Ireland should introduce financial transaction tax, says civil group

Ireland should introduce a tax on certain financial transactions and use the money raised to target long term poverty, inequality and global warming, according to a coalition of civil society organisations which has launched what it calls the Robin Hood Tax Campaign.

The tax, know as a Financial Transaction Tax, or FTT, would be levied at rates varying between 0.1 per cent and 0.01 per cent on trading in shares, securities and derivatives, but not on government bonds or currency exchanging.

Crucially, the tax would be levied on intra-day trading and not just on a profit and loss reckoning at the end of the trading day.

Proponents of the FTT say the tax is partly about making banks and others pay for what they inflicted on society. They estimate that in Ireland, the tax would raise between €320 million and €360m annually.

They want the revenue to be used to target domestic poverty and to bolster overseas aid, especially on projects related to global warming.

The amount of money to be levied on individual transactions was so small, according to Dr Micheal Collins of the Nevin Economic Research Institute, that he predicted there would be no displacement of financial activity to jurisdictions that did not have the tax. He felt also that traders would absorb the cost in their profits rather than pass it on to customers.

“The gains would significantly exceed the losses, or negatives, associated with its introduction,” he told a seminar in Dublin on Tuesday.

Ten EU member states – France, Germany, Belgium, Spain, Italy, Austria, Portugal, Greece, Slovenia and Slovakia – have agreed in principle to introduce such an FTT and aim to finalise agreement by the middle of this year, applying the tax from 2017.

According to Anna Visser of Reclaiming Our Future, the umbrella group co-ordinating the campaign, an FTT is "common sense" and a justifiable response to what banks and financial institutions have inflicted on people.

An FTT would be a tax on “the most dangerous type of speculative trading” and was a “no brainer”, she maintained.

Some 40 groups to date have declared their support for a Robin Hood Tax. They include the Irish Congress of Trade Unions and several individual trade unions, Social Justice Ireland, the National Women’s Council, non-governmental organisations such as Trócaire, Christian Aid Ireland and Oxfam Ireland, and environmental organisations such as Friends of The Earth and the Debt and Development Coalition Ireland.

To date, the government has remained non-committal at European level to the idea of an FTT.

Political parties have been approached but so far, just two – the Green Party and People Before Profit – have given their support.

Sinn Féin is opposed to the tax because, according to Ms Visser, it is seen by them “as a European instrument”.

The Labour Party seemed in favour but had yet to commit and Fine Gael and Fianna Fáil had engaged in discussion about the tax but had yet to show their preference.

David Hillman of Stamp Out Poverty, a UK organisation campaigning for Britain to back an FTT, argued the tax would not affect ordinary people.

"Ordinary people are not trading derivatives, as opposed to finance firms that are trying to make a quick buck by doing it thousands and thousands of times a day," he argued. Further information from: robinhoodtax.ie and reclaimingourfuture.ie