Darling imposes 50% tax on Bankers bonuses...

If only they would do that in the US.

quote:

Originally posted by Mike Lacey:
Good man!

Chancellor Alistair Darling has imposed a 50 per cent tax on all banker bonuses over £25,000.


The Chancellor said it was only fair to impose this tax on banks who pay out more than £25,000 in individual bonuses because all UK banks have benefited from the taxpayers’ bailouts and fiscal measures.

The move was widely predicted today and is expected to raise £0.5bn. It is a one-off levy.

Darling also said he would put in place anti-avoidance measures to prevent banks from getting around the tax.

Set against a proposed £12bn cut in ahem 'public' services and £180bn of borrowing it's a tiny droplet in a sea of debt. What a mess.

So more bonuses at £24,999 then?

quote:

Originally posted by mikeeschman:
If only they would do that in the US.

They did, except it was a threatened 100% or 90% tax ... these were for AIG ...

I doubt a bonus of £24,999 would even register one some of these people's radar.

Over the last few days I have got sick of hearing that if the government does anything to try and curb this immoral squandering of money by the city, we will lose these top bankers to other countries. Well I for one would like to live in a country with a higher sense of morality than just what is most profitable.

If making money is all that is cared about, then perhaps the UK should consider becoming a centre for hard drugs distribution, or see if slavery might be profitable these days.

If these people who can see nothing other than money and greed leave the country, I am happy to tighten my belt a little knowing that I am part of an improved society.

As I understand it .... its the BANK that will be taxed 50% on bonus's paid out

Not sure but I think this means the bonus wedge gets a double hit
The bank gets hit 50% as it pays out
Then the recipients get hit 40% on higher rate personal income tax

I guess it will all become far less clear & much more confused once Darling goes on the box to explain it all

It doesn't affect me any more (either personally or professionally), but when he reduced VAT last year to 15% 'to help stimulate the economy', he immediately added a surcharge to alcohol duty to cancel the decrease 'to prevent the reduction in VAT encouraging binge-drinking' (or somesuch spurious nonsense).

Well, now VAT is due to return to 17.5% on January 1st (already a nightmare for all manner of retailers, especially those for whom January's normal gloom is saved by having a sale. And, incidentally, hardly fair on the hundreds of thousands of shopworkers for whom January 1st is already an arduous enough working day due to the previous evenings activities, albeit also alcohol-related).

The UK drinks industry has repeatedly asked Darling and his cronies at the Treasury to confirm that the duty surcharge will be cancelled at the same time as the VAT increase, which seems only to be expected.

With only a few weeks to go, it is imperative that - at least - companies know what is happening, but answer there has not been. Which means of course that he cannot contemplate giving any money back, and if not, alcohol taxes in total will have risen by a staggering extra 5% (of the purchase price) in the last twelve months, some 1000% above the rate of inflation.

Bunch of incompetent bastards.
Never have I been so glad that I moved to France.

No it won't mean more bonuses at £24999. It'll mean bigger bonuses to counteract the tax hit.

As for being happy to tighten one's belt and let the best bankers leave, that's just nonsense. Our banking system has to compete in a world market. If it loses the best brains (and 1000 of the top bankers at RBS have left already), then there is a very real chance of the UK losing its edge and the economy having to be revalued. once your £sterling drops in value, everything you pay for including any household goods, all white goods, a significant proportion of food, a significant proportion of your energy consumption (electricity, gas, and petrol - all of which are imported), your medications and therefore NHS bills, prescriptions etc., will go up heavily in price (about 30%). You wouldn't be tightening your belt slightly - you'd be tightening it very significantly. The main concern is that if this did happen we could end up in another negative equity bang like we had in the nineties, only much longer lived.

We need to face up to the fact we need these guys, they need to paid at the going rate or better to bring in the business in order to pay off the massive debts we face. If we don't do this, the debts will simply stay where they are, the rest of the world will move on and we will be left behnid facing a mountain of debt with no way to repay it. the only question would be whether confidence gets smashed so hard that we end up having huge inflation like so many 3rd world countries.

Whilst I wouldn't dispute that paying the highest amounts to attract the best people is the best plan for building the highest quality à la premiership football team, where are the 1000s of other banking jobs that the UK's bankers can apply for to escape the UK's punitive tax regime?

Which country has banking jobs to spare at the moment, and why don't we all move there?

I'm really not sure the argument holds up.

quote:

The problem here is that these children of Thatcher has caused this country to lose pretty much all it's manufacturing base, it's why all the other major economies are reporting to be out of 'their' recession, they have manufacturing industries. Our (UK) whole economy seems to be based around 'financial services' and making money, that being in such a mess, there's little else to fall back on. I wish nothing but the worst on 'our' bankers, estate agents, etc. they have ruined this country, but they will make sure that their feathered nests remain unruffled.

You have hit the nail squarely on the head!

Graeme

Hear, hear Graeme.

