TAX the BANKS

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Gabriel Sinduda
TAX the BANKS

It's time to tax the banks.

A campaign is already underway in the U.K. (see http://robinhoodtax.org.uk/) and some version of the idea has even been proposed by the IMF, strange as that may sound. You may have heard the news recently, with Finance Minister Flaherty going public with his veto on the idea:

http://www.thestar.com/business/bank/article/798599--flaherty-no-bank-tax-for-canada?bn=1

Seems to me that this should be a no-brainer, as a campaign that can lift with wings...

Even the general conservatives among us might agree that the banks can afford a small levy, given their truly gross quarterly returns:
http://www.thestar.com/business/article/777210--canada-s-5-biggest-banks-earn-5-09b-in-first-quarter

What do you say? Anybody interested in scheming on this one?

Time is right to at least rough draft a campaign in time for launch around the G20 summit coming up in June, in Toronto.

Many other coalitions from various countries around the world have already put this issue front and centre on their advocacy and campaign agendas. Seems to me that we are a few steps behind on this one here in Canada.

Hoping and happy to hear from you...

 

 

Fidel

I think most Canadians are still unaware of the bankers coup in Ottawa of 1991 when Brian Mulroney privatized the remainder of federal powers of money creation. It amounted to a huge bailout of our big six banks which were losing money at the time gambling on foreign stocks, gas and oil, and international real estate fiascos. Is it possible to inform Canadians of just how much our banks have been molly coddled and bailed out big time in the recent past? I don't know how interested Canadians would be today. The NDP tried to create some interest in a Tobin tax in the late 1990s. Mel Hurtig says than since the mid 1980s, Canada's banks have financed approximately two-thirds of foreign takeovers of Canadian corporations, crowns and valuable Canadian assets and using Canadians' financial savings to do it, too. Lots of Canadians savings were made available for what have been mainly US-based takeovers of Canadian economy, but we're still dealing with a $130 billion dollar infrastructure deficit across the country and shortage of money for social programs. It's never a question of how to fund corporate welfare or tax cuts for the billionaire oligarchy in this country. It's always social programs targeted for cut backs.

Tigana Tigana's picture

Thank you, Fidel. It's a start. 

Gabriel Sinduda

Some relevant issues, Fidel. It is clear we are financing our own obliteration. Never ceases to amaze me, for instance, how otherwise "progressive" and well-meaning folk will turn a blind eye when it comes to their own pension/investment portfolios, and the misery they are supporting. But with money in the bank it's even more abstract, as most don't consider this "investment" per se...

The Tobin Tax was indeed a great precedent and its legacy is strong I realize as many do recall the general idea at least, from the 90's...I figure this is just one more advantage in favour of such a campaign, that there is this precedent from recent history and so many folks have already considered and grappled with the idea...it is not introducing a whole new concept from scratch.

 

 

Gabriel Sinduda

Latest news re. the IMF proposal for a "universal bank tax" strikes me as SUSPICIOUS to say the least.

http://www.montrealgazette.com/business/Bank+failing+support/2943451/sto...

Here's my take on it:

The financial crisis is set to worsen, perhaps exponentially, starting this summer. (There are many indicators to support this claim, but I won't get into them here...) The big players know this and they are desperate for a release valve, some bone to throw the dogs, to ease the potential unrest that ensues. So they cook up this scheme for the "universal bank tax" and none other than the IMF (sorely in need of a makeover) is the one to table the idea. Top down. The countries muss and fuss and complain and eventually perhaps all come on board, accepting, acquiescing, feigning reluctance...

This way they parse up the deal ON THEIR OWN TERMS. Another inside job, just like the auto/insurance/mortgage/banks bailouts...Because they know the alternative is that a grassroots bottom-up UPRISING will make demands outside of their realms of reason. As with the Robin Hood campaign in the UK...

This all going on a hunch, I admit, but my hunches have been spot-on in the past.

For your consideration...

 

KeyStone

Unsurprisingly, Canada is once again voting the wrong way, as we do on just about everything these days.

I can't remember the last time Canada was on the right side of a contentious voting issue.

Gabriel Sinduda

For what it's worth, I've initiated a FACEBOOK page dedicated to promoting the TAX on BANKS.

TAX the BANKS CANADA

http://www.facebook.com/group.php?gid=109793712375879&v=app_2373072738#!...

Please feel free to contribute with posts to the wall, etc.

Definitely spread the word, if you think this is a good idea...the idea must swell with a popular murmur if it is ever to take hold...

