HR 1579 “Robin Hood” Tax on Financial Trading

What is The Inclusive Prosperity Act? Why should we support it?
HR 1579, “The Inclusive Prosperity Act” proposed by Rep. Keith Ellison (D-MN) in 2013, creates a tax on the trading of financial assets (a Financial Transaction Tax, or FTT), often called a “Robin Hood” tax. The bill focuses on how the global financial crisis was created by an out-of-control financial sector that crashed the U.S. and world economies.

The real strength of the bill, however, is the allocation of the revenues raised--not for deficit reduction but instead for health care, investment in education, reduction of student debt, environmental protection, job creation and the development of clean energy. In short, the bill is designed to change the discussion from cuts and austerity to strengthening financial security and expanding opportunity to working people. It is not a tax on the people but a tax for the people.

How would the Robin Hood Tax work? How much money could it raise?
As proposed, the Robin Hood Tax would be a small sales tax charged on all trading in stocks, currencies, and debt instruments (such as bonds) as well as derivatives (futures and options) based on these products. The amount of the tax is tiny. On stocks the proposed rate is 0.5%, or $1 on every$200 of stocks traded; 0.10% on trading of debt (bonds, notes, etc.), and 0.005% on derivatives and currency trading. The amount of revenue raised would be substantial, however, estimated by the bill’s sponsor to be around $350 billion annually. With that revenue we would have the resources to rebuild our economy so that it serves all the people, not just the few.

Who would pay the tax?
Anyone who traded stocks, currencies or debt instruments would pay the tax. Most of the income from this tax would come from institutions and individuals who trade frequently. These are big banks, hedge funds and brokers as well as wealthy individuals who own the largest amount of stock. You would not pay the tax if you deposited money in your bank account or exchanged U.S. dollars for Canadian dollars because you were traveling to Canada. These are not trades.

I have some money in a 401(k), and some of it is invested in stocks. Would I pay the FTT?
Perhaps, but it depends on your annual income. The Act has an exemption from the tax for individuals with income below $50,000 and married people filing joint tax returns with incomes below $75,000. Thus, most people in the U.S. would not be subject to the tax. Of course, any payment of tax occurs only when stock, bonds, etc. are bought. In this respect it is very much like a small sales tax that you pay when you buy furniture or groceries. For long term investors holding these assets for retirement or to pay for a child’s college, the tax would have very little impact. In fact, the tax is smaller than the commissions often charged by brokerage firms to execute orders or the fees normally charged by mutual fund managers to handle your investments.

Would an FTT make our markets less competitive by discouraging trading?
Most of the trading that takes place in stock, currency and debt markets is unrelated to any productive activity in the real economy. For example, the total value of all the new issues of stock that companies bring to market to raise capital represents less than one week of trading activity on U.S. stock exchanges. Similarly, the value of currency trades is more than 25 times the actual value of our foreign trade. Even if trading were to decline substantially, our financial markets would remain liquid and attractive to investors from both the U.S. and abroad.

Have other countries experimented with an FTT so that we can see how it would work?
Yes, Britain has had a stamp tax on stock trading for many years. It has provided needed government revenue and has not hampered the growth of the British stock market, which is now the second largest in the world. In addition, Switzerland, Hong Kong, Singapore and other countries have FTTs. In January 2013, 11 members of the European Union voted to implement an FTT. These include Germany, France, Spain, Italy, Belgium and 5 others.

Are there other groups supporting the proposal for a Robin Hood tax?
Yes. Several unions have already endorsed HR 1579 (or its 2012 version), including National Nurses United, the UAW, USW, IAM, UNITE HERE. Friends of the Earth also supports the bill. In addition, the leading Catholic organizations of nuns and priests have endorsed the Act. The Congressional Progressive Caucus has proposed a budget with a smaller FTT, the Defazio-Harkin version.
All this sounds good. Are there any other benefits from an FTT?
Yes. An economy heavily dependent on financial activities serves only the few. Thus an important additional benefit of the Robin Hood tax would be a reduction in the role of Wall Street in our economy. Further, the high incomes that are generated by the socially useless activity of trading for the sake of trading distort the career choices of many of our brightest young people who go into finance rather than becoming doctors, engineers or teachers. Thus, as noted above, the Act proposes to use the revenues as the basis for changing our economy from one dominated by the wants and desires of the few to one driven by the needs of the many.

