Tobin Taxes Update
May 2001
The Tobin Tax Initiative - http://ceedweb.org/iirp/
Date: Wed, 30 May 01 16:51:44 -0800
From: Ruthanne Cecil <cecilr@humboldt1.com>
IN THIS ISSUE:
--- 1 -- Editorial
--- 2 -- Tell it to the U.N....
--- 3 -- Argentina introduces...
--- 4 -- Soros says, tax me...
---
5 -- Organizing in Scandanavia..
--- 6 -- Spain, too...
--- 7 -- Bankers
now alerted...
--- 8 -- Dear colleagues...
--- 9 -- A simultaneous policy...
--- 10 - Great new book...
--- 11 - Good sites to visit...
-------------------------------------------
--- 1 -- Editorial - Update...
We have a
full newsletter this month, so will send it out in
2 parts over a two-week
period. We hope, especially for
those who may be receiving duplicate
copies through your other
listserves, that this will be less of an inconvenience.
It has been a busy and productive month in the
United
States. A new student chapter on Tobin taxes has formed at
Harvard
University, involving some of the student activists
who organized and engaged
in the student strike for living
wages for Harvard workers. We
wish them the same success
with their endeavors on currency transaction taxes
(CTT's). Their
first event, a panel/videoconference with Dr. James Tobin himself
(Nobel-winning economist at Yale) was well-attended and well-received.
Updates
will appear in this newsletter as we hear more from
this group.
In New York in early April, a conference on Tobin-style taxes
and carbon taxes
was held at the Global Policy Forum. Panelists
spoke on both topics
to an attentive audience of about 100 people. The
question and answer periods
were highly stimulating as well.
That same week, the
UN-selected High Level Panel looked at ways to
adequately finance development,
but failed to thoroughly study the
detailed economic literature which shows
the economic and technical
feasibility of CTTs. However, after numerous
meetings with the
G77 (Group of 77, developing nations), along with speeches
by non-
governmental organizations during UN sessions (see below), we were
successful in getting a G77 request for a technical note on CTT
feasibility.
If academic freedom is not stifled by special interests,
we expect a comprehensive
study to be forthcoming.....We will
keep you posted.
Within
a few weeks, an updated version of the U.S. Congress
Concurrent Resolution
will be re-introduced by Rep. Peter DeFazio
and his colleagues. If you
are a US citizen, you may want to ask your
House member or Senator to sign
on as an original co-sponsor, either
this week or next.
With the presidency of the European Union moving to Belgium
next month, we
expect an increase in activity on the European front.
Part Two of our newsletter
will be a European Update, drawing upon
the fine new monthly Parliamentary
newsletter on CTTs, and other
sources.
Activities are accelerating,
so stay tuned....
Thanks, the Editor.
----------------------------------------
--- 2 -- Tell it to the U. N. ....
(A non-governmental caucus statement
to a UN preparatory
committee meeting, attended by delegates of nearly all
nations,
May 7, 2001. The ODA/CTT mentioned below is Official Development
Assistance (foreign aid) and Currency Transaction Taxes
caucus of nongovernmental
organizations.)
--------------
It is an honor and a pleasure
to address the delegates to FfD III
on behalf of the ODA/CTT NGO Caucus.
We would like to address the means for
increasing international financial
cooperation for development by
addressing two issues: official development
assistance (ODA) and currency
transactions taxes (CTTs).
ODA is only one
financial instrument for poverty eradication and financing
global goods, but
an essential one. For many countries ODA will continue to
be vital. In spite
of these clear needs, developed countries have not
implemented commitments
to increase market access nor met their ODA
promises. While debt cancellation
can free resources for development,
neither trade nor debt relief can compensate
for the decline in ODA levels
over recent years. Both the quantity of ODA
commitments and quality are at
issue.