 

Unionist

Jim Stanford agrees:

[url=http://www.theglobeandmail.com/news/opinions/bottom-line-canadian-banks-... line: Banks should pay their fair share[/url]

Quote:
In theory, finance is supposed to be the handmaiden of growth, facilitating productive investments in the real economy. In practice, finance is the tail that’s come to wag the economic dog. Financial profit-seeking is now an end it itself, with often disastrous results. [...]

In this context, there are two broad economic arguments for taxing finance. One is to discourage overly risky behaviour, by imposing a disincentive on excess leverage and other undesirable activities. In my view, direct regulations would be more effective than modest taxes at controlling these practices, and hence preventing the next meltdown.

But the second argument for higher bank taxes becomes more convincing with every uptick in public debt. Financiers are economically and morally obliged to make a larger contribution to the cost of running our government. This is justified by their uniquely profitable and protected status – not to mention that, if the state hadn’t ridden to their rescue, the bankers would all be wearing barrels today.

Cancelling the latest corporate tax cuts would recoup $2-billion a year from the financial sector alone. Better yet, restoring tax rates for the financial sector to where they were when the Conservatives took office (21 per cent, plus a 1.12 per cent surtax) would boost the take to $4-billion a year.

So before Ottawa cuts a single person off EI, lays off a single civil servant or sells a single asset in the name of deficit reduction, it had better tap the banks for their full contribution to running the government that saved their own bacon.

torontosask

First time poster.  I put a brief summary of the fallout from Flaherty's bank tax 'victory' on my G20 website, including links to stories of those happy about it (banks, Canadian gov't, lobbies) and who's not. The articles by Mel Watkins and Thomas Walkom are particularly good.

http://www.g20breakdown.com/2010/04/g20-bank-tax-fallout-what-happened-w...

The Robin Hood tax bunch have a Canadian on-line presence as well: 

http://atthetable2010.org/

http://robinhoodtax.ca/

Flaherty is really pushing the idea that Canada's banking system is wonderfully prudent, and thus it shouldn't be punished with the tax.  I think this is the key notion that must be countered in campaigning.

 

 

Fidel

[url=http://www.brianmasse.ndp.ca/node/1032]NEW DEMOCRATS CONDEMN CORPORATE INCOME TAX CUTS IN FACE OF MOUNTING DEFICIT[/url] June 2009

Quote:
OTTAWA – Today New Democrat Finance Critic Thomas Mulcair and Industry Critic Brian Masse revealed a $170 billion loss of foregone federal revenue due to the government’s implementation of steady corporate income tax cuts. 

The amount of revenue that will be lost as a result of these cuts is equal to the recent TD Bank forecast of the total federal deficit over the next 5 years.

Harper has continued the corporate income tax cutting regime, first instituted by the Liberals, cutting the corporate income tax rate from 29.12% in 2000 to 22.12% in 2007 and has scheduled further cuts reducing the rate to 15% by 2012. /.../

IMPACT OF FOREGONE REVENUE ON BUDGET BALANCE AND FEDERAL DEBT

If the corporate income tax reductions enacted since 2001 had not been made, and assuming that the resulting additional revenue had not been spent, the federal government’s budgetary balance and accumulated deficit (the “federal debt”) would have been affected proportionately to the figures in Column C of Table 2 and Table 3.
To illustrate, consider the federal budgetary balance in fiscal year 2004–2005. Column C of Table 2 shows that the general federal corporate income tax reductions in calendar year 2004 cost the federal government $10.2 billion. Assuming that calendar years and fiscal years are identical, which they are not,( ) the budgetary balance for 2004–2005 would have been $11.7 billion instead of $1.5 billion. Similarly, the federal debt for 2004–2005 would have been $484.5 billion instead of $494.7 billion.

Our old line party fiscal Frankensteins couldn't manage a lemonade stand without effin it up.

Gabriel Sinduda

I am currently in discussion with some groups in Ottawa who are organizing to lobby for the TAX ON BANKS.

