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With the "Robin Hood Tax," a Grassroots Movement Seeks to Bring Wall Street to Heel
http://www.truth-out.org/news/item/33553-with-the-robin-hood-tax-a-grassroots-movement-seeks-to-bring-wall-street-to-heel
Friday, 06 November 2015 By Martin Xavi Macias,
Truthout | Report
[…]
The Movement for a "Robin
Hood Tax" Heats Up in Chicago
Advocates of the "Robin
Hood Tax" shut down Chicago's financial sector on Monday, demanding a
financial transaction levy they say could generate an estimated $10 - $12
billion in annual revenue for a state currently facing a $5 billion deficit. Forty-one people were arrested after they blocked
the entrances to the Chicago Board of Trade building, chanting, "What is
America going to be? Corporate greed or democracy?"
Illinois is entering its fifth
month without a budget. Gov. Bruce Rauner is refusing to sign any budget passed
by Democrats, who hold a super majority, until his pro-business, anti-union
"structural reforms" are included. Democrats have called his reforms
"non-budget items."
Rauner's cuts include: $17.6 million for reduced
fares for senior citizens and students on public transit; $26 million in social
services and public health grants, and funding to pay for the funerals and
burials of public-assistance recipients, smoking cessation, teen programs,
autism, and HIV and AIDS programs.
Solo LittleJohn, who earns
minimum wage as a cook at a Kentucky Fried Chicken restaurant outside Chicago,
called Gov. Rauner "racist" for refusing to pass a state budget which has resulted in cuts
that impact "working people (of color) the hardest."
"These are cuts and taxes
we can't afford as working people. They keep taking more from us,"
LittleJohn said. "It's like trying to bleed a rock dry."
The fight for shifting
priorities in Illinois is part of a larger struggle - a push for a different
way of approaching state revenue that centers the needs of vulnerable people.
Fair Economy Illinois, the group that organized Monday's action, is calling for
a Financial Transaction Tax (FTT), also known as the Robin Hood tax. They are
demanding lawmakers explore progressive revenue options like FTT before making
cuts to social services like mental health and child care.
A FTT is a small levy on the
trading (buying and selling) of financial assets such as stocks, bonds,
currencies and derivatives.
The idea is not a brand-new
one: The US used to tax financial transactions between 1914 and 1966.
"The tax would generate
vital resources that we need in our communities," said Toby Chow of Fair
Economy Illinois. "We could rehire laid-off teachers, fix crumbling
streets and public transit, and providing quality infrastructure, health care
and social services," Chow said.
According to the Chicago
Political Economy Group, which has pushed for a FTT for years, the tax on a
$92,500 contract would be $4 ($2 to buy and $2 to sell), or about 0.004
percent, which would be paid by traders.
If passed, the FTT would still
be much lower than the common sales take, which is something everyone pays,
regardless of your economic status. In Illinois, the state sales tax is 6.25
percent. Chicago's sales rate will rise to 10.25 percent on January 1, making it the highest
in the nation.
Illinois has two of the
largest financial markets in the world, the Chicago Mercantile Exchange (CME)
Group and the Chicago Board Options Exchange (CBOE). Each year the value of
products traded on these two exchanges totals more than $900 trillion.
In an email, a CME Group
spokesperson told Truthout, "Transaction taxes on futures and options
would be bad for business, resulting in job losses here and declines in state
and local tax revenues."
Meanwhile, Kristi Sandford,
communications director for IIRON,
said the state and city are both "taxing working people to death" and
that revenue must come from "those who can pay."
In the past, CME Group has
threatened to leave the state if a tax was imposed - but for now, its
relationship with Springfield remains tight: "After getting their $77 million annual tax break from Springfield, CME has no
incentive to leave," said Sanford.
Mayor Rahm Emanuel, a former
CME board member, has rejected the proposed LaSalle Street Tax (as the FTT has
been dubbed in Chicago).
Gov. Bruce Rauner (R-IL), a
longtime equity investor who made more than $57 million in personal gains in 2014, offered no direct
comment on the proposal.
Importantly, the Chicago City
Council can't authorize the tax; it would have to be done in Springfield, the
state's capitol. Illinois House and Senate bills to establish a financial
transaction tax were introduced earlier this year, but neither has yet made it
out of committee.
Rep. Barbara Flynn Currie
(D-25th District), who chairs the Illinois House Rules Committee, told Truthout
she is in support of the bill, but getting it to pass is up to her colleagues,
not her.
"I think it makes
financial sense," Currie said. "There's no reason why we shouldn't
follow cities that have imposed a similar tax, like London."