Donors should make measurable commitments
to increase aid
effectiveness. This would include a greater level of
generalized budget
support, and more buy-in for program rather than project
approaches. A
genuine transfer of ownership of development, without
imposition of more
conditionalities in whatever guise they may come, is absolutely
essential. Capacity building, too, will benefit from untying aid. The
differential impact of poverty on women requires specific and tailored
responses
that move beyond micro-credit.
Donors should reform aid procurement practices
by adhering to best practice
guidelines that support skills development, employment
creation, and the
development of small and medium enterprises. Governments
should explore
further how targeted procurement can ensure local economic
development and
the eradication of poverty together with ensuring that social
reproduction
is given due importance.
Regarding the levels of ODA, only
5 countries have reached or surpassed
0.7% of GNP. Denmark, Luxembourg,
Netherlands, Norway and Sweden are to be
congratulated in this regard. For
the remainder of the DAC countries,
however, the average for 2000 was a mere
0.22%. Immediate additions to meet
the 2015 goals of poverty eradication are
needed and grants rather than
loans are necessary. We challenge donor
countries to offer more than words
towards meeting the 0.7% target for ODA.
A specific timeline for the
delivery of targets will create the benchmarks
we need to monitor your
effectiveness.
Our second point is in regard to
currency transactions taxes or CTTs as
innovative means of providing finance
for development.
The global community insists on a rules-based system for global
trade in
goods and services, yet has virtually no controls on the global trade
in
money.
When portfolio investment fled during the SouthEast Asian and
subsequent
financial crises, prices skyrocketed, wages fell, companies went
bankrupt
and joblessness soared. Three decades of poverty reduction in Asia
was
wiped out within weeks. Until portfolio investment is regulated, and
systemic
volatility controlled, development will be constantly threatened.
G20 proposals
to repair the financial architecture in the wake of the
crises have been woefully
inadequate, as they fail to address the supply
side of the problem. This root
cause of financial crises can be addressed,
in part, through the use of currency
transactions taxes.
The debate on currency transactions taxes is being stifled,
however, by
those with a vested interest in volatility and those whom they
influence.
It is necessary to confront the myths that abound.
1.
CTTS are not global taxes that threaten national sovereignty.
2.
CTTS will not undermine productive investment flows.
3.
CTTS are not easy to evade.
Currency transactions taxes are national measures
implemented domestically
by any government with the authority to tax. CTT
measures are designed to
target short-term flows while negligibly affecting
long term investment.
They further enhance productive flows by reducing the
costs of hedging to
protect against exchange rate fluctuations. Asset migration
and
substitution can be prevented by implementing CTTs through the highly
regulated and centralized payments system controlled by central banks.
Currency
transactions taxes can provide billions of dollars of new
resources for sustainable
human development and the provision of global
public goods. CTTs can further
provide an enabling climate for development
by increasing the stability of
financial markets, a precondition for
development.
In Geneva at the Social
Summit, one hundred and sixty governments agreed to
a UN study on financing
for development which was to include analysis on
currency transactions taxes.
To date, this study has not yet begun. We
strongly recommend that the study
be undertaken immediately and be
completed prior to the Financing for Development
conference in Monterey in
order to make a meaningful contribution to the FfD
process. The final
outcome of the FfD must not be yet another call for a study.
The United Nations is a forum for fair, open and honest dialogue, debate
and
discussion. One of the newest and most innovative means to both finance
development
and to address the systemic volatility of the financial system
is before you.
We urge that you do not let this critical opportunity pass.
------------
--Speech
prepared by Robin Round and Ruthanne Cecil, for the CTT/ODA Caucus.
Presented
by Ruthanne Cecil at the UN, New York, on May 7, 2001,
to the assembled
delegates of the nations at III Preparatory Committee
of the Financing for
Development Conference.
------------------------------------------------
--- 3 -- Argentina introduces a measure....
In Argentina,
15 Members of Parliament from different political
parties have tabled a project
for a resolution asking for the
installation of the Tobin tax to fight against
the financial instability
under which the country currently suffers. The view
of the authors of
this resolution is that the fund raised by this tax should
be used in
priority to reduce the external debt of the poorest countries.