Nobody in the whole world is worth that amount of money be they banker, ballerina, ball basher or bass player.

steve

Graeme

quote:

The problem here is that these children of Thatcher has caused this country to lose pretty much all it's manufacturing base, it's why all the other major economies are reporting to be out of 'their' recession, they have manufacturing industries.

Are you suggesting that we go back the Union led UK manufacturing world of the 60's and early 70's? Do you really think that this would make the UK competitive vs nearshore or offshore manufacturing countries? We could of course create the "old world" protectionist economies and become an isolated island economy. I don't know..it might work...it might not...but I think that times have moved on and we are in a new world economy and a new world order so what is the solution? More taxes to support an antiquated manufacturing base or what???

Regards

Jim

If the bankers - the merchant bankers - all left, then we can heave a sigh of relief, get back to manufacturing, because the GBP Sterling will stand at a competitive level, without being overvalued as the result of the financial bubble that has accompanied the Merchant Bankers chancing it with the national wealth [and loosing a great deal of it - they are a complete load of failures who in any case, as a class, do not diserve bonuses full stop], and the majority of decent hard working people can get on once again with the usual activity of doing a decent day's work for a respectable wage that allows the normal individual to carry in a decent style.

The giving of bonuses should be restricted in this respect. The value of the bonus may not be larger than 15 per cent of the average of the last three years salary of the person concerned.

If this led to the City of London [the financial quarter] moving to Frankfurt, then so much the better. The chancers could get bailed out by the Germans, and not us.

As in Iceland the Merchant Banking sector in the UK has grown too large in comparison to the productive element of of the economy or indeed the total wealth of the country.

It has to shrink, and its shrinkage is to be welcomed.

ATB from George

quote:

Originally posted by Exiled Highlander:
Graeme

quote:

The problem here is that these children of Thatcher has caused this country to lose pretty much all it's manufacturing base, it's why all the other major economies are reporting to be out of 'their' recession, they have manufacturing industries.

Are you suggesting that we go back the Union led UK manufacturing world of the 60's and early 70's? Do you really think that this would make the UK competitive vs nearshore or offshore manufacturing countries? We could of course create the "old world" protectionist economies and become an isolated island economy. I don't know..it might work...it might not...but I think that times have moved on and we are in a new world economy and a new world order so what is the solution? More taxes to support an antiquated manufacturing base or what???

Regards

Jim

No, It's about balance and a balanced economy, such as Germany has with it's mix of commerce and skilled manufacturing (optics for example).

Graeme

Ahh! To go back to the good old days when we were manufacturers...

Alas, the world's moved on and we're now in a global market, with cheaper manufacturing available elsewhere which companies have to use if they're to remain competitive.

Our recent wealth has been built on banking and for us to recover we need to relay on this sector, much as we might dislike the idea. There's no tangible product we can understand, yet finance is essential for the world economy. So let's get rid of the very people who have the potential to help us recover & let other nations
make the money instead?

I'm with Jim on this.

It's quite simple really. Give the Bankers their bonuses, but pay it in share option that cannot be cashed in for say three years, thus cutting short term market speculation as a means of inflating current bonus structure.
Yes of course this would have to include a reigning in of the obsene level of bonus payments currently being abused by the financial fraternity. Robert Peston mentions in one of his books the 100 or so 'Bankers' at a City firm earning over 100M/Year (yes you did read that correctly)
Add to this the unethical habit of senior bankers with one firm being executive directors of another bank, true, look them up (unethical because it is impossible for these executive directors to carry out a watchdog function when they are carving out the same dodgy schemes at their own firm with the conivance of their executive directors!)

quote:

Are you suggesting that we go back the Union led UK manufacturing world of the 60's and early 70's? Do you really think that this would make the UK competitive vs nearshore or offshore manufacturing countries?

No Jim, not Union led, however the repeal of Thatchers Anti Union laws, that are contrary to European law would be a start!
It is interesting that the most draconian measures to curb trade unions in This country have made us SO competative that we have not yet emerged from a recession that some of our European competitors left over a (financial)quarter ago and the most Trade Unionised of them (Denmark) left almost 6 months ago! I did'nt see Germany and France following the Trade Union busting measures of Thatcher! Perhaps a greater understanding in those countries of the duty of government to ALL the people and not a small Elite!
Thatcher crushed the Trade Unions and this allowed her to squander Britains Assets in Dole payments to a whole generation as a means of keeping the pound healthy and the market prosperus.

In another thread George said he longs for a socialist government to replace this shower. I would go further and say I wish that we could try socialism. It is that one political 'dogma' that has never been tried in this country, as successive Labour and Tory governments have been so enamoured by the false Prophet Milton Friedman, an economist who, IMHO should be pilloried for the lies of Free Market Capitalism he expoused !
A man who's followers at the World Bank and the IMF have done more to maintain a first and third world a vain attempt to rally round the Battle Cry of the morally corrupt SO Called Free Market.
The World Trade talks are a means of making sure that the first World closed shop of protectionism exists and that a third world is kept firmly in it's place for the exploitation of 'Western Market Forces'!
... climbs down from soap box panting heavily...

