Stamp out poverty

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The Guardian has reported that:

A cross party group of MPs has urged the government to introduce a small tax on foreign exchange dealings as a way of raising money to combat poverty worldwide.

The All Party Parliamentary Group for debt, aid and trade, supported by campaign group Stamp Out Poverty, say that a "sterling stamp duty" levied at just 0.005% of the value of transactions carried out by UK-based foreign exchange dealings could raise $2.4bn a year that could be ring-fenced for international development - enough to fund basic healthcare in Ethiopia, Uganda and Tanzania for an entire year.

The move is the latest in a long-running campaign to introduce a so-called "Tobin Tax" following a proposal by economist James Tobin three decades ago to tax currency transactions at 1% to combat currency speculation.

Group chair Labour's Ann McKechin said: "To be effective a sterling stamp duty would have to be easily and inexpensively implemented, capture the vast majority of sterling transactions around the world, and be set at a level that would not lead to avoidance or cause any adverse effect to UK trade or the City."

Over the last few years I've done a small amount of work with Stamp Out Poverty, and have become convinced of three things. The first is that this tax could work. Second it would be hard to avoid. Third it would have no harmful effect on liquidity.

There is a fourth as well: if designed properly this tax could reduce market volatility and help prevent the impact of harmful speculation. That would be a massive bonus.

I support the call to Stamp Out Poverty.