Tobin Tax

The Active Role of Nongovernmental Organizations, Trade Unions, and Political Parties

The alter-globalist movement has popularized Tobin's proposal at each world or regional social forum but also through national campaigns to mobilize public opinions. It was successful in building vast coalitions bringing together radical nongovernmental organizations (NGOs) contesting neoliberal politics, development aid NGOs, environmental NGOs, churches, trade unions, and member of parliaments of various political parties. In Europe, the Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC) played a special role. It was founded in Paris in 1998 after the monthly French newspaper Le Monde Diplomatique published an editorial calling for the creation of the Tobin tax to curb speculation, which had devastated East Asia, Latin America, and Russia. The revenues would be used to finance development and environmental policies in the poorest countries. Various ATTAC were founded in 40 countries, most of them in Europe. Together with other NGOs, they were successful in getting a law in favor of the Tobin tax adopted by the French Parliament in 2001 and by the Belgian Parliament in 2004. These laws said that the Tobin tax would be implemented in these countries when all other EU member countries would do the same. So, a lot of pressure was exercised on the European Parliament and European Commission in favor of the Tobin tax. One of the strength of the NGOs' network was its capacity to use the work done by academics in favor of the Tobin tax to respond to criticisms of its opponents in these various institutions. However, despite these many efforts, lobbying, and public demonstrations, they were not able to make a major breakthrough because of the refusal of European government and the fierce opposition of the finance industry. A change of attitude appeared in 2004 when France, Brazil, Chile, and Spain decided to establish a technical group on innovative financing mechanisms under the auspices of the UN Secretariat. They were joined in 2006 by 44 countries (now 55) to form the “leading group on innovative financing for development.” These countries are looking for new ways to finance the Millennium Development Goals (MDGs). Some of them have introduced an “air-ticket solidarity levy” in 2006 to finance UNITAID, a central purchasing facility whose purpose is to counter the major pandemic diseases. In 4 years, US$3 billion were collected. On September 21, 2010, during the United Nations MDG Summit, Japan, Belgium, and France, supported by Norway, Spain, and Brazil, presented a declaration to place a very small levy (0.0005%) on financial transactions for development. It seemed that the NGOs supporting the Tobin tax were close to getting their demands satisfied. A closer look reveals that things are in fact more complicated. It is a levy and not a tax, which means that one of the primary goals—curbing speculation—is abandoned. It may be reactivated with the new financial crisis that began in 2008.

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