On Monday, Cardinal O'Brien took on David Cameron in a statement which declared that Government policy was not doing enough to help alleviate suffering througout impoverished communities in the UK.
Cardinal O'Brien dubbed by The Guardian as "Scotland's most senior Catholic" is pressing to enforce the Tobin tax which seeks to attach a small, realistically percentile, static rate on domestic financial transactions.
This would create a Government fund to be able to directly tackle poverty within the UK. The Cardinal accused the Government of having "immoral economic policy" which exacerbates the situation of those who are financially less well-off. A full transcript of the BBC1 Sunday Politics in Scotland is available online.
What do you think? Is it the case that taking small fractions of large transactions in the City parallels a Robin-Hood-esque charitable mentality, or is it a Robin-Hood-esque aggressive concept which looks for confrontation rather than contribution.
The problem with such a tax is that one of the UK government's main source of revenue is its tax revenues gleaned from the 40% and 50% income tax brackets. Unsurprisingly, a disproportionate representation of these earners work in the City of London, which remains one of the world's largest financial centres, especially in forex trading, seeing nearly $2 trillion worth of trading EVERY DAY. These markets are so fluid, and marginal returns so low, that even a 0.1% tax on such transactions would send trades overseas. The real question, then, is if such a tax would send financial institutions to New York, Shanghai or Tokyo (especially given the ominous outlook in the Eurozone), would the loss of corporate gains tax, income tax, VAT from these big-spending workers etc offset the gains from the 'Robin Hood' tax in the long term? Almost certainly, yes it would. The Catholic Church's rhetoric may be faultlessly Christian, but its economics is weak.
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