Tuesday, 18 May 2010

CBC: Ottawa gives thumbs-down to bank tax

The CBC reports:
Canada launched a full-court press against the idea of a global bank tax Tuesday, as the prime minister and four senior cabinet members came out strongly against a proposal that's gathering global steam.

Prime Minister Stephen Harper said a proposed international bank tax would unfairly penalize well-regulated Canadian financial institutions that survived the global economic meltdown.

"You can't tax an economy into prosperity; likewise you can't tax a financial sector into stability," Harper said Tuesday.

The prime minister told a G8 and G20 youth forum on Parliament Hill that Canada's banks didn't have to be bailed out during the global financial crisis and shouldn't be saddled with the proposed levy.
Silly basketball metaphors aside [1], it's an interesting article, and the quote from Harper is a classic. I haven't seen any coverage of it recently in the UK, but it seems that plans for the Robin Hood Tax are proceeding. What I can't understand is why the Canadians are bothering to discuss the issue. What would they lose by simply refusing to participate in the tax?

Back over here, a quick visit to robinhoodtax.org.uk turns up distressing quotes from our New Leaders ...

We will create a safer banking system that serves the needs of the economy and protects us all from future crises. In the run-up to the financial crisis, British banks became amongst the most indebted and leveraged in the world - with disastrous consequences for us all. We will put in place a levy on banks. We are prepared to act unilaterally if necessary, but there is emerging international agreement on this approach in Europe and the US. Thanks to the efforts of the Robin Hood Tax Campaign's supporters, the campaign is going from strength to strength and is playing a crucial part in ensuring we reform the finance sector for the better of all of us.
Although we understand that it would be technically possible to levy a small transaction tax on sterling transactions alone, it would be much better to have a common approach by leading financial centres including the US, German, French and Swiss governments - so that we can ensure that the levy does indeed raise revenue and isn't simply avoided. The proceeds from such a tax could provide a modest source of revenue to be used for funding overseas development.
It does sound like we are well and truly doomed.

[1] I'd forgive ice hockey metaphors, but whatever they say about James Naismith, basketball is an American game.

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