Is a Robin Hood Tax Coming to a Bank Near You?

Last week, the French Parliament voted for Nicolas Sarkozy’s “Robin Hood tax.” The tax will be “on high-finance transactions and currency trades by banks and institutions.” Sarkozy hopes it will lead to France becoming the first European Union country to adopt such a levy. He expects other European nations to follow.

There are advocates of the so-called Robin Hood tax in the US. Bill Gates is one of them. Even the Vatican has gotten behind the new scheme. They want to use the tax to “help the poor.” Remember the fines the cigarette companies paid that were supposed to help people kick the habit? It never happened. The money was used to pay for budget shortfalls so the states could go on spending.

Trillions of dollars have been taken from income earners over the years to help the poor. Now we have more poor people dependent on the government for income than we’ve ever had. These new fees won’t cost the banks anything. Like an increase in the cost of electricity, rent, and salaries, the added fees will be added to the expense ledger and will be paid by all who do business with the banks. Those calling for the new tax are only asking for a tax on themselves.

Critics of the banking system around the world are directing their rage at the wrong villain. Thomas Woods, Jr., senior fellow of the Ludwig von Mises Institute and New York Times bestselling author of The Politically Incorrect Guide to American History, reveals the real problem:

The last thing we need is a larger, more centralized version of what we have now. Our problem isn’t greedy people or bad personnel. Every society and every period of world history have had those. The problem is the system itself.

An excellent moral case can be made for a genuinely free economy, one not subject to the cronyism and manipulation at the heart of the present system. The chief obstacle in the way of such an outcome is the central bank, the anomalous central planning agency at the heart of a free economy. We’ve been assured that the central bank has found a shortcut to prosperity by managing the economy with its highly touted macro tools and by second-guessing the interest rates to which the free interactions of individuals give rise. The result has been bubble after bubble and – contrary to popular belief – far more banking and currency crises and overall instability than was ever seen in the oft-misunderstood era that preceded the age of central banking.

Not only don’t Sarkozy, Bill Gates, and the Vatican know what’s really wrong with banking (or they do know and are benefiting from it), they don’t know much about Robin Hood. The Robin Hood TV-show ballad still rings in my head:

Robin Hood! Robin Hood! Riding through the glen!
Robin Hood! Robin Hood! With his band of men!
Feared by the bad! Loved by the good!
Robin Hood! Robin Hood! Robin Hood!

Who were the “bad” that feared Robin and his Merry Men? It wasn’t the capitalists; it was the government officials and their cronies. “They vowed to help the people of the king!” Robin Hood took back from the political powers of the day (and in some traditions of the story from corrupt clergymen) what had been taken from the people by the government. In terms of popular culture’s understanding of Robin Hood, mostly through the Robin Hood movies and TV series, the archer in green tights was against the political tyrants of his day, most notably Prince John, Sir Guy of Gisbourne, and the sheriffs who extracted taxes from the common people to pay the king so he and his cronies could retain their political positions.

If a Robin Hood movie were being cast today, Barack Obama would be cast as Prince John. The producers would have their pick of securing a supporting cast for Prince John’s court of governmental thieves by any number of Congressmen and Senators from both major political parties.

Of course, it’s not just Obama and the Democrats. Too many Republicans use the system for personal benefit and the expense of the people who they claim to represent.