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Commentary & Opinion
"Tiny Tax" on Wholesale Currency Transactions Could Help Reach MDGs, Finance Global Fund

September 23, 2010

In a Financial Times opinion piece, Rep. Pete Stark (D-Calif.) observes that "the global recession has made reaching [the Millennium Development Goals] and financing the Global Fund more difficult." According to Stark, "a new approach" is needed.

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"There is a solution. The world's largest financial institutions regularly buy and sell massive amounts of world currencies seeking to make quick profits. A tiny tax on these transactions, many of which are purely speculative, would raise billions of dollars to invest in key domestic and global priorities, such as fighting disease, climate change mitigation and adaptation, and protecting our children from poverty. It would also curtail some of the irresponsible behaviour that contributes to global economic instability and market volatility," writes Stark, who is the chairman of the House Ways and Means Health Subcommittee and the founder of a bank in California.

"Sixty nations, including France, Britain, and Japan, have publicly supported taxing currency transactions as a way to fund global development," according to Stark, who notes legislation he introduced in Congress to implement such a tax. "The imposition of a small tax is a minor inconvenience to a large financial institution, but is a major step toward meeting our commitments to our children and to impoverished communities around the world. ... This is an idea whose time has come," he writes (9/23).

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