The response was predictable. No sooner had Gordon Brown expressed enthusiasm for a global transaction tax than the backlash began. Not something we like, said the Americans. We want lower not higher taxes, said the Canadians. Too hard to enforce, said the International Monetary Fund.
This is the last gasp of an ancien régime. The banks in 2009 are the Bourbons in 1789, the Romanovs in 1917. They existed in a bubble of privilege and took the public for a ride. They caused a financial crisis and triggered the biggest economic crash since the 1930s. They now expect the state to clear up the financial mess caused by this greed and stupidity through public spending cuts and higher taxes.
As the prime minister noted in St Andrews on Saturday, this is not on. "There must be a better economic and social contract between financial institutions and the public, based on trust and just distribution of risks and rewards," Brown said. Amen to that. He is 100% right and he deserves support.
Let's be clear. A global financial transaction tax was only one of four options floated by the prime minister, and there are formidable practical problems. Wall Street and the City will lobby hard against it. It will only work if all the major financial centres cooperate, and securing an agreement will be tough. Brown knew that he would get plenty of flak for floating his ideas at the G20 finance ministers' meeting, but is up for the fight.
http://www.guardian.co.uk/business/2009/nov/09/bank-tax-pays-for-development
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