June 19, 2012 -- When it comes to tax reform heroes, Warren Buffett, that self-made billionaire who pushes for higher taxes on millionaires, is so yesterday. The new champion of the progressive tax movement is a bit more mythical, a touch less law-abiding and frightfully more fashionable.
Robin Hood, the fictional outlaw famous for stealing from the rich to give to the poor, has emerged as the face of a new tax movement, one that calls for a 50 cent sales tax on every $100 traded on Wall Street.
"We are taking back from the wealthy what they have taken from our communities," said Matt Kavanagh, the director of U.S. advocacy at Health Gap, an AIDS-prevention group that is part of the coalition of progressive groups pushing for the Robin Hood tax.
Using the star power of actor Mark Ruffalo, Rage Against the Machine's Tom Morello and Coldplay's Chris Martin, the Robin Hood tax movement kicked off a nationwide protest outside JP Morgan offices in 15 cities on Tuesday with a web video.
The nearly five-minute spot promotes the tax as a "small change for big banks, big change for us" and urges supporters to draw a Robin Hood hat and mask onto the image of George Washington on the $1 dollar bill as a symbol of the movement.
"Revolution happens one buck at a time," Morello says in the video, holding up his marked-up bill as Coldplay's "Viva la Vida" drums in the background.
Advocates for the tax claim the one-half of 1 percent tax on financial transactions would bring in up to $350 billion in federal revenue each year, which could then be used to fund programs in such areas as education, health care, HIV/AIDS prevention and climate change.
"My taxes have been paying for Wall Street to be bailed out. It's about time they start contributing to my community," said Joseph Cassidy, an emergency room nurse who sported a green Robin Hood style hat while protesting outside JP Morgan's Washington, D.C., offices Tuesday.
As the group of about 40 Robin Hood hat-clad protesters chanted outside the JP Morgan offices, the bank's CEO Jamie Dimon testified before Congress about the company's multi-billion-dollar trade loss announced last month.
Despite the $2 billion to $5 billion loss, Dimon said the company would post a profit this quarter, a fact that Kavanagh said proved that Wall Street titans like JP Morgan could afford the Robin Hood tax.
"If JP Morgan can lose $2 billion and 'Whoops, sorry!' we know there is money there for our communities," Kavanagh said while protesting outside the bank's D.C. offices.
While the Robin Hood tax may be based on a fairy tale figure, the idea of a tax on financial transactions may not be a fiction for long. The European Union is considering this type of tax, but with a lower rate of 10 cents for every $100 traded.
And U.S. Sen. Tom Harkin, D-Iowa, Rep. Peter DeFazio, D-Ore., introduced a financial transaction tax bill in Congress last November that would collect 3 cents on every $100 traded.
"This could be in the cards in the future," said Steve Rosenthal, a tax lawyer and visiting fellow at the Tax Policy Center.
But Rosenthal warned if the U.S. instituted the tax and the EU did not, it "could cripple the U.S. financial services industry" because bankers would shift their transactions overseas.
"The only way this type of tax on financial trades would be effective is if it was implemented on a global scale," Rosenthal said. "Otherwise any country that does it on their won would just lose its financial transaction center."
That type of corporate exodus did not happen, though, when Britian instituted a scaled-down version of the Robin Hood tax the 1980s, Kavanagh said. The UK's stamp tax imposes a one-half of one percent tax only on stock sales, leaving other types of financial transactions such as selling bonds and derivatives untaxed.
"The bottom line is companies aren't locating themselves in New York because of the scenery," Kavanagh said. "There are massive benefits to being based in the U.S. and those don't go away when you implement a tiny tax."