The text of the draft resolution is published on the website of the
World
Parliamentarians Call for the Tobin Tax: http://tobintaxcall.free.fr
(May
2001)
---------------------------------------------
--- 4 -- Soros says, tax me....
... In a surprise move George
Soros, the international
financier and philanthropist, has lent his voice to
calls for a 'Tobin tax'
- a levy on international currency speculation which
would be used to fund
education, environmental protection and medicines.
'I'm in favour of the Tobin
tax. It doesn't happen to coincide with my
personal interest, but it could
be a very good source of funds for
providing global [public] goods,' he said...
...Soros, whose funds suffered from the technology stocks collapse, has
found
common cause with anti-globalisation campaigners.
The campaign for the tax
is gaining ground among groups such as War on Want.
Campaigners see it as
the next international rallying call after the
moderate success of lobbying
for debt relief. The United Nations is
currently conducting a feasibility
study for the levy. War on Want is
lobbying for a tax of between a tenth and
a quarter of a per cent on $2
trillion of daily financial flows.
'There's
a valid argument for it, despite some problems with options,' Soros
said.
In the UK to promote his new book Open Society , he said that the
intellectual
property rights system for medicines was 'anti-competitive'. He
also saw merit
in a tax on international airline tickets to fund
development.
However,
Soros will not be manning the barricades outside meetings of the
International
Monetary Fund just yet: 'I'm not an unequivocal advocate of
the Tobin tax.
If the government eliminated speculative activities, it would
reduce the depth
of the market. The [benefit] depends on what it's used for...
--excerpted from
the Observer, March 11, 2001
Faisal Islam, economics correspondent
----------------------------------------
--- 5 -- Growth of a movement...organizing in Scandanavia....
ATTAC in Scandinavia, from an article by
By Michel Jerneval
SWEDEN -
The Attac movement has developed rapidly in Sweden since its
successful launching
on the 6th and 7th of January this year, and the
other Nordic lands are close
behind. The Swedish activists have
invited their neighbours to Sweden and
have visited them to discuss
Attac.... Attac.Sverige and Attac-Suomi-Finland
want to concentrate
on subjects like the Tobin tax, the debt question and
the internal infrastructure
associated with these, while the future of Attac
in Denmark and Norway probably
depends on how much the EU question can be
neutralised and how much tolerance
can be shown between people with opposing
views.
We have already received a great deal of information from Sweden. At
the moment the Swedes want to concentrate on building up their
infrastructure,
on developing their internal activities, acquiring new
members (they already
number 3500), demonstrations at home etc.
Relations with NGO's, the trade
unions and with popular movements is
excellent; and the strong media interest
continues. Instead of a
traditional committee they prefer the form of a working
group. In
short, Attac-Sverige has a well-filled basket. Key words are
enthusiasm,
volunteering, and a passionate resolve to succeed in the
international struggle
to make another world possible.
Contact sverige@attac.org,
http://attac.org/sverige/
DENMARK
There are similarities between Denmark and Sweden. The same
snowball effect,
the same success with the media, the same enthusiasm
and capacity to create
good contacts and the same reaction of the
traditionalist Right (both countries
have seen attempts to launch a
Counter-Attac).
At the first
meeting on the 24th of February, in a school in
Copenhagen, more than 1000
people came. The daily paper Information
(near the Social Democrats)chose
to take the same role as Le Monde
Diplomatique in France. On the 20th December
this Danish newspaper
launched a call for an Attac group in Denmark. Other
journalists woke
up and soon there were interviews in the press, on the radio
and on
television. Politicians, among them the Prime Minister, expressed
sympathy
for Attac. The counter-offensive was so vulgar that even more
people joined
Attac.
In Denmark, as elsewhere, a provisional committee was
voted in, with
the task of proposing a political platform and statutes. The
date of
launching has not been decided on but will probably be the end of
May
or the beginning of June.
NORWAY - Many efforts have been made to get
Attac started in Norway.
Several meetings have been held to create an open
front open to all
the movements in the country. The last meeting was on the
1st of March.
