Bill Gates, the billionaire philanthropist, has thrown his weight behind controversial proposals to impose a global financial transactions tax (FTT) that could raise up to $250 billion a year to fight poverty and tackle climate change.
A leaked memo from the Bill & Melinda Gates Foundation, the charity run by the software entrepreneur and his wife, said a report by Gates to the G20 leaders’ summit in Cannes would argue that an FTT could generate “substantial resources”.
Oxfam hailed the move. “The FTT ship has sailed and the richest man in the world is on board,” policy adviser Richard Gower said.
The note, written by the foundation’s policy head Geoff Lamb, said: “If a substantial part of the revenues could be allocated to development, this would be a useful addition to resources.”
The note said that a tax at a “small” level of 0.1% on equity transactions and 0.02% on bond deals would yield $48 billion across the G20 and $9 billion if confined to larger European economies.
“Some FTT proposals offer substantially larger estimates, in the $100-$250 billion range, especially if derivatives are included,” it read.
A spokeswoman for the foundation told Emerging Markets that the report was still in draft form, but would seek to find ways to secure the financing needed, from governments and the private sector, to achieve the UN’s millennium development goals.
“Innovation as a driving force for development will likely be a key aspect of the report,” she said. “It will talk about the potential for new revenue measures, some of which have been under active discussion in the G20.”
The FTT, which is often known as the “Robin Hood” tax after the medieval English folk hero who stole from the rich to give to the poor, is backed by France and Germany but opposed by the UK and the US.
It is understood that Gates’ report will note that the FTT is one option for some countries to raise financing for development. It will also probably look at the evidence of feasibility even without global adoption, which would circumvent the problem of a veto by the UK and US to a G20 scheme.
Policymakers from leading Bric economies signalled their support for the tax at a press briefing in Washington on Thursday. “We will certainly want to consider financial transaction taxes,” South African finance minister Pravin Gordhan said. Indian finance minister Pranab Mukherjee added: “The Tobin tax is not off the table.”
France, which holds the presidency of the G20, has made the FTT one its priorities ahead of the leaders’ summit in Cannes in November, while Germany has also signalled its support.
David Hillman, head of the campaign group Stamp Out Poverty, said: “With France and Germany now backing a FTT, there is momentum for such a tax as we approach the forthcoming G20 Summit.”
The proposals are linked to a commitment by ministers of the G20 group of developed and emerging economies to channel $100 billion a year to help developing countries adapt to global warming and develop low-carbon economies.