Profound Health Impact for Small Change
Much of the discussion surrounding President Barack Obama's proposed fee on financial institutions to help cut the U.S. deficit overlooks how similar revenue-generating ideas could close the glaring gaps in the global fight against several health emergencies. Even though the past decade has seen a dramatic increase in efforts and funds dedicated to global health programs -- governments and private sources contributed upwards of $22 billion in 2007 -- huge shortfalls exist. Unprecedented efforts have given 4 million people living with HIV/AIDS access to treatment, but 10 million more have been left behind. The lack of maternal and childhood health services, including emergency obstetric care and vaccinations against pneumonia and measles, desperately needs to be addressed. Without better diagnostics and medicines, we cannot hope to stem the tide against tuberculosis or the most neglected diseases like Chagas, sleeping sickness, and kala azar.
The World Bank recently estimated that $12.5 billion is needed annually to scale up effective nutrition programs globally, including therapeutic and complementary feeding at the community level, for the millions of young children cut down by the scourge of malnutrition. But as of 2008, only $300 million was available -- less than 2.5 percent of the sum required to meet the needs -- even though malnutrition claims between 3 to 5 million children every year.
The World Health Organization predicts that none of the health-related Millennium Development Goals that the international community had set itself will be met by 2015. Clearly no less than a paradigm shift will do.
When I helped open a Doctors Without Borders AIDS treatment program in Thailand in 2000, the landscape was bleak. The pandemic continued to decimate communities throughout Asia and Africa, and there was little hope on the horizon. Pharmaceutical monopoly power held medicines out of reach at a cost of around $12,000 a year, political leaders and donors hid their heads in the sand, refusing to expend political will and resources as the death toll mounted.
Through the concerted efforts of activists, government officials, international groups, and medical professionals, today Thailand has near-universal access to treatment. Since then I have seen firsthand how similar efforts, supported by the international community, in countries across Africa, Asia, Latin America and Eastern Europe have brought back the lives of people with HIV that already seemed lost.
But just when many of the hardest-hit countries are in the midst of reaching more and more people with HIV, TB or malaria treatment and are ready to similarly improve other health services, the interest of donors is waning, even to the point of reneging on promises made only a few years ago.
Barely four years after world leaders met at the 2006 United Nations General Assembly and committed to universal access to HIV prevention, treatment and care, political and funding support is retreating. Stagnating funding levels for AIDS treatment, as the Obama administration is proposing, or shrinking contributions like those planned by the Netherlands and Germany would cruelly punish the success of previous years and risk jeopardizing ongoing efforts.
This is why funding dedicated to global health efforts is so urgently needed. Variations on Obama's fee on financial institutions like a financial speculation tax or a foreign currency transaction tax have already garnered the support of governments in Europe.
One idea is to levy as little as 0.005 percent on currency transactions involving the world's most traded currencies. Traders would barely notice, but the benefits would be enormous -- yielding $33 billion a year. We already know such a system can work. Since 2006, UNITAID has raised nearly $1 billion through a small tax on airline tickets in countries in the developed and developing world to fund AIDS, TB and malaria treatment programs around the world.
How to fully fund and implement effective health programs around the world is not an academic exercise, but rather one of the most urgent moral questions of our day. As a physician, I know all too well that there are people behind these statistics, families whose children and loved ones' lives depend on whether we are successful in addressing these crises. And with revenue from innovative financing mechanisms like a tax on financial or currency transactions, we may just have a fighting chance.
By Tido von Schoen-Angere, MSF / Access to Essential Medicines
http://www.huffingtonpost.com/tido-von-schoenangerer/profound-health-imp...
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Robin Hood tax: A well thought-out strategy to fund health
Comparing the history and vision of Robin Hood to the initiative of trying to save human life and suffering will give a good picture to all stakeholders striving to advocate for funding for health, including HIV and AIDS.
Levying a 0.05% tax on speculative banking transactions in developed world economies can lead to raising billions of dollars to support health services in those countries, but more so in support of the third world and developing countries, where the economic pinch is being felt most.
With lengthy policy frameworks and bureaucracies coupled with the current economic hardships affecting the world's economies, the Robin Hood Tax is not only very timely, but could be replicated whenever a need arises, though the naming and branding of the tax tag may be varied to suite the varying purposes.
Support for the idea will continue to gain a lot of momentum with time, but several concerns remain to be addressed relating to how it will successfully get implemented. Issues like, after signing for support, where will these resolutions be forwarded to for approval? Is it going to be at the UN, EU or at country parliament levels? To be binding, do the banks and other organizations have to consent, or will they be compelled by law to abide? Otherwise, support for the tax is overwhelming.
Submitted by Tusabe in Uganda
http://healthdev.net/site/post.php?s=6445
The unthinkable became thinkable
Christine Lagarde, France's guru of the free market, could never have imagined that she might find herself seated over fruit salad and tea on the Left Bank of the Seine, selling the merits of a scheme to rein in the forces of global capital and channel vast sums from the banks into the hands of the people.
