G20 Finance Ministers meeting in Washington must recognise the need for a tax on banks that raises hundreds of billions of dollars to help poor countries and meet the true cost of the economic crisis, says the Robin Hood Tax campaign.
Jeffrey Sachs, Professor of Economics at Columbia University and a supporter of The Robin Hood Tax campaign, said: “Even after wrecking the world economy and playing insider games with the markets, the banks continue to cash in on their cosy relations with governments and central banks.
“The mega-bonuses flow even as the US and European governments plead poverty when it comes to fulfilling their aid pledges. It's time to hit three targets at once: taxing financial transactions to stop the financial froth, to recoup the windfalls that taxpayers pay to the banks, and to fulfill the unmet aid promises to the world's poor.
“The IMF should not endorse a financial tax while neglecting the need to use the tax to fight poverty, especially since the financial crisis multiplied the injury incurred by impoverished countries reeling from aid shortfalls. The new tax – plus its use to fight poverty – should be a package deal.”
Research conducted by Oxfam highlights the dramatic impact that the recession has had on developing countries, with low-income nations facing a $65 billion black hole in their public finances in 2009 and 2010. This is forcing them to slash spending on crucial areas such as health, education and agriculture.
According to the IMF, G20 rich countries have experienced an average 40 per cent decrease in their overall GDP since the beginning of the crisis. In addition, governments have had to dramatically increase their national debt to bail out banks.
Recent announcements of massive bank profits and bonuses show the financial sector is now able to sustain a tax that would raise the hundreds of billions of pounds needed to reduce poverty and protect public services at home and abroad and tackle climate change.
The campaign is calling on the leaders of the UK's political parties during the election to back a Robin Hood Tax 'big enough' to solve these problems.
Of the three big parties, only the Liberal Democrats have included proposals for a transaction tax in their manifesto. Concerns have been raised however that their proposals might mean only moving ahead with other countries, rather than taking a lead.
The Green Party has given its full support to the ideas.