Sarkozy Optimistic At G20 On Global Transaction Tax Amid Occupy Wall Street Groundswell

WASHINGTON -- With Occupy Wall Street driving the political conversation in the United States, French President Nicolas Sarkozy expressed optimism Thursday that a global transaction tax to hit the world's financiers is becoming increasingly likely.

"I think we have a common analysis on how to get the world of finance to contribute to resolving today's crisis," Sarkozy told reporters.

Sarkozy's comments follow those of Microsoft-founder-turned-philanthropist Bill Gates, who endorsed the global transaction tax this week, saying that "it is very plausible that certain kinds of FTTs could work. ... This money could be well spent and make a difference."

Sarkozy is attending the G20 economic summit in Cannes, where he and leaders from other European Union countries are pressing President Barack Obama on creating the transactions tax, aimed at curbing risky speculation by financial giants. Several other nations have expressed an interest in the tax, but the U.S. has been reluctant.

According to economist Dean Baker, co-director of the Center for Economic Policy and Research, applying a tiny tax of less than one percent on every financial trade could raise up to $25 billion per year for the U.S. government alone, even if trading volumes declined 50 percent as a result of the tax. A financial transactions tax has long been regarded by financial reform advocates as a key method to curb Wall Street bonuses, by restricting the short-term profits banks can make on risky speculative maneuvers.

"We need the leadership of Barack Obama," Sarkozy said after a meeting with the U.S. president.

While President Obama continues to oppose the policy, he may be swimming against a growing current of anti-Wall Street resentment, with the Occupy protests at the source.

A domestic version of the transaction tax was introduced yesterday by Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.), who both invoked Occupy Wall Street as a reason for introducing the tax.

"We've been talking about fixes and talking about reining in speculation and they're basically giving a human voice to the policies and principles we've been advocating," DeFazio said in a press conference.

"The movement has changed the political discourse in this country and it has certainly made the climate more receptive to this kind of idea," said Costas Panayotakis, an associate professor of sociology at the New York City College of Technology at CUNY. "Protests of this nature do pay dividends and we saw that with Bank of America as well."

And while President Obama is against a global tax, his advisers said he supports countries that want to institute such laws at the domestic level.

"I think there is broad consensus between the Europeans that the president met with this morning and ourselves about the ability of each to pursue this in their own way, whatever way they see to be most effective," said Mike Froman, the Deputy National Security Adviser for international economic affairs.

 

Comments

[Kyle Schott]

01:58 PM on 11/04/2011

lol of course wall street says the tax is stupid. Guess what, your not the majority wall street. Most people hate investment bankers and other ultra rich more than genital herpes. Your time is coming. If you destroy the middle class, they will come looking for you, literally. At your mansion.

[Nolan Darch]

01:00 PM on 11/04/2011

How the hell would a new tax on the poor going to stabilize anything? The ultra rich don't pay taxes and never will. They are trying to push us over the edge.

[Robert Fanney]

11:42 AM on 11/04/2011

Robin Hood tax + reinstate Glass Steagall and we might gain the stability, accountability and feedback of funds into the real economy we need.

Please help by signing these petitions

http://www.change.org/petitions/the-us-senate-reinstate-glass-steagall
http://www.change.org/petitions/tax-wall-street-for-jobs

[Zeke Bourdain]

11:10 PM on 11/03/2011

An F.T.T. would throw many thousands of people out of work, deepen this country's financial problems -- and, quite possibly, end up reducing government revenue. Let's not go there just now, ok?

[Robert Fanney]

11:45 AM on 11/04/2011

The financial industry is already bloated and this results in transfer of wealth and intellectual capital from the real economy. Moving money around for profit has very little benefit to society at large. An FTT would do what is needed -- encourage investment while discouraging manipulation.

[Kyle Schott]

02:24 PM on 11/04/2011

You don't even support your claim. Where are you getting this information. All you say is it will, because it does. This is a formal logical fallacy called circular reasoning and it makes your statement fallacious. A 1% global tax on financial transactions isn't going to stop anyone from investing if they are making money in the market. The only thing it will curb is the extremely risky investing that caused the collapse in the first place.

[FDRinhell]

10:24 PM on 11/03/2011

If the West passes the Global Transaction Tax, watch banks move their operations from London, New York, Paris, and Berlin to more amenable centers such as Dubai, Hong Kong, Singapore, and Mumbai. This is an economic disaster according to many respected economists not working at leftwing policy groups including Ken Rogoff and Paul Volker.

[Despyria]

02:32 AM on 11/04/2011

Claptrap. The doomsayers in this country have stated that if we impose regulations and rules on financial traders and institutions in this country it will bankrupt us and destroy our economy. However Germany imposed regulations and restrictions for risky ventures and threatened jail for any traders involved. Germany has the strongest economy in the world right now (yes stronger than China's).

If banks follow Cheney to Dubai lets hem them in their so they can't come back they can't do business with the civilized world. Make them pay the price. But I don't think they will, and if they do, then they're traitors and we are best shut of them.