Everything you need to know

There certainly are, although some live up to the name more than others.

Basically, what we're after is a tax that raises billions of pounds annually from the financial sector, and which generates revenue to fight poverty worldwide and to tackle climate change.

Currently, the main proposals are:

• A Financial Transaction Tax (FTT)

The best of the lot. A tiny tax of about 0.05% on transactions like stocks, bonds, foreign currency and derivatives. Could raise £250 billion a year globally. Well-tested, cheap to implement and hard to avoid.

In fact, there are already lots of different transaction taxes implemented by many countries, including in the UK.  They all work on the same principle: taxing every transaction a very small amount.  We think there should be a lot more of them, particularly in areas not yet taxed, like currency transactions and derivatives. 

Importantly, transaction taxes are also good in that they would reduce the amount of the most risky transactions, the gambling which helped to trigger the financial crisis.

• A Bank Levy

Basically a flat-rate levy imposed on large financial institutions. Under huge pressure from their voters and from campaigners, a number of countries, including the UK, France and Germany have introduced a bank levy.  But at the rates they have used, these levies have raised not nearly enough and the revenue is not going to where it needs to go, the poor and the planet.

The levy introduced by the UK government in January 2011 misses the mark. It will only raise £2.5 billion annually, and doesn't ring fence a penny to help the people hit hardest by the financial crisis. It is also largely offset by the Government’s decision to reduce corporation tax meaning the actual amount of revenue collected will be markedly lower than £2.5 billion.

• The Financial Activities Tax (FAT)

Not exactly sexy-sounding, but it could raise billions through taxing excess profit and remuneration. It does have a fun acronym though, the FAT tax. Broadly equivalent to a VAT-style tax on the financial sector. It could raise £3.9 billion a year in the UK alone – and up to $93 billion across the OECD countries. The UK government has said it is open to implementing a FAT tax, but only together with a group of other countries, for example at EU level.

• 50% to fight poverty in the UK
• 25% to fight poverty in developing countries
• 25% to fight climate change at home and abroad.

Because it's responsible for a big part of the mess we're in.

Because it has an obligation to all of us to help clear it up.

Because it is the most profitable industry on earth, 26 times more profitable than the average business.

Because it is under taxed - so it can afford to do so. A tiny tax on the financial sector could generate £20 billion annually in the UK alone. That's enough to protect schools and hospitals. Enough to stop massive cuts across the public sector. Enough to transform lives around the world – and to deal with the new climate challenges our world is facing.

Because so far, the cost of the financial crisis to the UK economy, as calculated by the International Monetary Fund, is that UK government debt will be 40% higher. That 40% equates to £737 million pounds, or £28,000 pounds for every taxpayer in the country. Having to pay back that debt means cuts in vital services on which millions of people around the country rely.

Because according to the Bank of England, the fact that the government will not let the big banks go bust means that they effectively get a subsidy of £100 billion pounds from the UK tax payer each year. But the banks have already started to report record profits and pay themselves enormous bonuses once again. The 2010 bonus pot for the UK is 6 billion pounds, enough to pay the salaries of 340,000 nurses in the UK, or provide free healthcare for 250 million people in developing countries.

Because the IMF and many other financial commentators believe that the financial sector is under taxed, and has grown to become dangerously large and destabilising for the global economy, as we saw when the crisis hit in 2008. FSA Chairman Lord Turner has described a portion of the financial sector as ‘socially useless’.

Because it's time for the financial sector to make a greater contribution to the society it serves.

Absolutely, it accounts for around 8% of UK GDP. But this tax will have minimal impact on the majority of the financial sector. Certainly it will not affect retail banking, which includes savings and mortgages. It will instead introduce a micro-tax on short-term, casino-style trading which employs a small number of highly paid bankers in London, not the tens of thousands employed in high street financial services.

Studies show that an FTT on currency would at most shrink the market by 14%. This might sound significant but the number of transactions has been expanding so quickly in recent years that it would actually only take the market back to the levels of 2007.

International agreement would be great, but it's not vital.  Negotiations are continuing to reach a Europe-wide consensus. But in the meantime, individual countries can act alone.

The IMF has clearly stated that FTTs exist in all the major financial sectors already, without driving business away.  The best example of this is the UK, where we have a stamp duty of 0.5% on all share transactions.  The UK’s major competitors do not have this and there certainly is no global agreement, yet it is a successful FTT that raises around £3 billion pounds each year. It is designed so it can’t be avoided and London remains one of the biggest stock markets in the world.

The enormous currency markets – where speculators have been free to reap huge profits at the expense of wider society – would be a good place for unilateral action to start. It's a quick win that would immediately help generate income and prevent cuts.

No, because financial transaction taxes are targeted at casino banking operations they can easily be designed in a way that protects the investments of ordinary people and businesses. Just like other taxes, specific exemptions and punitive measures can be built in to protect, for example, lending to businesses or exchanging holiday money.

The IMF has studied who will end up paying transaction taxes, and has concluded that they would in all likelihood be ‘highly progressive’.  This means they would fall on the richest institutions and individuals in society, in a similar way to capital gains tax.  This is in complete contrast to VAT, which falls disproportionately on the poorest people.

The financial sector is highly competitive, which also makes it less likely that institutions will pass on the costs to customers because they will lose business to others who don’t.