(CNSNews.com) – A group of 60 nations will meet next week at the United Nations to push for a tax on foreign currency transactions as a way to generate revenue to meet global poverty-reduction goals, including “climate change” mitigation.
Spearheaded by European Union countries, the so-called “innovative financing” proposal envisages a tax of 0.005 percent (five cents per $1,000), which experts estimate could produce more than $30 billion a year worldwide for priority causes.
World leaders are scheduled to hold a Sept. 21-23 summit at U.N. headquarters to review progress on the Millennium Development Goals (MDGs), eight specific targets to cut poverty and disease by 2015, in line with a pledge taken by U.N. member states in 2000.
The Leading Group on Innovative Financing for Development, comprising 60 countries – the
“With the [MDG] deadline now five years away, we must be both clear and realistic as regards the mixed results of the progress achieved and the scale of the challenges to be met by 2015 and strongly optimistic in the international community’s ability to work together to achieve the MDGs,” the Leading Group on Innovative Financing for Development (LGFD) said in a statement.
The summit “is a great opportunity to develop the current and potential role of innovative financing for development in the achievement of the MDGs and make the entire international community aware of the Leading Group’s recommendations.”
Those recommendations were released over the summer by a committee of experts appointed by LGFD members to look into options for generating money for development.
In a report the experts said the proposed levy on foreign currency transactions would be paid into a dedicated Global Solidarity Fund, to be used to help meet the MDGs and for “climate change mitigation and adaptation” – that is, enabling “poorer countries to switch to a low-carbon development path.”
The LGFD says existing forms of “innovative financing” have raised almost $3 billion in extra revenue for humanitarian causes over the past four years.
One example is a tax levied on airline tickets by a handful of countries in support of UNITAID, an initiative launched in 2006 to reduce the price of drugs for priority diseases such as HIV/Aids and malaria.
The idea of a foreign currency transaction tax was raised in the 1970s by
As such it is sometimes known as the “Tobin tax.” (Tobin won the Nobel prize in economics in 1981, for unrelated work.)
Development NGOs have been promoting the idea of a Tobin tax – or as some have dubbed it, a “Robin Hood tax” – for years, with anti-globalization groups, aid agencies, religious organizations and environmental advocacy groups in
Former British Prime Minister Gordon Brown suggested a type of Tobin tax at a G20 finance ministers’ summit in
“That’s not something that we’re prepared to support,” U.S. Treasury Secretary Timothy Geithner told reporters in
Many E.U. countries support the idea, however, and
French Foreign Minister Bernard Kouchner said early this month that even without
“The Americans are extremely important in this, but we are not alone,” Reuters quoted him as saying after an LGFD meeting in
“For every 1,000 euros the tax we are suggesting will bring five cents,” Kouchner said. “It’s not a lot, but enough to get things going.”
Proponents stress the small size of the proposed 0.005 percent tax.
In a joint op-ed published in early September, Kouchner and Japanese and Belgian colleagues promoted the tax idea under the headline “Small global taxes would make a big difference for world’s ‘bottom billion.’” (
“When people suggest taxes, they always start out ‘small,’” commented Ira Stoll, editor of FutureCapitalism.com and former managing editor of The New York Sun.
“But once the door is opened to the idea of ‘global taxes,’ you can bet they won’t end small. Never mind all the issues about whether development aid actually helps poor countries or just winds up empowering corrupt local dictators and their cronies.”
Last July U.S. Rep. Pete Stark (D-Calif.) introduced legislation calling for a 0.005 percent tax on currency transactions, which would used for child care assistance in the U.S., HIV/Aids and other health causes abroad, and global “climate change adaptation and mitigation.”The Investing in our Future Act (H.R. 5783), which has six co-sponsors, all Democrats, was referred to the House committees on Ways and Means and Foreign Affairs.