UN Summit should endorse financial transactions tax

The International Trade Union Federation (ITUC) is calling on governments to commit to introducing a financial transactions tax (FTT) at September’s United Nations Development Summit to help tackle global poverty and accelerate action on jobs and climate change. The UN Summit, to review progress on the Millennium Development Goals (MDGs), will take place against a background of growing global unemployment and inequality and major set-backs on economic development in countries across the globe. An FTT could raise between US$200bn and US$900bn depending on the way it is structured and the level at which it is set, according to the ITUC submission which is being sent by its national affiliates to governments in preparation for the Summit. Even a small percentage of the funds raised by an FTT would help put in place a social protection floor, which would give a major boost to tackling poverty. The submission sets out the case for putting an FTT at the centre of an overall package of measures which would also tackle corporate tax evasion and ensure effective regulation of banks and finance.

According to the trade union body, instead of simply focusing on spending cuts, governments need to increase revenues to ensure employment, public services and development aid. Parts of the finance sector are awash with money, just two years after taxpayers had to bail out poorly regulated banks. An FTT would not solve all the world’s problems, but it would certainly be a good starting point by moving capital from speculative profiteering to kick-starting the real economy and helping avoid a double-dip recession which would have horrendous consequences for the poorest countries in particular, trade unionists say.