It was a success. More than 100 people, representing 90 organisations,
took part. A provisional committee was elected. It has the task of
preparing
statutes, deciding on membership dues and the political
platform.
Like the other Nordic peoples the Norwegians are preparing to start up
local
sections at work places, the universities and in the towns, and
it was decided
at this meeting to intensify activity leading to
launching. One goal is to
recruit scientists as members of the
committee. A monthly, New-Attac, will
replace the publication
Informasjonen.
During the debate
several participants emphasised that Attac is above
all an international movement
FOR an alternative to the globalisation
of the financial markets and neo-liberalism.
It seems probable that Attac-Norway could be launched at the
same time
as in Denmark (end of May, beginning of June).NORWAY norge@attac.org
http://attac.no
FINLAND - Attac Suomi-Finland,
the official name, has from the beginning
had excellent relations with the
trade union movement. The Food
Industry Workers lent their union headquarters
for the meeting.
On the 24th of January a large meeting took place at the union
headquarters and about 100 people attended (unionists, NGO's, popular
movements,
various political activists). A30-person strong work group
was elected to
plan the launching in the month of May. At Turku, one of
the large university
towns of the country, Attac-Finland
(Swedish-speaking) will be the launched.
More than 500 people have
already paid their dues and there are de facto local
groups in the
three big cities: Helsinki, Tampere, and Turku.
On the 27th
of February Susanna Rahkonen, Social Democrat, took the
first initiative to
a parliamentary group of Attac. Today 20% of the
members of the Riksdag (Parliament,
with 200 parliamentarians) are
members. The participation of the Social Democrats
and the Left Party
didn't surprise anyone, but that the Christian Democrats
joined is
surprising; their brother party in Sweden launched a defamation
campaign against Attac in Sweden and in Denmark.
If Attac has been such
a success in Finland, it is thanks to the Tobin
Tax. A very well known professor,
Heikki Patomäki, has written several
books on this subject. Kepa, an
umbrella organisation for the largest
NGO's in Finland constituted another
research group with Patomäki as
chairman.
Contact suomi-finland@attac.org,
http://attac.org/suomi-finland
Who would have imagined at the beginning of the year
2000 that Attac,
within six months, would be represented in four Nordic countries?
I
myself betted, that this year Sweden would become the second Attac
country
in Europe. With its 3500 members this is a fact. Let's bet
that the Nordic
Attacs will pull a lot of weight in the international
Attac family. They are
small countries, with 23 million inhabitants
between them. People with democracy
firmly rooted and with a long
tradition of social struggle.
--Michel Jerneval,
member of international Attac, responsible for the
link with the Nordic countries.
inter@attac.org, from ATTAC newsletter 77
------------------------------
--- 6 -- ATTAC Spain has been created
--from ATTAC Newsletter 81
ATTAC Spain was created
on 30th March, 2001 during the 1st Territorial
Conference in Barcelona which
was attended by delegations of congress
participants and observers from ATTAC
Andalusia, Aragon, Canary
Islands, Castillo Leon, Catalonia, Galicia, Madrid,
Mallorca and the
País Valencià (Autonomous Community of Valencia).
ATTAC, whose aim is to give back to citizens the power to make
decisions, proposes the creation of democratic mechanisms to control
and
regulate markets and the international financial system, such as
using the
tax known as the "Tobin Tax" to tax speculative transactions
on foreign exchange
markets and abolishing tax havens. Another of its
aims is to stimulate and
reinforce the development of active,
well-informed independent public opinion
worldwide. ATTAC considers
that the current situation - where, in order to
consolidate and
increase the power and wealth of a tiny minority, a large
majority
must suffer the destruction of nature and poverty, risk and
insecurity
- is both unacceptable and unfair and must not be allowed
to continue.
