Financial Transaction Tax

The gap between the rich and the poor increased under Tony Blair and it must be increasing even more under David Cameron. The Conservatives want to scrap the 50% income tax rate, whilst more and more companies benefit from tax havens. The banking sector has the largest number of tax haven companies, with the big four UK banks – HSBC, Royal Bank of Scotland, Barclays and Lloyds – having a total of 1,649 offshore subsidiaries. Even Leeds United was benefiting from its owner being listed in a tax haven!

And of course the banks benefited very much from the printing of extra money with Quantitative Easing (QE), as can be seen by their recent profits. Back in 2010 Gordon Brown was saying that there should be a bank levy, but instead the banks prosper. Perhaps the answer is the Robin Hood Tax – a tiny tax on the financial sector can generate £20 billion every year. Just three of the main businesspeople behind the Robin Hood tax – FSA Chairman Lord Turner, financier George Soros, entrepreneur extraordinaire Warren Buffet.

An existing example of a Financial Transaction Tax (FTT) is the Uks current Stamp Duty Reserve Tax. This tax on share purchases was introduced in the UK in 1963. The initial rate of the UK Stamp Duty was 2%, subsequently fluctuating between 1% and 2%, until a process of its gradual reduction started in 1984, when the rate was halved, first from 2% to 1%, and then once again in 1986 from 1% to the current level of 0.5%. Just raising this tax by 0.5% would raise over £6 billion.

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