A Tax on Financial Transactions

The Globe and Mail has an online story reporting Ontario Finance Minister Dwight Duncan's adamant opposition to any consideration of a tax on financial transactions at the G20. Although the article doesn't provide details, most of what I have read about such a measure would involve the following: 0.1 per cent tax on transactions of stocks and bonds and 0.01 per cent on derivatives.

While the advocates of unfettered capitalism are always reluctant to share, given the preferential tax treatment capital gains and dividends receive, such a measure would hardly be punitive, and would contribute substantially to efforts to relieve the grinding poverty in which much of the world lives. In the West, the revenues from the tax could be used for many purposes, including better funding for healthcare, climate change adaptation and costs, etc.

However, just as with proposals to combat climate change, I suspect that nothing will come of the G20 discussion for the same reason, namely that without universal application of such a tax, it would be unfair and counterproductive, or so we are told.

Clearly the North American powers-that-be have not been paying attention to the the needs of the people, as recently reflected in the Occupy Movement.

The Latest Threat To Financial Stability? Canadian Obstructionism

While we reflect on the concepts brought forth by the Occupy movement, namely that the many are ill-served by the control exerted by the few, we should also consider the role that our own government is playing in the world.

I have written extensively on the shame our government has brought to our name internationally by its unrepentant support of the export of asbestos to developing countries, going so far as to prevent it even being listed as a toxic substance under the Rotterdam Convention's Annex 111 classification.

Equally shameful is the obstructionist role Canada is playing at this weekend's pre-G20 meeting, when it tries to thwart a European proposal to add a minuscule tax on financial transactions that would yields billions in revenue to cash-strapped nations in Europe. In Canada, such a tax could generate more than $3.7 billion annually.

The proposal that our Finance Minister Jim Flaherty finds so threatening is as follows:

...a tiny tax of 0.1 per cent ($1 per $1,000) on transactions of stocks or bonds and only 0.001 per cent (1 cent per $1,000) on transactions of financial derivatives.

So a stock trade of $100,000 would cost an additional $100. Who is threatened by this?

And this isn't the first time the Harper government has worked against the interests of the majority. Prior to the 2010 Toronto G20 summit, he and his cabinet minister colleagues embarked on an international campaign to scuttle an IMF proposal for a levy on banks. As a result, the agreement by G20 leaders at the 2009 Pittsburgh summit to have the financial industry make a “fair and substantial contribution” for the costs of the crisis remains
unfulfilled.

Now what is it again that the Occupation movement has been saying about the 1%?