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Banks should pay their fair share - Social Justice Ireland welcomes EU proposal for a financial transaction tax -
Social Justice Ireland strongly welcomes the progress made towards introducing a Financial Transaction Tax in the EU. This would be a very efficient mechanism to ensure banks and financial institutions made a contribution towards resolving the current series of crises which were, in great part, caused by these very institutions. It is time financial institutions paid their fair share.
Bankers bonuses should be replaced by billions to help poor people. It would mark a welcome change from the current process of dispossessing poor and vulnerable people to pay back 100% of the money gambled recklessly by banks and financial institutions.
The European Commission presented the proposal for a financial transaction tax in the 27 member States of the European Union as part of its overall budget strategy. The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU.
The exchange of shares and bonds would be taxed at a rate of 0.1% and derivative contracts, at a rate of 0.01%. This could approximately raise €57 billion every year. The Commission has proposed that the tax should come into effect from 1st January 2014.
Introducing the proposal, the President of the European Commission, José Manuel Barroso said “in the last three years, Member States - I should say taxpayers - have granted aid and provided guarantees of € 4.6 trillion to the financial sector. It is time for the financial sector to make a contribution back to society. That is why I am very proud to say that today; the Commission adopted a proposal for the Financial Transaction Tax”.
Mr Barroso went on to justify the Financial Transactions Tax by saying “It is a question of fairness. If our farmers, if our workers, if all the sectors of the economy from industry to agriculture to services, if they all pay a contribution to the society also the banking sector should make a contribution to the society”.
Mr. Barroso also pointed out out that at present the financial sector is not making the proportionate contribution to society in many EU Member States.
Social Justice Ireland has advocated for years for such a tax and proposed the income should be used to tackle poverty and climate change across the world with particular focus on achieving the Millennium Development Goals. We welcome Mr. Barroso’s proposal and his recognition that the financial sector is not making a proportionate contribution to economic recovery, given that banks and the financial sector caused the current crisis.
Those who oppose this proposal should realise that if the well-being of people and the planet are at risk, the future of the financial sector is too. The right thing to do now is to put people first, supporting the introduction of a Financial Transaction Tax for a better future.
To access Mr. Barroso’s speech to the European Parliament click here.