A European Tobin Tax: Charity For Whom?

(September 28, 2011) – The so-called Tobin tax proposed today by the EU Commissioner Mr. Barroso may be seen by some as an attempt at infusing an element of “mixed economy” and even humanity into the heartless world of finance. “Such a measure, already supported by the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, is long overdue,” writes Philippe Douste-Blazy, a former French foreign secretary, in The New York Times. Mr. Douste-Blazy reminds us:

“Last year 4 million people in low- and middle-income countries had been forced into extreme poverty — living on less than $1.25 a day — as a result of the food, fuel and financial crises … A new architecture of development assistance should provide stable, reliable and robust revenue streams that can weather global economic storms and changing political landscapes.”

He also refers the commendable work done by the organisation that he himself is heading:

“In 2006, Unitaid, an international agency based at the World Health Organization in Geneva, introduced the world’s first innovative tax for development — a small levy on airline tickets, usually about $2, that in its first five years has raised around $2 billion to help save lives by providing treatment for H.I.V./AIDS, malaria and tuberculosis … There is an urgent need to expand such solutions. It is fair, given its role in precipitating the economic crisis, to look to the largest and most profitable industry in the world — the financial sector — to play its part.”

The present call for a Tobin tax in Europe can not be likened to a scheme where airline passengers pay extra to fund a charity. This tax proposal is a desperate attempt to get some of the enormous concentration of wealth at the top of the capitalist food-chain redistributed — not to ordinary people who may need it the most but to the banks and other parts of the exploitive financial machinery itself.

Whatever the case, neither can people live properly on charity nor will the exploitative system change to the better as a consequence of being forced to do away with a tiny bit (the proposed tax would levy just 0.05 percent on each stock, bond, derivative or currency transaction) of its ill-begotten wealth. The cunning people on Wall Street will only find out new inventive ways to make up for their “loss” many times over.

PROUT points out that concentration of wealth is at the heart of the capitalist system. Robin Hood-style taxation will not result in a redirection of capitalism towards a wider distribution of wealth. No amount of taxation of financial trade will contribute to public welfare in real terms as long as the economic system itself only continues to increase its exploitation of the social body.

PROUT states that the collapse of the exploitative world of finance will happen as a natural course of events. It is the logical outcome of capitalism’s fundamental contradiction: Infinite desire for finite wealth. The job at hand is neither to reform the exploitative system nor to tear it down (as it will fall by itself). Our duty is to manifest a new, radically different, sustainable, and moral alternative.

Copyright PROUT Globe 2011

One thought on “A European Tobin Tax: Charity For Whom?”

  1. A couple issues. Can you so definitively say that this is Prout’s position in this unsigned article? Can you find a position on the Tobin transaction tax in Sarkarian writings? If not you are stating your own opinion and interpreting PROUT. This topic would also benefit from debate among activists and scholars influenced by PROUT. Certainly we support systemic change. Are you saying we have no solutions to offer other than some eventual collapse, with all the human suffering that will result? We have no interim program other than sudden change of the whole system? Sarkar offered many suggestions to make current systems operate more justly.
    The Tobin tax is not a bad idea although it is certainly represent not the end of all reform. It may help restrain excessive economic resources moving to the financial sectors of the world, and also restrain financial market volatility that spills over into the Peoples economy.

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