Bill Gates, who remains the world’s richest American [net worth: $59bn], has come out in favour of a tax on financial transactions (now more commonly known as the Robin Hood Tax) as a way of boosting spending on aid and international development.
The Microsoft founder was asked to look into the issue by Nicolas Sarkozy ahead of this autumn’s meeting of the G20 in Cannes. Now, in advance of today’s meeting G20 Finance and Development Ministers in Washington DC, a summary of his draft proposals has been leaked. It suggests that Gates will support a version of the tax and that he believes it could raise hundreds of billions of pounds a year. Here’s the key extract:
If G20 members or some other set of countries (e.g., within the EU), can agree on the outlines of an FTT, Bill’s report is likely to argue, it could generate substantial resources. For example, some modeling suggests that even a small tax of 10 bp on equities and 2 bp on bonds would yield about $48 billion on a G20-wide basis, or $9 billion if confined to larger European economies. Some FTT proposals offer substantially larger estimates, in the $100-250bn range, especially if derivatives are included.
It’s an extraordinary boost for the Robin Hood Campaign, although the UK government, which opposes a financial transaction tax, is lobbying hard against the proposals.
The story is also significant for another reason. Some have criticised Gates’s brand of philanthrocapitalism on the grounds that it allows unaccountable foundations, rather than elected governments, to determine social priorities (all charitable donations are tax-exempt). But today’s news shows that Gates still believes in the power of taxation.