Taxing the Sheriff of Nottingham will harm the poor

Letter in The Daily Telegraph on proposals to impose a "Robin Hood" tax on banks

SIR – The "Robin Hood Tax" proposed by several celebrities (Comment, February 10) is not a "tiny tax on banks to help the poor".

First, it is not tiny. The headline rate is only part of the cost. There are the administrative and IT costs of collecting it, paying it and policing compliance. There are economic costs, too, as people switch into less productive investments to avoid it, and as finance moves to other countries that do not impose it.

Secondly, it is not a tax on banks. They will simply pass the cost on to their customers – everyone with a bank account, an insurance policy, a mortgage, a loan, or pension savings. It is we, the public, who will pay this new stealth tax.

Thirdly, it will not help the poor. The tax revenue will be administered by governments, so politics, not economic sense, will determine where it goes.

Poor countries need access to affordable capital to fuel their development. This tax will raise the cost of capital and make capital markets less efficient, starving poorer countries of that fuel.

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