FT.com / Comment / Opinion - A tax on finance to help the world’s poor
[T]to fund development, we have to think about introducing a voluntary contribution based on international financial transactions.
The time has come for France, alongside the 58 Leading Group countries, to discuss the feasibility of a voluntary contribution at a low, non-distorting rate of 0.005 per cent.
Let the financiers be reassured, this tax is painless: for a €1,000 transaction, 5 euro-cents would be diverted for the common good! Such a contribution can be conceived only if, under UN auspices, the international community deems it timely. Europe could pave the way for the discussion and decisions to come.
Such a tax would raise €30bn. This would finance new initiatives, particularly to help Africa. Its disbursement would have to be properly controlled and audited, in collaboration with the recipients. I have no doubt that the UN will one day adopt this system.
I agree.
Let's do it.
But not voluntarily: compulsorily.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
How exactly would £30 billion help anyone? Crossrail is likely to cost more, by the time it is finished. But suppose it was spent on some infrastructure. Result: land values go up, rents go up, landowners get richer, the poor stay poor.
All bad taxes start off small and have a habit of growing.
30 bn will end up in jersey in a couple of days.
🙄 Yes, probably the same £30 billion that was collected in tax and supposedly spent on development will end up there too. Development creates rental value and if a handful of people are creaming it off, the situation for “the poor” – actually, the landless – remains exactly the same.
And if you do a simple land distribution as in El Salvador after the civil war, the improvement benefits just a handful of peasants and does nothing for the urban poor who are the majority. Land distribution can also make things worse if as in Zimbabwe the land ends up in the hands of people who do not farm it as efficiently as the previous owners.
It is also worth following through what happens during the decades immediately following a land distribution, because, often the land ends up in the hands of the banks as peasant farming can be precarious.
Development is more than spending money on projects.