Another Economy Is Possible
Enthusiasm for a financial
transaction tax extends far beyond Illinois. The national Robin Hood Tax campaign
was started in 2011 by National Nurses United, National People's Action, Health
GAP, ACT UP and others who "saw the need to produce revenues from taxing
the finance sector, in order to meet human needs," according to Ken Zinn,
political director for National Nurses United.
The groups adopted the name
"Robin Hood Tax" from the existing international
FTT movement. (When the US campaign used the term "Financial
Transaction Tax" people mistakenly thought it meant a tax on ATM
transactions.)
In the past four years, more
than 200 grassroots organizations have signed on in support. They include
groups who work on issues like student debt, home foreclosures, infrastructure,
health care and more. The tax has also garnered support from some of the country's
wealthiest individuals, such as Bill Gates, Mark Cuban, George Soros and Warren
Buffet.
"It's gotten
organizations out of their silos, working together towards a common goal,"
said Zinn.
He says the widespread support
stems from the fact that many organizations see the tax as a source of revenue
to support funding for their own demands, from health care to child care to
helping people avoid home foreclosure.
"We are always told by
government, at the local and national level, that there is no money," Zinn
said. "We are able to show there is money. It's sitting on Wall St. With
this tiny tax, we can produce over $350 billion in the US alone."
The top 1 percent of the US
population earned a record one-fifth of the country's income in 2014, and the
400 richest Americans have more money to spend than the bottom 50 percent.
Advocacy for a Robin Hood tax
has played a central role in the fight for economic justice in recent years. In
2011, National Nurses United members organized a mass demonstration at the US
Chamber of Commerce. They followed that with an action outside the New York
Stock Exchange. More than 1,500 nurses marched through Wall Street, protesting
corporate greed and income inequality. Three months later, the Occupy Wall
Street movement kicked off.
On the two-year anniversary of
Occupy Wall Street's takeover of Zuccotti Park, unions and activist groups
again marched through the city, demanding the Robin Hood Tax. They chanted,
"Want to end this deficit? End the war, tax the rich."
Protesters wore Robin Hood
costumes. Some wore tights, and many wore the signature green cap.
Reginald Brown, a member of
Vocal-NY, one of several HIV/AIDS activist groups endorsing the Robin Hood tax,
told Labor Notes, "We could end AIDS in our lifetime.
Instead, Wall Street executives got bonuses after their bailout."
Prosperity and Equity for All?
In the realm of legislative
politics, The Robin Hood Tax campaign has put its support behind the Inclusive
Prosperity Act (SB 1371), a bill introduced by Sen. Bernie Sanders (I-VT)
in May of 2015. The House version of the bill (HR
1579) was introduced by Rep. Keith Ellison (D-MN) in 2013, but died in
Congress.
The "Robin Hood Tax"
bill (as Sanders' bill is called by advocates) is a tiny levy of less than half
of 1 percent on financial sector transactions. If the bill were signed into
law, the rate that banks would be taxed at would still be a far lower
percentage than the common sales taxes Americans pay on everyday goods. Still,
revenue would be considerable: It is estimated that the tax could generate as
much as $350 billion each year in the US alone.
The text
of the bill concludes, "The global financial crisis cost Americans $19
trillion in lost wealth." It says the proposed tax "could help create
sufficient jobs in both the public and private sectors to replace the 8 million
jobs lost in the Recession."
The Inclusive Prosperity Act
is the chief funding mechanism for Sen. Sanders' proposed College For All Act, which, if signed into law, would
eliminate tuition at public colleges and universities.
Zinn said the Robin Hood Tax
movement has received a huge boost by Sanders speaking about wealth inequality
on the campaign trail. National Nurses United officially endorsed Sanders'
presidential campaign this year.
Still, a lack of political
will, coupled with the influence of substantial political donations from the
finance sector, pose significant challenges to activists.
"Wall Street calls the
shots," Zinn said. "It's up to us to build a mass movement of people
who demand that elected officials support the people's agenda, not Wall
Street's agenda."
The effort to pass the Robin
Hood Tax in the US is many years behind the international movement, which has
made significant progress. The global FTT movement has members in more than 25
countries representing more than 250 million people. The tax has been in place
for decades in more than 40 countries around the world including the UK, Brazil
and Japan.
FTT has been an important
element in the global fight for economic justice. The 2008 global economic
meltdown disproportionately affected people who did nothing to cause it.
Residents of the world's 56 poorest countries fell into deeper hardship when
their nations experienced a collective $70 billion shortfall. Now, advocates
say this tax will generate resources to end poverty and restore services cut by
austerity measures.
Zinn recounted an action in
2011, in which international FTT activists descended on the G20 Summit in
Cannes, France demanding support for the levy. The movement was so effective
that FTT became an item on the agenda put together by then G20 President
Sarkozy.
[…]
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