Currency Transaction LevyCurrency Transaction Levy
To help close the funding gap for the Global Fund, Rep. Pete Stark (D-CA) has introduced the Investing in Our Future Act of 2010 (H.R.5783), which would raise revenue through a small currency transaction levy (CTL). This funding would then be directed to global health and climate change needs. Specifically, H.R.5783 would establish a tiny tax (0.005 percent) on all foreign currency exchange transactions by large-scale traders in the U.S. (and U.S. subsidiaries of foreign companies) that trade more than $10,000 in currencies per year. Dealing with climate change in developing countries is estimated to cost around $500 billion per year. An additional $251 billion is needed between now and 2015 (the target date to achieve the MDGs) to strengthen health systems in low-income countries. A levy on currency transactions in the U.S. would raise tens of billions of dollars each year — a significant step towards funding these urgent needs. 40 percent of the revenue would be dedicated for climate change. Another 40 percent would go towards multilateral global health mechanisms that meet stringent criteria; the Global Fund to Fight AIDS, TB and Malaria would qualify for funding. The final 20 percent would be dedicated to domestic child care needs. A CTL wouldn’t hit middle class investors, small-scale traders, travelers or people sending remittances home. The Investing in Our Future Act includes an exemption for investors and businesses that trade less than $10,000 in foreign currencies per year. In addition, the CTL would not negatively impact the economy and the currency market. Empirical evidence shows that a 0.005 percent is so small that it will have little effect on trading behavior, except to reduce harmful speculative trading. Current Cosponsors (as of December 2, 2010): seven cosponsors Rep Filner, Bob [CA-51] - 9/14/2010 Rep Grijalva, Raul M. [AZ-7] - 7/27/2010 Rep Jackson, Jesse L., Jr. [IL-2] - 7/27/2010 Rep Kucinich, Dennis J. [OH-10] - 7/30/2010 Rep Lee, Barbara [CA-9] - 7/27/2010 Rep Moore, Dennis [KS-3] - 9/14/2010 Rep Schakowsky, Janice D. [IL-9] - 9/22/2010
Background Information
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