In a statement issued in Geneva – home to the U.N.’s human rights apparatus – the five called the financial transaction tax (FTT) a way “to offset the costs of the enduring economic, financial, fuel, climate and food crises, and to protect basic human rights.”
It would provide “a pragmatic tool for providing the means for governments to protect and fulfill the human rights of their people,” they said.
“The FTT is an opportunity for governments to move beyond rhetoric in their commitments to sustainable development, and to give flesh to their noble pronouncements of solidarity,” said one of the five, Virginia Dandan, whose title is “independent expert on human rights and international solidarity.”
The decades-old idea of levying a small charge on financial transactions – dubbed a “Robin Hood tax” since it supposedly taxes rich nations to benefit poor ones – has animated a wide range of advocacy groups, who see it as a way to help tackle everything from poverty to the cost of HIV/Aids care, to the emission of gases blamed for climate change.
High-profile proponents include Microsoft founder and philanthropist Bill Gates, Archbishop of Canterbury Rowan Williams – and German Chancellor Angela Merkel and France’s new socialist president, Francois Hollande, both of whom will be at the G8 event and the subsequent NATO summit in Chicago. (British Prime Minister David Cameron is skeptical.)
The U.N. human rights figures urged E.U. leaders to take the lead in pushing the proposal at the G8.
The European Union’s Executive Commission has proposed the introduction of an FTT in the 27-member union with effect from January 1, 2014. At a rate of 0.1 percent for the exchange of shares and bonds and 0.01 percent for derivative contracts, it estimates the mechanism could raise 57 billion euros ($73 billion) a year.
The U.N. figures welcomed the proposals, and said “E.U. countries must take bold leadership now to pave the way towards what should eventually be a global FTT.”
Cephas Lumina, whose title is “independent expert on foreign debt and human rights,” conceded that a FTT would not be “a silver bullet.”
“But it would help relieve sovereign debt load stemming from the financial crisis, shift the burden from ordinary citizens to the private sector which caused the crisis, and significantly enlarge government fiscal space for spending on desperately needed economic and social rights programs,” he said.
The FTT concept was first raised in the 1970s by U.S. economist and Nobel laureate James Tobin, who saw it not primarily as a revenue-raising mechanism but as a way to curb excessive speculation.
Former British Prime Minister Gordon Brown suggested a type of “Tobin tax” at a G20 finance ministers’ summit in Scotland in 2009, to fund future financial bailouts. The U.S. and Canada rejected the idea, which Treasury Secretary Timothy Geithner said at the time had achieved “mixed” results in countries where such initiatives had been tried.
Critics say an FTT would push up interest rates, dampen investment and hamper rather than stimulate growth.
In the U.S. House of Representatives, Rep. Pete Stark (D-Calif.) last year introduced legislation calling for a 0.005 percent tax on currency transactions, which would used for child care assistance in the U.S., global health programs directed at fighting HIV/Aids, tuberculosis and other health needs in developing countries, global “climate change adaptation and mitigation,” and U.S. deficit reduction.
The Investing in our Future Act (H.R. 5755), was referred to the Foreign Affairs and Ways and Means committees.