying the item from him is the payer of the GST in the final transaction. Very simple system.
      Not sure of the context in which you are using the one off payment to pensioners and the increase offset.  Surely you accept that pensioners needed the extra to cope with the added living cost.
      Lets assume Tweedledum is Labor and Tweedledee is Liberal , both of whom ” keep on screwing us ” as you so elegantly put it.  You , John Neve , push Tweedledum’s barrow in most posts , knowing that they are still ” going to screw you “.  This is where i find it difficult to understand just where you sit in the midst of Australian politics. Enlighten me John , please.

    • Toby says:

      02:26pm | 08/04/10

      Wayne,
      Riiiiiight,  ABN holders never buy an item for themselves and claim it as part of their business do they wink
      But I guess brickies need flash new V8 utes to get to site quicker.

    • Wombat says:

      05:40pm | 08/04/10

      John A Neve
      You’re right, the GST is a regressive tax. Any Year 10 economics text will tell you that. Unfortunately it’s here now, it’s a huge money-spinner and it’s not going away.
      We actually had a Bank Accounts Debits (BAD) tax until a few years ago. It was one of the taxes abolished when the GST came in.
      This latest proposal looks like a Tobin tax. A Yank named Tobin first proposed it nearly 40 years ago. Any time it is even mentioned the spivs and shonks in suits go off their nuts. And that’s at .05%.
      It is generally agreed by economists that the real advantage of this tax is that it throws a bit of sand in the wheels of international financial transactions, thus providing a small disincentive against speculation without unduly affecting trade or commerce. There is a pretty persuasive argument that if such a tax had already existed, the GFC either wouldn’t have occurred or would at least have been less severe.
      The billions of dollars that such a tax would raise is generally seen (by economists, not politicians) as a side effect of the tax rather than a reason for introducing it.
      You might be aware, John, that getting money out of a rich man can be very difficult. Even at .05%, the proponents of this tax are in for a fight.

    • Robert Smissen of Rural SA says:

      06:18pm | 08/04/10

      Sounds like a good reason to pack up & move your business overseas. You will never make the poor richer by making the rich poorer. Tax incentives to business to invest can mean more jobs. Arising tide lifts all boats.

    • Wayne Fehlhaber says:

      06:56pm | 08/04/10

      Toby : I understand your skepticism ,  but do remember all business is subject to A.T.O. audit . They can be caught and punished just as PAYE earners can be dealy with. Certainly , some will take that risk but eventually they get caught Toby.

    • Louis McLennan says:

      06:53am | 08/04/10

      No added tax, no added government make for less FAIL.

      Reply

    • Dinny says:

      07:25am | 08/04/10

      I’m confused…hasn’t the Labor government always robed the middle class to give to the others…..........haven’t the middle class, hard working families paid for labor’s incompetence….....isn’t the labor government all about wealth distribution? Rudd has never cared for the hard working middle class families, what else is new?

      Reply

    • John A Neve says:

      10:16am | 08/04/10

      Dinny,
      Like you “I’m confused”, just who are the “middle class”?
      Whatmakes you say Labor is about “wealth distribution”?
      What makes you think the the “middle class families” work any harder than any one else?
      I await your replys.

    • Shane From Melbourne says:

      02:33pm | 08/04/10

      That’s a load of BS. The Howard and Rudd Government have been strong supporters of Middle Class Welfare. It’s the DINKs and SINKs that should be crying robbed.

    • Robert Smissen of Rural SA says:

      06:31pm | 08/04/10

      Dinny the Labor party are people that wear suits & have soft hands, not one of them would have sweated at work.

    • Gerard says:

      07:43am | 08/04/10

      Quite simply, the tax won’t come out of the pockets of the “rich”. It will come out of workers’ (serfs) pockets.
      Even simpler, it won’t reach the poor, hospitals, schools etc. It will be syphoned off to the “mates”.
      Haven’t you people woken up yet?

      Reply

    • Paul says:

      08:15am | 08/04/10

      Oh dear. It’s not starting up in Australia now surely? A very small percentage of a very, very big number still adds up to a huge tax. One that will eventually be passed to consumers in one way or another. To talk about a “tiny tax” in the same breath as speaking of the huge amount of money it will raise is really quite silly.

      Reply

    • Ian says:

      11:10am | 08/04/10

      It’s a ridiculous idea, already proven as highly unworkable, and dismissed by several of the world’s smartest countries who are very aware of the serious damage it would do to their economies. 

      I heard it being described as an attempt at public “looting” so money could be commandeered and redirected to questionable coffers. Such a thing is politically impossible because it would drive some of the highest income-tax paying businesses and investors into the ground, or to India and other offshore-readied countries, and that’s the last thing Australia needs.

      Paul and Bretton Woods are both intellectually and economically correct.

    • Kim says:

      02:06pm | 08/04/10

      @Ian, maybe, rather than driving the larger business’ off-shore, it might make them start investing in their own country?  Maybe.  If superannuation wasn’t impacted by this move, maybe it might work.  Otherwise, you’re probably right it’s just public looting.

