Tax against poverty

The concept of a tax against poverty has two goals:

the levying of a financial transaction tax that goes beyond the foreign exchange transaction tax proposed by James Tobin in 1972 and includes all speculative financial transactions (e.g. also on trading in stocks, raw materials, food and especially derivatives),

the use of the revenue from this tax to combat national and international poverty and to protect the climate and the environment.

A constantly growing national and international civil society movement has been committed to the introduction of such a tax since the end of 2009.

background

The concept of “Tax against Poverty” draws on the work of John Maynard Keynes , James Tobin, Paul-Bernd Spahn, Stephan Schulmeister (Austrian Institute for Economic Research) and the longstanding efforts of attac .

The tax on financial transactions covers the purchase and sale of financial products using a tax rate that should be between 0.1 and 0.01%. Since every purchase and sale is taxed, computer-controlled high-speed speculation ( algorithmic trading ) in particular is financially burdened, which converts many billions of US dollars every day at nanosecond speed . Small investors and investors in the real economy, on the other hand, who tend to keep assets and not trade with them all the time, are hardly burdened by this tax. The increase in the price of high-speed speculation is hoped to have a steering effect which is intended to reduce unnecessary or even harmful speculation and the volatility of the financial markets. Opposing views are of course also represented, especially by financial market players who, for example, B. fear a decrease in liquidity or the migration of institutions to areas of the world where this tax is not levied.

The discussion between supporters and opponents of the financial transaction tax, which has been intensified since the beginning of the campaign, increasingly shows that it is stuck in a dead end and that even new reports no longer provide any new knowledge for one side or the other. One disadvantage is that there is no precedent for this type of tax. Previous models only considered partial aspects of what is required here with a comprehensive taxation of all financial transactions, in addition, these previous models were partly successful (“ stamp duty ” in Great Britain) or unsuccessful (Sweden). Accordingly, there has not yet been a satisfactory “practical test” that could bring about the theoretical standstill between the two camps by providing evidence for one or the other side.

Supporters of a “tax against poverty” are not satisfied with the introduction of a “mere” financial transaction tax, but at the same time call for the funds to be used specifically for fighting poverty and protecting the environment. They justify this initially with the fact that the introduction of this tax would end an unjustified privilege of the financial sector. For decades, financial sector activities and products have been exempt from appropriate taxation. The fact that revenues from this tax would be used to combat international and national poverty and to protect the climate and the environment would require the financial sector not only to contribute to overcoming the global financial crisis, but also to finance the global common goods and other urgent global community tasks . In addition, the opinion is expressed that increased investment in poverty reduction, development and climate protection is an important answer to the central challenges of our time, e. B. national and international social conflicts, illegal migration or terror.

It is true that there can be no earmarking for “taxes” per se (unlike, for example, with levies), but that all tax revenues flow into the general state budget. On the other hand, it is held that the parliament is ultimately decisive for the use of tax revenue. An example of how income from this tax could flow into poverty reduction in this way is the Development Policy Consensus, a cross-faction appeal by members of the Bundestag that a total of 346 members (out of a total of 622) signed on May 15, 2011: They demand that Germany By 2015, the promise made 40 years ago in UN resolution 2626 should be kept to use 0.7% of gross national income for development policy. In order to achieve this, however, 1.2 billion euros more would have to flow into German development aid from 2012 onwards than is currently planned and possible. For this reason MEPs refer in their appeal to "innovative financial instruments", one of which is the financial transaction tax.

German campaign "Tax against Poverty"

The German campaign “Tax against Poverty” was initiated by the Jesuit Mission Nuremberg and began on October 17, 2009, the International Day for the Eradication of International Poverty, with an open letter to the newly elected federal government. The aim was to create a broader civil society basis for the idea originally associated with the work of attac . The letter was then signed by 32 organizations and 8 individuals. As of May 15, 2011 the campaign will be supported by 80 organizations and 14 people. These include church and trade union groups, development and environmental organizations, but also banks, bishops and scientists. The campaign will be coordinated on May 15, 2011 by a steering committee with representatives from attac, Bread for the World , the DGB , Oxfam , the German Environmental Foundation, WEED , Andre Presse ( Karlsruhe Institute of Technology ) and the campaign moderator Jörg Alt .

On November 6, 2009, a revised version of the open letter was submitted as an online petition to the German Bundestag. The petition was signed by 66,204 citizens online, by letter, fax and signature lists within 6 weeks, which initially secured the petitioners the right to a public hearing in the Petitions Committee.

Due to the success of the petition, political parties became aware of the campaign and their concerns and brought the topic to the Bundestag plenary via Current Hours, written and oral questions. Alliance 90 / Greens, the Left Party, ÖDP and SPD have since joined the campaign alliance as co-sponsors.

On May 21, 2010, the federal government officially committed to the financial transaction tax through Minister Schäuble. Before the Bundestag, he advocated the most comprehensive possible introduction of a financial transaction tax, either on a global level (G 20) or on a European level (EU) or the euro zone. Even if the originally targeted goal of being able to plan income from the financial transaction tax in the federal budget as early as 2012 was dropped on May 12, 2011, the federal government reaffirmed its fundamental determination to continue at least a Europe-wide introduction.

In connection with the work of the campaign, there have now been four expert hearings in the Bundestag, at which representatives of the campaign also appeared as speakers:

The hearing on May 17, 2010 in the Finance Committee dealt with practical and technical questions relating to the introduction of a financial transaction tax.
The hearing on December 15, 2010 in the Committee for Economic Cooperation and Development dealt with the question of “Financing for Development”.
The hearing on February 6, 2011 in the Petitions Committee was dedicated to the “Tax against Poverty” campaign petition as such.
The hearing on November 30, 2011 in the Finance Committee focused on issues of implementation in a European framework.

The use of the income from a financial transaction tax is still controversial: The Federal Government would like to allow it to flow into the budget, the ideas of the political parties in this regard are inconsistent.

Comparable approaches and campaigns

In the political field, reference can be made to French President Nicolas Sarkozy , who holds the G8 and G20 presidencies in 2011, the EU Parliament and the EU Commission : They (repeatedly) support the introduction of a global financial transaction tax to finance development , Poverty reduction and climate protection. Since the EU Commission presented a legislative initiative on a financial transaction tax in autumn 2011, negotiations have been going on in Europe about the specific introduction of this tax.

In the area of civil society, the German example was followed by similar initiatives in other countries, initially in Austria, but now also in France, Italy, Canada, Spain, the USA, etc. The best known is the “ Robin Hood Tax ”, which began on February 10, 2010 “Campaign in the UK. The British campaign also brought Robin Hood, a well-known, personable and vivid symbolic figure, to international civil society efforts. The idea drew circles: on June 22, 2011, the International Day of Action for a Financial Transaction Tax, groups and campaigns in 35 countries took part.