The proposal to tax corporations a small amount for each international transaction has gained widespread approval, especially in Europe, where at least four of the 17 countries in the Eurozone are facing their most serious economic crisis.
A similar version of the financial transaction tax (FTT) has been introduced in Congress by Senator Tom Harkin (Dem-Iowa) and Representative Peter DeFazio (Dem-Or). They say that a $3 tax on $10,000 worth of transactions could raise as much as $350 billion in 10 years, an amount that could be a boon to U.S. states and cities that are struggling to meet huge budget deficits
The FTT has become a rallying point for labor unions, non-governmental organizations, Move On and independent groups, who see it as a relatively painless way to increase revenue without the paralyzing debates between Republicans and Democrats.
The National Nurses Union (NNU) has been among the leaders in actively promoting the transaction tax. It recently held demonstrations at the offices of 60 members of Congress in support of the measure.
"The thing about the financial transaction tax is it's stunning how quickly people get it and how fast they embrace it," says Rose Ann DeMoro, NNU executive director.
The leaders of the two strongest economies in Europe, Angela Merkel, German Chancellor, and Nicholas Sarkozy, president of France, are openly enthusiastic about the trade tax. Predictions are that the tax could raise $57 billion euros (U.S. $77 billion) a year in European countries alone.
American and British Opposition to Transaction Tax
The Robin Hood tax proposal has received warm and growing global approval, except in Great Britain and the United States, whose opposition remains a major stumbling block to its enactment. Critics say that investors will avoid trade with countries that impose the tax, and flee to countries that do not require it. Big-time U.S. investors as well as the banks and major corporations are opposed to the tax, with Republicans against it in principle as a tax-raising measure.
George Osborne, the British Chancellor of the Exchequer, described the proposed tax as "economic suicide" for Europe. In this time of economic crisis, he said, the European Union "should be coming forward with new ideas to promote growth, not undermine it." Glenn Hubbard, who was chairman of the Council of Economic Advisers under President George W. Bush, said the Robin Hood Tax is a "monstrously bad idea."
President Obama is reported to be "lukewarm" to the FTT tax, but would probably side with Wall Street while expressing his support for the revenue-raising goals of the tax. The AFL-CIO is in favor of the tax but has so far done little to promote it.