But in the nearly three years since President Nicolas Sarkozy appointed her to bring U.S.-style market discipline to the creaky French economy, the world has turned upside down and radical economic ideas are no longer sooutré. "I am, economically speaking, a liberally minded person - I'm not a state interventionist, if you take my point," the French Finance Minister tells me quietly, almost by way of apology.
And then delivers the pitch she is bringing to her fellow ministers at the G7 finance summit in Iqaluit this weekend: to get the world's economies to place a tiny tax, of a small fraction of a percentage point, on all international financial transactions - there are millions every day - and use it to collect billions and trillions of dollars for collective use by the governments of the world.
Even a year ago, the Tobin tax - named after its inventor, economist James Tobin - was an idea from the fringes of political thought, the sort of thing that odd-looking people who corner you at parties talk about at length. But the prospect of a total economic collapse concentrates the mind wonderfully. Long-abandoned ideas, such as the state takeover of banks and massive taxpayer support of private-sector employment, suddenly became mainstream policy among conservative governments. The risk of slowing down markets and raising the cost of finance sounded less serious. The unthinkable became thinkable. Then, in December, British Prime Minister Gordon Brown abruptly announced at a G20 conference that a "microtax" should be applied to wholesale market transactions, with the funds used to create a global "insurance policy" to protect against future market failures.
Angela Merkel, the conservative German Chancellor, jumped on board, and the three countries are pushing the idea hard in Iqaluit today. It's still a hard fight: U.S. Treasury Secretary Tim Geithner doesn't like it. But former U.S. central banker Paul Volcker, the influential mind behind President Barack Obama's dramatic banking-reform proposals, spoke in its favour.
It's fitting that we end up discussing the mechanics of this strange new tax here, in the cavernous, baroque parliamentary office that was once the home of Jean-Baptiste Colbert, the 17th-century finance minister who virtually invented the use of government regulation as a tool to shape and secure the economy. He, too, was employed by a well-known conservative, King Louis XIV. The state and the market have had a long and intricate dance together, and this is its latest pirouette.
The Tobin tax may overcome the barrier of political resistance, but it faces other hurdles. The first - technological - is no longer so difficult: The micro-billing of minuscule amounts on millions of transactions is how the prosperous core of the online advertising industry now works. The larger problem is that many international transactions do not go through central banks or exchanges but take place in informal over-the-counter markets, unseen by regulators. The world would need to design a centralized financial clearinghouse for all transactions. As it happens, this idea is popular elsewhere, notably among governments hoping to put an end to tax havens and other tax-avoidance schemes.
Even before those problems are solved, though, a fight has broken out over how to use the money. Some would follow Mr. Brown's lead and use it as a strict financial insurance scheme (what his Chancellor of the Exchequer, Alistair Darling, described to me as a "living will"). Others would hand it to the International Monetary Fund for larger economic development uses.
There is a strong desire, notably in Germany, to use the billions as a "green fund" to pay for carbon-reduction schemes and environmental defences. And, as a number of people have noted, it would raise enough money to lift the world's billion poorest people out of absolute poverty, if spent on wise programs.
At mention of this, Ms. Lagarde recounts a famous fable by another 17th-century Frenchman, Jean de La Fontaine. "The farmer walks to the market with big jar of milk on her head, and she thinks, 'Once I sell my milk, I will buy a cow and I will buy this and that,' and she gets so excited by all this that she starts dancing, and this makes the milk fall off her head and spill. And all the dreams are gone." The minister, ever poised, gives a wry smile. "And so we don't even have the jar of milk at the moment!"
Doug Saunders, http://www.theglobeandmail.com
http://www.globalpolicy.org/social-and-economic-policy/global-taxes-1-79...
A Tiny Tax on the Big Banks, Huge Change for the World
UK global health and anti-poverty campaigners and director Richard Curtis (Four Weddings and a Funeral fame) teamed up today to launch a campaign for a simple idea: A tiny tax (less than one quarter of one percent or less) on currently-untaxed financial transactions like currency speculation and high frequency stock trading could raise billions to create jobs, fight AIDS, address maternal health, and fight climate change.
President Obama's proposal for a Financial Crisis Responsibility Fee to recoup federal bailout funds is not enough--it would not stop Wall Street churning and would not generate the money needed to reinvest in communities that have been hit hardest by the crisis--here at home and around the world.
Check out the fantastic video starring UK actor Bill Nighy on the facebook page at www.facebook.com/wallstreettax.
So what's the idea?
For those of us who aren't involved in speculation--who don't trade currency or stocks on a daily or minute-by-minute basis--we wouldn't even notice. For those who are, economists tell us that slowing down speculation would actually be a good thing for the real economy.
Meanwhile, it would raise somewhere between $30 and $150 billion per year to make up for the real impacts of the bank-caused economic crisis...
