Robin Hood? No, thanks

Taxing speculative financial trades to fund social spending is an idea that has intuitive appeal to most people, except market participants.
 Kevin Costner in the 1991 film Robin Hood -- Prince of Thieves
Kevin Costner in the 1991 film Robin Hood -- Prince of Thieves

If Robin Hood were alive today, he might be pointing his longbow at FinanceAsia readers, who have rejected proposals to tax financial markets and give to the needy.

In last week's web poll, respondents voted two to one against a so-called Robin Hood tax -- a proposed 5bp levy on "speculative financial transactions" that would be used to help the world's poor and to fight climate change.

The campaign proposing the tax is organised by a coalition of non-profit groups and NGOs, who argue that the massive bailout of financial institutions around the world has diverted governments from spending money on healthcare, education and other important social initiatives, and will ultimately impose a far greater cost -- one that is measured in human lives rather than dollars or basis points.

In Asia alone, 21 million people could be added to the ranks of the extremely poor due to the global economic crisis, according to a joint report by the United Nations and the Asian Development Bank -- putting even greater pressure on social infrastructure at a time when spending in that area is under pressure from budget cuts.

A group of 350 prominent economists, including Nobel prize-winner Joseph Stiglitz, joined the campaign last month, signing a letter that asked the leaders of the G20 countries to impose the tax "as a matter of urgency".

"The financial crisis has shown us the dangers of unregulated finance, and the link between the financial sector and society has been broken. It is time to fix this link and for the financial sector to give something back to society," they wrote.

The letter's signatories are economists from 35 different countries, including China, India, Japan, the Philippines and Thailand. Proponents also claim the support of George Soros and Warren Buffett.

However, some market participants are rabidly opposed. Goldman Sachs has even been accused of trying to rig a poll on the campaign's website after thousands of votes flooded the site in a 20-minute period, many originating from a Goldman server in London.

Here at FinanceAsia, our servers were unmolested by Goldman or, indeed, by anyone. A rather meagre 90 votes were cast in total, with 62% opposed to the tax, 31% in favour and 7% undecided.

Photo provided by The Picture Desk.

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