Last weekend ATTAC, the international movement initiated in 1997 by
Ignacio
Ramonet, Director of Le Monde Diplomatique, was formed at the
national level
in Barcelona. Its first Territorial Conference or
Constituent Congress is
the fruit of an agreement that brings together
a variety of Spain's civic
associations with the aim of promoting the
objectives of the international
ATTAC movement.... The national
Coordinating Bureau will have a secretariat
or administration and
correspondence office. ATTAC Andalusia is responsible
for this and will set up ATTAC Spain's headquarters in Malaga
with the
website: www.local.attac/org.andalucia.
ATTAC Spain will have
a Support Committee which will bring together
scientists, writers and well
known critical intellectuals.
--Translation: Amanda Galbe, volunteer
translator coorditrad@attac.org
------------------------------------------------------
--- 7 -- Bankers now alerted, but haven't done their homework.....
The Federal Bank of the European Union (FBE) called a special Press
Conference on 27 March 2001 in Brussels against the Tobin Tax. On the
day,
the FBE published a study by the economist George Martin, explaining
that
the Tobin Tax "is not the right answer to instability of markets"
for three
reasons: First, it cannot be implemented if not introduced
simultaneously
by all the countries in the world to avoid re-routing
financial activity;
Second, it would have disruptive and unjustified
effects on all economic actors
and not uniquely on speculators; and
thirdly it would be ineffective in not
fulfilling its initial objective,
namely, the fight against instability of
financial markets.
The FBE denounces this 'Loch Ness Monster',
fearing a return of the
issue on the European political agenda following troubles
on the currency
and international financial markets. The whole text of the
study is
available in the FBE Letter n5 which you can find on http://www.fbe.be
These arguments are not new and you can find the counter-arguments
in the text of the "Capital Tax, Fiscal Systems and Globalisation"
Intergroup
of the European Parliament, which can be found on:
http://tobintaxcall.free.fr
-----------------------------------------------------------------------
---
8 -- On the same topic....
Dear Colleagues,
In response to Steve Tibbett's question, "how should we respond to the
March
27th release of the European Banking Federation's attack on the Tobin
tax?",
I think the answer is "strongly and in great number"....
First off, though,
I think congratulations are in order, particularly to
our European colleagues.
I think that the fact that a federation
representing over 2,900 European banks
feel they must respond to our
movement reflects our effectiveness to date.
To quote the introduction,
"...the introduction of this kind of taxation has
become a major topic of
discussion for a large number of non-governmental
organizations, which have
been joined by several political groups. This is
a matter of direct concern
for the banking industry as one of the major players
on the foreign exchange
markets." Good work team. We are no longer the fly
on the back of the
elephant; we are now a threat.
The paper is easily refutable,
as they attack the Tobin tax along lines we
have long ago addressed. They
do not consider Rodney Schmidt's variant on
Tobin's original proposal, which
is now widely viewed as the only
technically feasible means to implement currency
transactions taxes. They
also shallowly attack Paul Bernd Spahn and offer
up as alternatives the
standard and largely ineffectual "new financial architecture"
recipe
including more capital account liberalisation, better macroeconomic
policies, transparency and accountability of the banking system, temporary
capital controls (Malaysia, Chile) and realistic exchange rate policy.
....I
think the bankers warrant our best efforts to let them
know that they'd better
get better arguments because we're not going away.
Regards,
Robin Round
Halifax Initiative
---------------------------------------------
---
9 -- The concept of a simultaneous policy....
Dear Ruthanne,
You may
remember we had some contact months ago regarding the
Simultaneous Policy
(SP) (which features Tobin-style taxes as part
of its proposed programme).
In case you have an opportunity to list
my forthcoming book on SP at the end
of one of your "Tobin Tax
Updates", I'd be very grateful. Copies can be obtained
directly from
ISPO (details at www.simpol.org).
