Document Actions
CTTUpdateDecember2004
The Come-Back of the CTT
During 2004 the idea of a global taxation has made a come-back. The present trend towards global taxation is documented by the Landau Report (Paris, August) and the Lula-Chirac initiative on new financial mechanisms to combat hunger and poverty (the New York Summit 20 September).The currency transactions tax (CTT) is one of the most frequently mentioned examples of feasible global or international taxes. Thus the feasibility of the CTT was recently acknowledged by, for instance, the president of Finland Ms Tarja Halonen and by foreign minister Erkki Tuomioja.
* * *
The volume of speculative currency transactions has reached higher levels than ever before. According to a recent survey from the Bank for International Settlements, global forex transactions amounted to 1880 billion USD per day in April 2004. (This signifies a 57 percent increase since 2001). By consequence, even a minimal tax on the money trade would bring in sums, which are comparable to or which exceed that the present total volume of overseas development aid.
No wonder if the implementation of a CTT is nowadays often recommended by political leaders and researchers as a solution to the problem of financing the UN Millennium Development Goals. Estimates of the the expected revenue vary, but one current trend among researchers is to recommend very low tax rates (1 or 2 basis points). Thus, in a recent report by A.B. Atkinson from WIDER, the annual revenue is estimated to around 15 billion USD. And Sony Kapoor, in his new report on the subject (from December 2004) concludes that CTTs could raise 20 billion dollars each year to help fund the MDGs.
However, James Tobin's original idea to dampen speculation and the risk for financial crises has not been forgotten, either. The Belgian "Tobin-Spahn law" of 1 July 2004, in particular, has contributed to re-activating the debate on the many-sided potential of the CTT. There is now a growing European campaign, based on Attac (which is now present in most European countries, including the new EU member countries), the Tobin Tax Network in the UK, WEED in Germany, and several other organisations, and supported by many members of the European and national parlaments. Signals of a rising CTT campaign are now also coming from Japan.
* * *
At the European Social Forum in London in October, it was agreed to set up a secretariat and a website for the European CTT campaign. This was followed up by a meeting in Brussels 2 december. The meeting showed, however, that the participating organisations - The Tobin Tax Network, Attac France, WEED, Attac Italy, Attac Sweden, NIGD etc. - have rather different views on the purposes of the CTT and the ways to implement it. My understanding is that the British campaigners of the Tobin Tax Network concentrate on achieving a CTT on pound transactions (this would be implemented unilaterally by the UK government), while Attac France takes the view that several different international taxes are now on the agenda; the CTT is only one of them (i.e. of the taxes which are analysed in the important Landau report which was commissioned by president Chirac at the beginning of 2004).
One can also distinguish between 1) a "European campaign", which focuses on making the euro a tobin-tax currency, and which, therefore, is bent on tenacious lobbying of the MEPs, the EU Commissioners and the European Central Bank. 2) a "global campaign", which aims at building the political coalition of the willing governments and organisations, to call an international CTT conference and adopt an international CTT Treaty. The "Draft Treaty" by Heikki Patomäki and Lieven Denys clearly goes in the direction of the "global campaign".
The present writer is conviced of the necessity of both a "European campaign" and a "global campaign" for the CTT. These campaigns cannot but mutually support each others, if they set a universal tax system and a redistribution of resources to the benefit of the global South as their ultimate goals. In this spirit, I have set out to build a website specifically for the CTT-campaigns, but not just for one of them. The website, still in its provisional stage, is found at www.uttn.info. *
* * *
NIGD, together with Unafisco Brazil, Attac France, Attac Italy, WEED, Attac Japan and other organisations, is organising a series of agglutinated CTT events on the theme "Sociedades o mercados" (Societies or the Markets) during the 5th World Social Forum in Porto Alegre at the end of January 2005. The preparations of these events can be followed on NIGD's website through the bulletins by Antonio Martins from Unafisco Brazil (in English translation by Ruby van der Wekken):
* * *
Although the campaigns have right now gathered better momentum than ever, let's not forget the adversaries of the CTT. At the New York Summit on hunger and poverty, convened by president Lula at the UN in September, US Agricultural secretary Ann Veneman coolly noted that international taxes cannot be implemented, and that they are inherently undemocratic. Maybe she was thinking of the old slogan "No Taxation Without Representation". The point is that we, the campaigners for the CTT and other global taxes, tend to agree very much with that idea. Representation, yes, and acceptance of the fact that absolute national soverignty is outdated in the age of the internet.
Deeply concerned by the adoption of the Belgian "Tobin-Spahn Law" in the Belgian parlament, EU Commissioner Frits Bolkestein has recently expressed his negative view on the CTT in a letter to the Belgian finance minister Didier Reynders. Bolkestein writes, for instance, that "such a tax may constitute a restriction to free movement of capital and payments, in the meaning of article 56 and following of the EC Treaty". Let's note, however, that this sentence is conditional, not categorical. Last July, the European Central Bank is reported to have issued a statement containing arguments against the introduction of CTT.
Some observers fear that the GATS (general agreement on trade in services) could become an obstacle to the implementation of the CTT. Thus Myriam van der Stichele warns against the possibility that a member country of the WTO, which has committed its financial sector under GATS, could be accused by another member country of breaching GATS Article XI, if it introduced a CTT.
14 December 2004
Mikael Böök
Footnote:
The u stands for the universalism of the Nordic or European welfare state, and for the African universalism, which is summarized in the concept of Ubuntu. ("Ubuntu" is an ancient African word, meaning "humanity to others". Ubuntu also means "I am what I am because of who we all are".) It also may create associations to U Thant and Desmond Tutu, who said: "... there must be something fundamentally wrong somewhere if by just speculating, millions are made. No work has been done. There has not been any exchange of good. It's just money that seems to come out of the air, the ether, and equally quickly these banks suddenly collapse where people made millions of paper money on the stock exchange without a corresponding increase in anything that is measurable."
Whatever U may think of this U, it is really nothing new and original, or personal. However, it springs from a conviction that the CTT is not just a technical innovation, nor merely a question of generating more millions for overseas development aid (sucha s we have seen in the past), but a question of justice and welfare for all, i.e. universally.