If anybody would like to work on this initiative here in Toronto pls get in touch here:

http://www.facebook.com/group.php?gid=109793712375879&v=app_2373072738#!/group.php?gid=109793712375879&v=info

 

 

siamdave

- first, you just gotta figure if the IMF endorses something, it is very probably NOT good for the average citizen of the world. In this case it's not necessarily bad per se, but it's just a distraction, something people can waste a lot of time and energy on without actually accomplishing anything useful. Like anything the citizens do petitioning the masters.
Banks - commercial banks - create essentially all of our 'money' in Canada (and other western 'democracies'). They create this money out of thin air, essentially, punching numbers into computers. On this 'money' they create out of thin air - whether your $1,000 loan to buy a new computer or the federal gov 'borrowing' X tens of billions of dollars - they then demand 'interest' every year. And from this - all of our financial problems arise. As explained in some detail here - What Happened? http://www.rudemacedon.ca/what-happened.html .
Taxing banks is not going to help the current financial mess, or prevent future ones - taking control of our own money supply is required, as any sovereign country should have. This will not be easy, of course, as kind of the 'begged question' is that in order to take control of the banks, we first need to establish some form of real 'democracy' in this country which will challenge the real rulers, which doesn't appear that closely on the horizon these days.

KeyStone

There seem to be two seperate tax proposals floating around out there. Just to clarify:

There is the Robin Hood tax, which would put a small tax on bank transactions to help fund social programs.This tax would make a major difference to the world, while having little effect on major banks. Naturally, this proposal is being completely ignored by the decision making communities, and is only discussed by left-wing ideolgues.

There is also the tax being currently contested, which is more of an insurance scheme, so that if banks (such as those in Iceland or Greece) fail, the tax would go towards lifting them up. This is the proposal currently being touted by the IMF and being championed by the EU. Canada, is of course, against the tax, since we are currently against all taxes.

Jacob Richter

I would rather turn such an insurance scheme into a protracted tax-to-nationalize scheme.  Instead of the proceeds serving as insurance for future bailouts, they should be used to slowly turn the global financial system into a single public monopoly, similar to what economist Rudolf Meidner proposed for the Swedish economy as a whole:

http://www.voiceoftheturtle.org/show_article.php?aid=330

Quote:
Similarly, the German-born Rudolf Meidner, chief economist at the Landorganisationen, or LO, the Swedish trade union federation, outlined a proposal in the 1970s that came to be known as the 'Meidner Plan,' a radical response to the two strategic problems facing the labour movement at the time, i.e. "how to increase the level of savings but not inequality of wealth, and how to ensure that an increase in savings would translate into the kind of investment that would sustain full employment, real-wage growth, and continued welfare-state expansion."

Against the backdrop of a solidaristic wage policy, and based on the moral claim that corporate profits derived in part from hidden public subsidy-such as a healthy social infrastructure--the Meidner Plan required that corporations return a significant percentage of their profits to workers as equity. To safeguard capital formation, employees would not have the right to sell their shares but, instead, they would be entrusted to regional public bodies--'wage-earner funds,' or löntagarfonder--which would maintain investment for a time (assets accruing to the funds remaining as working capital within the firm) and direct the eventual returns to meet agreed-upon social purposes. This would not only provide an income stream from capital for underwriting Swedish public spending (thereby easing some of the pressure on taxation) but would also have made it "more difficult for the Swedish banks and multinationals to undermine Sweden's welfare system by running down their stake in domestic facilities and siphoning off large resources to overseas investments."

The wage-earner funds, as Donald Sassoon has noted, "amounted to the abolition of private ownership and control by the capitalists themselves." Depending on the version (different ones circulated in various drafts for years), companies with over 50 or 100 employees--the latter being two-thirds of private sector employment--would have been transferred to collective ownership as, gradually, the funds increased their holdings through the annual receipt of new shares. Meidner estimated that it would have taken wage-earner funds 35 years to acquire 49 percent of the equity of a corporation operating at an annual rate of profit of 10 percent. But the real beauty of the scheme was that the higher the profits, the faster the socialization: the mirror-opposite of the various instances of 'lemon socialism' which have seen public ownership extended only to those sectors of the economy where enterprises were operating at a loss.

Gabriel Sinduda

This is a great exchange, thanks to everyone who has come forward with varying positions...

My thinking is that it really is too late for any kind of reform, bank and otherwise. The situation at present--an oligopoly controlling a mess of arms and armies, a sentinel of soulless capitalist swine who have proven themselves capable of committing acts of genocide for dollars and bling--you just can't reform a monster. It must be killed.

Unfortunately, we are generally too happy to feed the beasts.Through mortgages and real estate. Cars and trucks. Television. Newspapers. Processed foods. facebook. Coca Cola. Not to mention pensions and investment portfolios of all kinds.

For every dirty banker there's ten thousand idiots who want a return on their investments.

Seems to me.

 

Boom Boom Boom Boom's picture

If the banks are taxed, don't they just pass this on to their customers, and we all pay more?