Apr 26th 2012, 16:30 by A.P. | LONDON
IN THE summer of 1991, an appalling ballad by Bryan Adams called ?Everything I Do I Do it For You? topped the charts for weeks. The song was the soundtrack to an equally dreadful film called "Robin Hood: Prince of Thieves".? A radio show around that time had a lovely story about a bride who asked the organist at the church to play the song from Robin Hood as she came down the aisle. But instead of the romantic dirge, she found herself getting married to the jauntier strains of ?Robin Hood, Robin Hood, riding through the glen?.
The man in green tights is being subverted again. The Robin Hood tax, also known as the Tobin tax or the financial transactions tax (FTT), has been inching forward since a legislative proposal by the European Commission in 2011. But the idea may well gather steam following the second round of the French presidential election. Both candidates are in favour of the tax, and of pushing ahead with a unilateral French version, if need be. In the current drive to emphasise growth as well as austerity it is all too easy to imagine a tax of financial transactions (steal from the rich) being adopted by euro-zone governments as a way of funding additional stimulus (give to the poor).
Taxing finance is not barmy in itself. Governments need to get their own houses in order and the industry?s implicit government subsidy ought to be recognised via offsetting levies (as is already the case). Defenders of the tax point out that Britain already has a stamp duty on share transactions and that hasn't exactly crippled the City. But the rationale for and likely implementation of a financial transaction tax are nuts.
First the rationale. This is a Robin Hood tax that would steal from the poorer, as financial institutions pass on costs to savers and investors. The commission says optimistically that costs do not necessarily get passed on to the end-consumer, and that one of the (unjustified) reasons for the tax is to address high-frequency traders, which play with their own capital. But the?lesson?of Britain?s stamp duty is that it is avoided by savvier traders, paid by less sophisticated savers. ?The only people who pay it are low-velocity, long-duration ?virtuous? investors?, says one fund manager. High-frequency traders who make markets can easily pass on costs by widening bid-ask spreads.
Implementation is nuttier still. Many European policymakers want to push ahead with a transactions tax even if others, like America, do not. Britain is an obvious (but not the only) exception: it wants a global tax, or nothing at all, for fear that transactions will move elsewhere. So the euro zone, or even just parts of it, may decide to go it alone. French bankers are understandably unimpressed as they contemplate the prospect of deals moving to London. Some policy bigwigs are also unpersuaded. Speaking to the European Parliament this week, Mario Draghi, the ECB?s president, pointed out that it is difficult enough to lure foreign investors into euro-zone financial instruments at the moment. ?We want them to come back. One wonders if an FTT is the best way to attract them back to euro area.? Wouldn?t you have skirted Sherwood Forest if you had a choice?
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