Gates pitches a Financial Transactions Tax to raise revenue to solve social problems

Bill Gates is proposing to the G20 nations the concept of a financial transactions tax as a way to raise revenue and discourage financial speculation.

The proceeds from a FTT could be used to help the disadvantaged. This isn’t just an errant, off-the-cuff musing of the Microsoft founder, but the result of a study by the Bill & Melinda Gates Foundation commissioned by the G20 nations to examine ways of helping poor nations address an estimated $80-$100 billion funding gap they face in tackling climate change.

Gates thinks conditions are ripe for a financial transactions tax to work and that it will generate “huge” revenues to devote to solving social problems. Gates deserves credit as a philanthropist looking at the sources and structure of public-sector revenue generation.

Critics will undoubtedly associate him with Fidel Castro and Hugo Chavez, both of whom also support the Tobin Tax, though it would be hard to imagine that one of the richest people ever is actually a closet socialist.

The as-yet unreleased report apparently concludes that “even a small tax of 10 basis points (0.10 percent) on equities and two basis points (0.02 percent) on bonds would raise about $48 billion among the G20 member states, or $9 billion if adopted only by larger European countries.”

Unfortunately, it appears that within the G20, only France and Germany support the idea.

-Rick Cohen

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