    • Ian F says:

      09:26am | 08/04/10

      It is now over 100 days since the Rudd Government received the Henry Tax Review.

      Reply

    • Eye4anEye says:

      12:39pm | 08/04/10

      Yep and I’m betting they miss the days when an office fire would clean up the bad news - Damn electronic copies these days huh Kev.

    • Robert Smissen of Rural SA says:

      06:22pm | 08/04/10

      I’m not sure the little bugger is in Oz at the moment.

    • Bretton Woods says:

      09:41am | 08/04/10

      This tax is a waste of effort that will be passed on to consumers. Australia is trying to promote itself as a financial services hub. You won’t do that if you add to expenses.

      The tax is simply a popularist approach from the intellectually bankrupt.

      If you want more money for hospitals, schools and roads how about cutting the size of the public service, force the public service to work as hard as the private sector and cust middle class welfare - all those baby bonuses, FTBs and FHOGs could be much better spent.

      You could also cut out State governments and save a lot of money by increasing the size of local Councils (another drain on the system)

      Reply

    • Jade says:

      10:21am | 08/04/10

      Sounds like a brilliant plan to me! smile

    • Kim says:

      02:20pm | 08/04/10

      There’s a reason that we have such a large public service.  It’s called “keeping the masses employed” who then pay taxes and it also makes the government look good about low unemployment figures.

    • AdamC says:

      09:57am | 08/04/10

      My view on this is that anyone afforded the privilege of public office should have to sit some kind of governance/common sense test where they sign-off that they are not stupid enough to believe you can create revenue from nothing. Wait, scratch that, they should have to sign-off that they are not cynical enough to peddle these crummy ideas in the wake of a GFC.

      Seriously, this ‘debit tax’ proposal (that is what everyone used to call it) used to be a staple of the political idiot fringe. All these toxic assets must have melted some policy-makers’ brains.  It doesn’t take a genius to realise that such a tax will increase transaction costs and reduce market liquidity. This might be one of the reasons why the IMF (which originally proposed the idea) has dropped it in favour of a tax on bank cash-flows. 

      This is one of the silliest ideas to come out of the post-GFC policy silly season.

      Reply

    • John A Neve says:

      10:13am | 08/04/10

      AdamC,
      I must disagree, a Financial Debits Tax would put more money in most peoples pockets. Ask yourself what is the total amount of tax people pay now? Petrol, alcohol, smokes,GST,income tax,land tax, etc.

      One tax of 2-3% on every financial debit of an account would raise more money and leave people better off.

    • David C says:

      10:42am | 08/04/10

      I cant agree John A Neve, the tax will simply be paid by consumers in some way, which will leave them worse off. The banks will simply raise fees in other areas to cover the new tax This will umtilmately flow down to consumers eventually

    • John A Neve says:

      11:10am | 08/04/10

      David C,
      People/companies will only be taxed on financial debits, unless you make a withdrawal you will not pay tax.
      As for the banks; what are they going to charge for?
      If you are not paying all the current taxes you must be better off added to which the government will have more revenue. Also a saving on administration, so simple.

    • David C says:

      11:05am | 08/04/10

      is it a debit tax or a transaction tax?

    • Stewie says:

      11:32am | 08/04/10

      What is even worse Adam, is the HIDE that failed foreign countries and the lunatic fringe inside them, can embarrass themselves by attempting to force-feed their crackpot ideas onto independent sovreign nations at the other end of the earth.
      Robin Hood’s mythical character was a crook!
      For anyone who is interested in, or trained in interpreting economic news, they will be aware that the IMF, Canada, USA, Korea, India and most significantly APEC’s economic branch (on behalf of every Asia-Pacific country) sensibly rejected this crazy idea.

    • John A Neve says:

      11:57am | 08/04/10

      David C,
      I don’t know the details of this proposal. But what I am suggesting is a Financial Debts Tax, to replace all other taxes.

    • David C says:

      12:03pm | 08/04/10

      JAN thought so , Im afraid you have it wrong , the article relates to a plan to impose a financial transactions tax

    • John A Neve says:

      12:17pm | 08/04/10

      David C,
      I wish you had read my very first post on this issue and my post in response to your question. No I don’t have it wrong, I just offered an alternative.

    • proudtobeableedingheart says:

      10:49am | 08/04/10

      Isn’t it called a Robin Hood tax because it taxes the rich? The people that are making these huge transactions? It’s not like any of the middle class are gonna be making large transactions and then getting taxed. Oh and yes, it will get passed on to consumers, but I personally think its a good thing as long as the money gets used for something worthwhile like investing in renewables or in foreign aid.

      This type of tax also sends a message, its a tax on the movement of money. When you think about the amount of money that people in developing countries have, the amounts transacted in Australia are an absolute insult - doesn’t this tax make us recognise that we have all this money at the expense of others? We should all pay up and support those less better off.

      Reply

    • Kim says:

      02:24pm | 08/04/10

      @proudtobeableedingheart - Are you talking communism?

    • watty says:

      11:56am | 08/04/10

      Now where did I read about the Victorian Labor Party fund raiser @$5000 a plate?

