Day #166 - Tax Free

Posted by Alex | | Posted On Sunday, 14 February 2010 at 14:41

It's been a fair while without a blog, and instead of spouting about my irrational hatred of Valentine's Day, I've got another annoyance that I've got to vent about: The Robin Hood Tax.

[Before I start, I would like to point out that my mathematical skills are terrible, especially when numbers get into the billions...and since we're talking in billions there are some points at which 1x10^12 will sometimes confuse. Eventually we reach 1x10^15 and that's where it gets very confusing. So, bear with me if my numbers don't quite add up...]

Now, on the surface, this tax to take money from the rich and give it to the needy is a brilliant bit of philanthropy; a marvellous piece of thinking; a really good idea from a really good egg. The basis of it is that the financial sector will be taxed up to (key phrase) 0.05% on every non-public transaction or piece of business they do - so basically stocks, dividends, currency, and all that malarky. Sounds good, no? Taxing the banks! Raising money! Up to (key phrase) $400billion per year. Wow!

Where will it be spent? It'll go both inwards and outwards. Its aim is to fund the ailing budgets of big countries, as well as to shore up the Aid and Green budgets worldwide. Brilliant, eh? We're not only saving the West, we're saving the World and keeping our hands in the "poverty pie". What more could we want from it. I mean, $400billion US is a bigggg figure - I couldn't even count to 400 billion without getting bored, or lost in the hundreds-of-millions.

The thing is though, we're not talking about Alan Sugar's back pocket, or Donald Trump's retirement fund. We're not talking winning the lottery, or paying off a mortgage. We're talking about changing the world. We're talking international scales. We're talking deficits, and in terms of those bad-boys, we're talking small potatoes with $400billion per year. I mean, America's deficit alone is $1.75trillion (give or take). It's going to take 50 years to pay it off, while hoping to God they don't keep spending...and ignoring all other countries...using this 'Robin Hood Tax' idea.

Why can't the banks be coerced into a little bit more? What's wrong with "up to 0.5%" which surely, by the logic of "up to 0.05%" would yield up to 10 times as much, so, up to $4000billion a year? Since the banking sector apparently makes $3000billion a day, it's really no big issue that they give up $4000billion a year, now is it? I mean, think of the things that could be spent on! Heck, a 1% tax would make a huge difference. Maybe up to $8000billion a year. The banks wouldn't lose their massive bonuses; the sector would still be profitable and strong, but the world would gain so much from it.

Split $8000billion between the roughly 200 countries in the UN (and I'm thereby assuming "in the world"), and you still get $40billion a year being sent to each country. Places in the 'third world' could shore up their economies off $40billion, free, every year, guaranteed.

Make it 5%, a reasonable figure for a tax, and you're looking at roughly $40trillion floating around the world every year. You can split that 200 ways again, and each country gets $200billion free, guaranteed, per year. You could say "Okay, so only the known UN states get it". That's still $208billion. So, you can add in Charities - Amnesty, Oxfam, Médicins sans Frontières; humanitarian organisations, educational programs in the third world; and give them all a share of the $8billion so that all countries get $200billion each.

It's not difficult. I know the banks don't want to give up their hard earned cash, and be taxed. But, if the banking industry is worth $3000billion a day they make roughly 1,095,000,000,000,000 per year. So what's $40trillion a year? That leaves them with a worldwide sum of 1,055,000,000,000,000. I'd be happy with that, across the entire banking sector. Obviously we can't do that, and I'm being far too ambitious, but just think of the huge amounts of cash that would be able to be sent to places to sort out deficits, economies, humanitarian crises; money that could be invested in new technologies, new sources of energy, better education, better public services. We'd be talking about advancement on a global scale, not just limited to the West vs the East.

While $400billion a year is a nice happy number, and it does make a slight difference to the balance of things in the world, it's not good enough. We're floating around on a ball, in space, with the ability to take the world forward; to expand, to learn, to grow, to reach beyond our current primitive levels. Within 50 years we'd have amassed $4quadrillion and sent it around the world, giving each country $20trillion and sharing out $800billion to charities over the course of a century!

Obviously, with this amount of money floating round you'd expect inflation, but, if the banks are making $1.095x10^15 every year, logic says we should be spiralling into inflation anyway. We're not adding to the pool. We're just taking from it, and spreading it to other areas. We're watering the lawn, if you like. You take a chunk, you spread it equally across 192 nations and multiple charities, and as Commie as this idea seems, eventually "Make Poverty History" will become a redundant phrase.

$200billion per year would shave 10% off America's deficit, annually. Within a decade, permitting that America didn't go nuts and spend, spend, spend, it'd be in the black. It'd probably go a long way to solving Zimbabwe's inflation problem and allow them to improve services without having to print more money.

Although, on the downside, the ideas of class and such would change. With that much money freely available to improve the country, certain unscrupulous people could feasibly charge more for their services to improve our services. There's a lot more to it, but, suffice it to say people have to be less human around it all.

I'm all for this Robin Hood Tax, but, I just think it's not pushing hard enough to get the world back on its feet...

[Please feel free to correct me if you feel I am at all wrong]