In a moment when working folks in the US aren't seeing much of a "recovery" it could be a huge help to create jobs.
It would also enabling the US to make good on our global promises.
The economic crisis has perhaps worst hit those on the who can least afford it--an estimated 46 million more people are living in poverty as a result of the crisis, AIDS clinics in Africa are being forced to turn away patients, and an estimated 200,000-400,000 more infants will likely die in developing countries as a result.
Meanwhile the affects of climate change are hitting the most impoverished countries with no hope in sight. Despite having contributed massively less than wealthy countries to CO2 emissions, impoverished communities in Africa and Asia are facing islands being submerged by rising sea levels, creeping droughts causing starvation, and multiple other affects.
This seems very much like an idea whose time has come! Join in!
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Matthew Kavanagh
http://www.huffingtonpost.com/matthew-kavanagh/a-tiny-tax-on-the-big-ban...
Bernard Kouchner Calls for Currency Transaction Tax
The French foreign minister surprised his audience, and not least the British, in the annual meeting of the Leading Group on Innovative Finance for Development, by proposing to implement the Currency Transaction Tax (CTT).
"I promise you, and our country, France, is ready to assist a pioneer group of States in applying this type of tax which was already adopted in our parliament in 2001. So it is possible to implement such a measure, which could perhaps be applied to the European market initially." - (English communiqué is found here)
The comment went around like wildfire in the French press, where the finance minister Christine Lagarde, politely replied in Le Monde that the tax "isn't currently being investigated", while the minister for development Alain Joyandet supportive of the tax said on the RFI radio that the tax would bring in an extra $30 to $60bn in additional annual resources to meet development targets.
The proposed tax would apply to all currency transactions in participating currencies at a rate of 0.005% of the value of the transaction, or half a basis point. It is a market that has a daily estimated volume of $4tr (yes - trillions), while the last BIS estimate from 2007 places the volume at $3.2tr. This by all standards is an enormous tax base.
Banks of course will argue that they are already taxed on their overall profits, and therefore taxing currency (or for that matter any financial transactions) is taxing twice. This is besides the point, as taxation needs to apply where taxable rents are found, and taxation applies companies already at different stages.
Certainly a tax of $50bn would not just eat to the margins of the banks, it would be passed on to their clients who once again are not retail customers (making up only 2%), but hedge funds and other institutional investors. Taxing hedge funds especially should be seen as a good effort as some 70% of them are placed in offshore secrecy jurisdictions, and thus offer avenues for tax evasion.
There are at least three good reasons to support the CTT:
- Taxing currencies increases the transparency of the single biggest financial market in the world, forcing regulated settlement houses to be established and ending the opaque Over the Counter (OTC) trading. If information will be shared with tax authorities, it can be used as a proxy for spotting suspicious transactions ranging from criminal activities to tax evasion.
- If the tax raises an extra $50bn while mainly appying to the speculative markets it should be seen as an equitable one, in line with the redistributive function of taxation. Furthermore, if money is then given for developing countries as is promised, it would help ongoing Millennium Development Goals programmes as expendture "earmarking" is for a just cause.
- The CTT would open the road for further taxes in the financial sector, where we wholeheartedly support much wider financial transaction taxes, which could be used in every country to monitor the financial markets and raise domestic revenues. A bank transaction tax called the CPMF raised $20bn in Brazil alone, at a rate of 0.38% excluding the stock exchange, movements between two accounts of the same person, and social security benefits. Unfortunately the tax was voted down in December 2007, due to opposition's stance against it. To cover the shortfall the government raised other taxes in the financial sector, and reduced spending.
The CTT is often still seen as a Tobin Tax, which relates to another originally Keynesian idea of sanctioning "herding" behaviour in markets where traders follow a "rally", which led James Tobin to originally propose the tax on currency transactions at a rate of 1%. It is this idea that Mme. Lagarde is suspicious of, and rightly so as when herding occurs better measures (such as capital controls, or obligatory deposit requirements) can tackle the issue.
The CTT has the double function of raising revenues and improving regulation of financial markets through transparency. It is this lack of transparency that largely led us to the current financial crisis, and has contributed to previous currency crisis as bubbles build-up in secretive off balance sheet vehicles, and structured finance thrived in secrecy rather than its capacity to manage risk. Therefore, efforts towards taxing currency transactions should be supported.
http://taxjustice.blogspot.com/2009/06/bernard-kouchner-calls-for-curren...
Yes to taxing currency transactions
I think the idea of putting a small tax on money changers is an excellent idea, and one that provides a sustainable source of revenue. Political commitments, promise and pledges from the world's leaders have shown themselves to be 'on track' during the administration that makes them, the next rolls back and cuts the allocation. Innovative financing should be independent of governments, or at least designed so that the long term sustainability is carried by those intstitutions who will be there regardless of elections.