Please Robin, no Tax in this Hood

Everyone loves the story of Robin Hood - stealing from the dishonest rich to feed the hard working undervalued poor is a beautiful story, if a little hypocritical.  We men enjoy watching the sword fights, stunts, clever little traps (hiding under the leaves? Brilliant) and women in corsets while we enjoy imagining ourselves being a 'real man' outside fighting for survival.  Women, and I researched this, like the rugged men protecting their wives and of course, Kevin Costner.  As soon as I heard there was a tax being named after such a beautiful story, I thought to myself "awesome, this sounds a bit exciting'.  Then I read that was essentially targeting bankers - those of you that have read my previous clutterances will appreciate i'm not their biggest fan - and thought to myself "taxing the bankers to help those less fortunate - GENIUS!  However, if you're reading this and thinking wow a 'positive outlook' on something, think again, it isn't.

As Bill Nighy sits there, looking and sounding like the stereotypical squirmy banker that we have all come to resent I listened to every single one of his words.  One of my favourite actors tell us of the three fairly succulent birds that The Robin Hood Tax aims to kill with one stone.

• Higher taxes on the wealthy and therefore reducing inequality.
• A curb on speculation and financial market excesses.
• More money for global public goods and aid.

Take nothing away from the objectives, they are all worthy of making some sort of effort but The Robin Hood Tax is not a good way to go about it.  The allure of the title will mean that people will hastily become 'fans' on facebook, 'follow' on Twitter and in the end, vote yes.  This shows the power of clever branding and the naivety of social media users.  The Robin Hood Tax could arguably be called "Class War Tax' - far less appealing when you think about it.

One of the many pulling points of the campaign is that speculators will pay the taxation and nobody else, which to be blunt, is incorrect.  Think of it this way, does Richard Branson personally pay your airline passenger tax when you fly Virgin? No.  When a tax targets something or someone directly, it will always be spread out and moved on elsewhere, that is life.  Nobody knows how or who will end up paying the financial transactions tax, but it is most likely to be a customer of some sort.  People who are customers of firms, or companies that use the financial markets, or those of us who are saving and investing in financial assets will end up bearing the costs.  Which, when you think about it, is nearly all of us.  When I saw the proposition I certainly thought to myself that any way of making the bankers drinking less champagne is a good thing, but don't kid yourself, there will be no fewer corks popped.  Although they may be snobby, webbed footed, six fingered aristocrats, they are definitely intelligent enough to figure out how to make the payments minimal to their assets.

Without sitting back and thinking about how The Robin Hood Tax will actually go about raising shed loads of money for good causes, one can be excused for merely reading the headline.  However, the concept of 'aid' is far more complex than just helping those less fortunate.  Under the current government, with the criminal Gordon Brown being the biggest culprit - and he is a criminal, but that is for another day - the budgeting of the tax payers money is incredibly poorly organised.  The current government are spending a pitiful amount of money on aid relative to need.  We should be making a concerted effort to reduce poverty, increase health care, education and employment but the Labour government is not doing so.  Aid is a small fraction of overall spending and could be raised in other ways than introducing another tax.  The current limited state of aid is NOT due to a lack of available funds, but because there is no agreement or organised structure to what to actually do with it.  Far too many people believe - wrongly in my opinion - that aid merely transfers money from poor people in rich countries to rich people in poor countries, which in turn then disappears from where it is needed due to corruption or general waste.  The Robin Hood Tax is described as a 'good tax' that is worthwhile, yet it could end up being such a monumental let down.  A good tax is not just one that nobody notices - something that The Robin Hood Tax is being described as - but one that discourages people from doing bad things and encourages people into doing good (therefore improving societies economic state).  It seems the founders of The Robin Hood Tax are aiming to bypass public opinion on aid by 'taxing the rich' and assuming that the public will not ask too many questions.  The point we should be discussing is what to do with the money raised for aid, but The Robin Hood Tax would just mean that the extra funding raised would just fall to people who don't allow any public insight or choice.

Furthermore, there is the problem with inconsistency.  Whether the money raised from a new tax on the financial sector increases funds for international aid or domestic needs, it will not remain a constant.  The nature of the financial market is that it is cyclical.   How can we possibly see a cyclical marketplace as a good way of raising money for aspects of 'life' that are so important.  Essentially the result would be that while we are in an economic boom, aid would increase due to the quantity of money changing hands, however, during a recession for instance, exactly the opposite would occur and the people who need aid, would be left with nothing.  Aid should be the opposite of this, above this, separate.  It should remain consistent, well thought out, planned and effective, something the financial marketplace is clearly not.

Taxing financial transactions at that level is too blunt and too overt.  These people are not stupid - though it pains me to say so - they will simply just move away.  Big industries with big companies and big big UK headquarters will merely move location to avoid the tax. This brings to light two more faults of the proposition.  Firstly, to work we need the companies we are trading with to be under the same tax rules - which they are not.  International Robin Hood Tax would be even more difficult to undertake.  If we put the tax on our industries, people would just stop trading with the UK.  In addition to this, or because of this, UK companies would relocate.  Unfortunately, though the masses down the economic ladder resent big business and industry professionals, our economy needs them.  The revenue IS helping the UK, perhaps not enough, but it is doing more good than harm.  To start targeting those at the helm of it will mean they will move their business to another country, therefore leaving the UK with nothing.  This would increase unemployment, reduce valuable funds, weaken the pound even further and generally weaken the economy, which in turn would reduce aid, the very thing the tax was set up to increase.

The people who have founded and formed the idea of this tax have their heart in the right place.  I have no criticism for their aim, merely the method.  It seems however, that The Robin Hood Tax is a fascinating example of emotion defeating logic and fact.  It says 'lets have a tiny tax on the nasty people and raise money for good things' and who could possibly argue with that? Me.

To raise money effectively, it needs to be new money - which it isn't.  It needs to be public knowledge as to what is being done with it - which it wouldn't be.  It needs to be organised effectively - which it won't be.  The Robin Hood Tax is more an example of clever PR and marketing than anything else.  Full marks for purpose, but an overall fail because of their method.