WASHINGTON, DC– After the 2008 financial crisis, Wall Street firms such as Wells Fargo and JP Morgan Chase were bailed out while ordinary Americans were left to suffer the consequences. Many lost jobs, homes and businesses in the recession that followed, passing on the weight of debt onward to the next generation. Now a movement, primarily mobilized by youth, is seeking compensation for the losses suffered at the hands of Wall Street bankers.
Student organizations visited the nation’s Capitol in March 21, 2016 to lobby for the Robin Hood Tax – a proposed tax on stock trades that has the potential to generate hundreds of billions of dollars in revenue. The Robin Hood tax is a sales tax on speculative Wall Street trading. A small tax, 50 cents per $100, on individual stock transactions, and even smaller assessments on bonds, derivatives and currencies, could raise hundreds of billions of dollars each year in the US alone. Specifically, $68 billion of the estimated $350 billion raised annually by the tax would fund higher education, making it tuition free.
Supporters of the tax claim that the money could provide funding for jobs to kickstart the economy and get America back on track. “The [tax] is a way of restructuring our economy,” said Giovanni D’Ambrosio, an undergraduate at UC Berkeley (Cal), who also works as a campus organizer for both the California Nurses Association (CNA)–a branch of National Nurses United (NNU)–and the Associated Students of the University of California (ASUC). “Students understand that the money exists to make higher ed more accessible, to find a cure for HIV/AIDS, to fund affordable housing, build a green infrastructure and more.”
The nurses’ union has publicly supported the bill and has remained one of most consistent national voices calling for the Robin Hood tax. Members of the CNA/NNU believe that the campaign is one of many necessary steps for students to achieve easier access to higher education. D’Ambrosio notes, however, that the role of colleges and universities is do more than just educate students; it is to provide jobs, housing, research to global and local communities. D’Ambrosio says that the Robin Hood tax functions to de-incentivize the exchange of risky debts and securities that was responsible for the 2008 crash, “It redistributes money from the people profiting off of student and institutional debts to fund our futures.”
In addition to student organizations and labor unions, many influential leaders have voiced their support of the campaign as well. Nobel Laureate and former Vice President Al Gore, Microsoft Founder Bill Gates, Minority Leader of the United States House of Representatives Nancy Pelosi, and American business investor and philanthropist, Warren Buffet, are some of many activist that have backed the bill in congress. In 2011 the Vatican even came out with a statement saying “such taxation would be very useful in promoting global development and sustainability according to the principles of social justice and solidarity”.
One aspect of the Robin Hood tax that appeals to the general public is that, according to the campaign, it won’t affect a majority of Americans, their personal savings, or everyday consumer activity, such as ATM usage. The 0.5 percent tax would be enforced on Wall Street transactions only. If implemented effectively it could raise enough money to fund higher education, housing, local governments, hospitals, essential research, community support,and sustainable energy. This makes the bill favorable amongst student activist groups around the nation. Alejandro Perez, 22, a member of Associated Students at UCSB said that student organizations are supporting the tax because it helps raise money for programs that serves disenfranchised communities, “It’ll provide more access to healthcare for all. This [tax] would also allow students to have a greater opportunity to pursue higher education and have health care available for low income families.”
The growing popularity of the Robin Hood tax comes at a time when a majority of Americans have voiced distrust in ‘big business’. Many have stated that they are dissatisfied with the size and influence of major corporations, as it has become obvious with the current U.S. presidential race. Contenders, such as Donald Trump and Bernie Sanders, have risen to popularity because their campaigns have challenged the status quo of wall street contributions. Trump recently released public records showing that he is the primary self-funder in his campaign, while Sanders’ fundraising efforts continue to break records, with about $75 million raised by small donors.
The legislation is not without its critics. Tim Worstall, a British contributor at Forbes and writer on finance, economics and public policy, wrote a piece in June of 2012 stating that “the tax does absolutely none of the things claimed for it, and does many other undesirable things as well.” He went on to address the article written for the Guardian by Rose Ann Demoro, leader of National Nurses United, about the benefits of the Robin Hood Tax. Worstall calls the plan ‘unrealistic’ and claims that taxing people does not inject money into the economy, but rather moves money around from one group of people to another. At one point exclaiming that it “just isn’t the same as increasing the amount of money or revenue in the economy as a whole.”
Nevertheless, critics have not deterred students from pushing for the enactment of the bill. College graduates face up to $1.3 trillion in student loan debt; these sums are often borrowed at rates that are set higher than mortgage and car loan rates. It was estimated that as of May 2015 a whopping 13.8 percent of 18-to 29-year-olds are out of work, a number that is more than double the national jobless rate of 5.4 percent. This crushing debt leaves many young adults struggling to maintain their bills, save long term, or invest money back into the economy. The Robin Hood tax campaign’s official website states that enacting the tax would fund an additional 9 million jobs and reduce unemployment by 60%. It remains to be seen whether or not this will be the case. For now, students and college graduates in the workforce see the Robin Hood tax as a potential light at the end of a deep and dark financial tunnel.
Photo: Housing Works