      Redistributing the wealth I presume?

      Reply

    • Mark says:

      12:25pm | 08/04/10

      This tax is a great idea. Sorry Mr Woods. What’s wrong with try to change behaviour, particularly hedging that we pay for anyway as this type of activity in inflationary.

      Eg.  a company in South Australia uses fast processing computers to undertake hundred of transactions a minute to make 0.01 cents a transaction and earn millions by not actually creating anything, but simply deriving money out of thin air. This is an acceptable practice, but this activity is inflationary so we all pay for it in the long run anyway.

      It’s also an incredibly efficient tax. Hard to avoid, costs little to maintain. Hell it would put the tax office out of business.

      Reply

    • Ben says:

      12:16pm | 08/04/10

      Working on the assumption that this tax could be collected efficiently and equitably…a very wild assumption; who decides where the money goes? The use of foreign aid has been so questionable in funding dictators and “awareness” programs rather than actually helping the poor. It will become the ultimate slush fund for either side of politics.

      By the way John A Neve, given the “fundemental injustice” that Rudd called the GST, which he kept, do you really think he would remove any other taxes?

      Reply

    • John A Neve says:

      01:03pm | 08/04/10

      Ben,
      What has Rudd got to do with it?
      PM’s come and go, more to the point, what are you going to do about it?
      This is a claimed Democracy is’nt it?
      Why bother to vote if the government does not do what the people want?

    • Andrew says:

      01:03pm | 08/04/10

      Only 0.05%? That;s nothing. I’m paying 6x that to Westpac now thanks to their new foreign currency purchase credit card fee.

      Reply

    • BULMKT says:

      01:17pm | 08/04/10

      Chris,
      That’s a really dumb idea – an international tax on financial transactions. Only progressives (aka socialist) would come up with such a stupid punitive idea.
      The idea of Central planning has failed.
      We don’t need any more f..king taxes. We need governments to cut spending. Middle class welfare in this country is out of control. You only need to look at countries like Greece, Italy and Spain to see how stuffed they are thanks to successive governments over spending public money.
      The free markets (aka capitalism) is the only way forward. Capitalism isn’t perfect, but it’s the best system we’ve got.
      All you are about is wealth distribution plain and simple. I work hard for my money and I don’t need nor want dickheads like you interfering.
      Socialism and communism are failed political philosophies.  How many lives were destroyed in pursuit of these destruction ideologies – hundreds of millions – from Stalin, Mao, Hitler and Che.
      George Soros is an elite who spouses Marxist doctrine. He’s bank rolling most of obama’s leftist political policies. Return of the socialist elites isn’t something we want

      Reply

    • BULMKT says:

      01:31pm | 08/04/10

      The progressive goal is always the same - Benefit the collective at the expense of the individual. So is the pursuit of happiness now a collective thing rather than an individual thing?

      Reply

    • Shane From Melbourne says:

      02:41pm | 08/04/10

      Great Idea. Tax capital outflows of the country, zero rate capital inflows into the country. Cuts down on offshore tax havens and transfer pricing. Sould be done as a unilateral level though.

      Reply

    • Logan says:

      05:43pm | 08/04/10

      Rudd must be scatching his head silly wondering how we keep letting him get away with it….............................again?

      Reply

    • Paul says:

      10:26pm | 08/04/10

      This kind of tax will result in our wealth going where it always goes in the third world: into the hands of corrupt rulers and bureaucrats, and private corporations who don’t do what they say they’ll do.

      And we will have the first step on the road to global taxation, meaning taxation without representation for all of us.

      Reply

    • Stewie says:

      10:25am | 10/04/10

      “It is said that[Robin Hood fought against the looting rulers and returned the loot to those who had been robbed, but that is not the meaning of the legend which has survived. He is remembered, not as a champion of property, but as a champion of need, not as a defender of the robbed, but as a provider of the poor. He is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own, by giving away goods which he had not produced, by making others pay for the luxury of his pity. He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don’t have to produce, only to want, that the earned does not belong to us, but the unearned does. He became a justification for every mediocrity who, unable to make his own living, had demanded the power to dispose of the property of his betters, by proclaiming his willingness to devote his life to his inferiors at the price of robbing his superiors”.

      Ayn Rand (1905 - 1982)

      The same charities, with obsessive followers, receive repeated media scrutiny:

      http://www.ethiosun.com/geldof-never-helped-the-starving-he-helped-himself-and-the-gangsters-ruling-ethiopia/

    • Just ME in T says:

      08:21pm | 11/04/10

      Is this really asking you to be part of the World’s Greatest Bank Job (ha ha ha ha) or a conniving way to encourage you to be a part of the Worlds Biggest Con Job?
      I just have to wonder how many folk actually have heard about the ‘Robin Hood Tax’ ? - (RHT) and more importantly have taken the time to find out what it is? where it comes from? what is actually involved? Let me tell you right now it involves BILLIONS OF DOLLARS, and of course, should it come to pass, just who will administer it?

      http://just-me-in-t.blogspot.com/2010/04/men-in-tights.html

      Reply
 
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