Many thanks in advance. best wishes,
John Bunzl - Director
International
Simultaneous Policy Organisation (ISPO)
A few of the many book endorsements:
"I thought your proposal was an elegant idea of how change could occur. It
reflects the core ideas of how to create consensus around change. This is
the biggest challenge that we have" --Ed Mayo, Executive Director, New
Economics Foundation
"Your idea for a simultaneous policy is excellent. . Lets
hope that people
start to listen to this important message." --- Helena
Norberg-Hodge,
Co-founder of the International Forum on Globalisation,
and
Director of the International Society for Ecology & Culture
"It's ambitious
and provocative. Can it work? Certainly worth a serious
try." -- Noam
Chomsky
"Simultaneous Policy is a most promising strategy for discovering and
establishing a more equitable, efficient and sustainable economic order."
Shann Turnbull, Author of 'Democratizing the Wealth of Nations'
---------------------------------------------------------
--- 10 -- Now available from Zed Books...
Global Finance -
New Thinking on Regulating Speculative
Capital Markets, Edited by Walden
Bello, Nicola Bullard &
Kamal Malhotra, 256 pp
Controlling capital
has become the central issue of the new globalized
world economy. Ever since
the Asian crisis of 1997 threatened a chain-
reaction of economic destabilisation,
governments, the IMF, the G7 and
even George Soros have concluded that something
needs to be done.
This book examines their different ideas and approaches
to the issues:
- how do we go about renewing the process of governance of
the global
economy?
- can the IMF be reformed? Is there a case for capital
controls?
- do we need a new World Financial Authority?
The contributors
set their suggestions in the context of understanding
the past two decades
of neo-liberalism. They propose a fundamental
recasting of economic institutions
and strategies on democratically
controlled, environmentally compatible, alternative
lines. As the
political
momentum mounts for serious institutional global
reform, their ideas will
increasingly be on the policy agenda.
Walden Bello and Nicola Bullard are co-director and deputy director of
Focus
on the Global South in Thailand. Kamal Malhotra is a senior
advisor to the
United Nations Development Program. The contributors
are economists,
intellectuals and NGO leaders from both North and
South, and include Susan
George, Suzanne de Brunhoff and Martin
Khor.
--------------------------------
--- 11 -- Good sites to visit....at the Global Policy Forum!
European
Parliament Supports Move to Tax Aircraft Fuel (December 13,
2000) -- Both
the European Commission and the European Parliament have
now said that aviation
fuel should be taxed. Now, says the EP, it's up to the
Commission to
push for the lifting of aviation fuel's exemption from taxes.
(European Report)
http://www.globalpolicy.org/socecon/glotax/aviation/001213ep.htm
'Radical' Irish Plan to Reduce Greenhouse Gas (November 2, 2000)
The Irish
government sets out a strategy to "decouple economic growth
from the growth
in greenhouse gas emissions" including the phasing-in of
carbon taxes. (Irish
Times)
http://www.globalpolicy.org/socecon/glotax/carbon/001102.htm
Regulating International Financial Markets (December 14, 2000)
Christophe
Aguiton argues that the Tobin tax must serve to change the
international balance
of power and improve the material situation of the
poorest nations. (ATTAC)
http://www.globalpolicy.org/socecon/glotax/currtax/agui1214.htm
---------------------------------------------------------
---------------------------------------------------------
The Tobin Taxes Update is a monthly newsletter of the Tobin
Tax Initiative
USA. Tobin Taxes are domestic taxes on
cross-border currency transactions,
for the purpose of
reining in market volume and volatility; restoring national
sovereignty over monetary policy; and raising substantial
revenue for
urgent global environmental and human needs.
-------------------------------
Ruthanne Cecil,J.D., Program Director and Newsletter Editor
Tobin Tax
Initiative USA ... A project of
Financing for Sustainable Development, at
CEED, the
Center for Environmental Economic Development,
P.O. Box 4167,
Arcata, CA 95518-4167 USA
TEL (707) 822-8347 FAX (707) 822-4457
websites at www.ceedweb.org
email
<cecilr@humboldt1.com>
Inspiring new approaches to meet
urgent global
needs.....
------------------------------------------------------
------------------------------------------------------
-------------------------------------------------
Ruthanne Cecil, J.D.
-------------------------------------------------
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