Where can I find more information?

What Is DSA? Training Call

May 30, 2017
· 57 rsvps

If you're a new DSAer, have been on a new member call, but still have questions about DSA's core values/strategy/core work and how to express these ideas in an accessible way to the media, as well as to friends, family and others who might be interested in joining DSA, this call is for you. 

We will talk through the basics of DSA's political orientation and strategy for moving toward democratic socialism, and also have call participants practice discussing these issues with each other. By the end of the call you should feel much more comfortable thinking about and expressing what DSA does and what makes our organization/strategy unique. 8 pm ET; 7 pm CT; 6 pm MT; 5 pm PT. 70 minutes.

Film Discussion: Rosa [Luxemburg]

May 31, 2017
· 95 rsvps

Join DSA member Jason Schulman to discuss the film Rosa, directed by feminist filmmaker Margarethe von Trotta. View it here at no cost before the discussion. Marxist theorist and economist Rosa Luxemburg (1871-1919) played a key role in German socialist politics. Jason edited Rosa Luxemburg: Her Life and Legacy and has a chapter in Rosa Remix. 9 ET/8 CT/7 MT/6 PT.

Film Discussion: The Free State of Jones

June 11, 2017
· 27 rsvps

Join Victoria Bynum, Distinguished Professor Emeritus of History, Texas State University, San Marcos, to discuss The Free State of Jones. STX Entertainment bought the film rights to Bynum's book of the same title. She also served as a consultant and appears in a cameo scene. What was the Free State of Jones? During the Civil War, an armed band of deserters led by Newt Knight, a non-slaveholding white farmer, took to the swamps of southeastern Mississippi and battled against the Confederacy in an uprising popularly known as “The Free State of Jones.” Joining Newt in this rebellion was Rachel, a slave. From their relationship, there developed a controversial mixed-race community that endured long after the Civil War had ended. View the film here for $6 before the discussion. 8 ET/7 CT/6 MT/5 PT.

Introduction to Democratic Socialism

June 13, 2017
· 14 rsvps

Join Bill Barclay, Chicago DSA co-chair, and Peg Strobel, National Political Committee and Feminist Working Group co-chair, on this webinar for an overview of what we in Democratic Socialists of America mean when we talk about "socialism," "capitalism" and the goals of the socialist movement. 9:30 PM ET; 8:30 PM CT; 7:30 PM MT; 6:30 PM PT.

  1. This webinar is free for any DSA member in good standing.
  2. You need a computer with good internet access.
  3. Your computer must have headphones (preferred) or speakers; you can speak thru a mic or use chat to "speak".
  4. If you have questions, contact Bill Barclay,
  5. If you have technical questions, contact Tony Schmitt,, 608-355-6568.

Film Discussion: Pride

September 10, 2017
· 7 rsvps

Join DSA members Eric Brasure and Brendan Hamill to discuss the British film Pride (2014). It’s 1984, British coal miners are on strike, and a group of gays and lesbians in London bring the queer community together to support the miners in their fight. Based on the true story of Lesbians and Gays Support the Miners. The film is available for rent on YouTube, Amazon, and iTunes. 8 ET/7 CT/6 MT/5 PT.

Film Discussion: Union Maids

September 24, 2017
· 5 rsvps


Join DSA member and labor historian Susan Hirsch in discussing Union Maids (1976). Nominated for an Academy Award, this documentary follows three Chicago labor organizers (Kate Hyndman, Stella Nowicki, and Sylvia Woods) active beginning in the 1930s. The filmmakers were members of the New American Movement (a precursor of DSA), and the late Vicki Starr (aka Stella Nowicki) was a longtime member of Chicago DSA and the Chicago Women's Liberation Union. It’s available free on YouTube, though sound quality is poor. 8ET/7CT/6MT/5PT.