....Climbing back on Soapbox.
Oh, and banks would NOT be Sold off or released from the public shareholding until we have extracted EVERY pennie we put in. PLUS a SIGNIFICANT BONUS !
That would of course be after the banks have FILLED EVERY PENSION BLACK HOLE WE CURRENTLY HAVE...simple really.
Down I get...

Dunno why the bansk should be expected to pay for other peoples pensions.

I am also bemused by those who see no problem with the profits going into private hands, but the losses being borne by the public.
Make them squeel; if the top bankers at RBS or whoever threaten to resign over this, remind them who kept them in a job after they nearly crippled UK PLC.

The trouble with picking on scapegoats is that you never really know whether your choice of goat is correct.

I think that even the banks admit that having to be bailed out to the tune of tensor hundreds of billions of our tax pounds is a bit of a clue that they might just possibly have got it wrong.

Privatise the profits, socialise the losses? Nope.

Anti-avoidance measures - at least he has a sense of humour.

Thatcher - she was right to tackle the Unions, but wrong to be so easy on Management - both ruined manufacturing.

Bankers, bankers, bankers - a nice diversion from the Government, the Government's regulators, other lenders, ratings companies, and reckless borrowers .

Cheers,
OW

Firstly, we all need to use this opportunity to reset our expectations of salary, especially those who earn obscene sums of money, be it Hockey Players, Footballers, Baseball players, Bankers, Actors, CEO's, etc...

With so much going to so few the separation of society by wealth is a real worry. The middle class is a dying breed, a few are joining the rich, but most are becoming a new class, the working poor.

Upper middle class and professionals are now relegated to middle class and are often one pay-cheque away from being poor.

I recently looked up the history of the new GM chairman Ed Whitacre Jr. he used to be CEO of AT&T he received $14M in 2004, $17M in 2005, $61M in 2006 and in 2007 when he retired he became eligible for a $158M payout.

BTW he still has access to the AT&T jet (only 10hrs a month), he consults with AT&T for which he gets paid $1M a year. He also retains a car, use of staff, security, club memberships and they pay his taxes except for the plane use.

Nice gig if you can get it !

quote:

Dunno why the bansk should be expected to pay for other peoples pensions.

AND

quote:

Make them squeel; if the top bankers at RBS or whoever threaten to resign over this, remind them who kept them in a job after they nearly crippled UK PLC.

Mike.
It is precisely because UK PLC owns 70 + % of RBS that as the major shareholder we dictate the interests of the bank. Successive governments are resposible for the pensions black hole.
Gordon Brown has been taking £5 Billion/year out of the pension pot for almost ten years. Thatcher (yes her again) allowed buisinesses to use their pension pots as a form of cheap recapitalisation, all the while everyone forgot the old adage "shares can go down as well as up".
So, to conclude, the major shareholders of The high street banks will dictate the use of the banks profits. I humbly suggest that UK PLC be paid back in full along with comensurate lending charges and interest. After this the future profits will be used to re-fund the pension pots of individuals of UK PLC (us) to rectify the damage done in our name by successive governments, then... who knows, let's see, for instance what the NHS needs at that point.
We own it, we decide what we spend the (future)profit on.
What I do not wish to see is lobbying by Bankers for the relinquishing of OUR share to some Corporate sell off in the best of interests of Tesco/ Virgin Finance etc. to have a face on the high street. The first Government to say this(cue George Osborne) is in our best interest, is lying and has been got at!

Apart from agreeing with many on here I would like to point out that the reason so many have had to overborrow and live on credit in recent years is because of too many overpaid city types in the South East. I once walked into an estate agent in Midhurst looking for family homes up to £400k, I was informed they had nothing on the books 'that cheap' - when I enquired who was able to buy the array of glorious homes adorning their windows they mentioned they'd just that morning sold a £1.2m property to a cash buyer (banker) spending some of that year's bonus.

If these people weren't remunerated so vastly, property prices around here would be far more affordable for the likes of me so frankly if they all bugger off to Frankfurt I don't give a stuff. And as for it being difficult to replace their expertise I'm afraid I don't buy it - it's all glorified bookmaking. It takes 7 years to train a Doctor, 2-3 years to train a pilot, 3 yrs to train an engineer and about a week to train someone to pick up a phone and buy and sell a few shares...

They're hardly rocket scientists these people are they? Half of them don't even have a thorough grounding in economics.

Jonathan

Jonathan,

And possibly the World and his Wife climbing aboard the buy-to-let bandwagon, and those jumping the queue with mortgages at crazy multiples, people allowed to buy second 'homes' ... Introduce a legal minimum deposit of 20% to 25%, a maximum multiple of 3x, make it much more expensive to own a second 'home'/buy-to-let - make it impossible to do so in some areas, and throw in rent control. If houses are to be seen as investments and not homes, stay as we are, but reduce the level of support to that given to investors.

Cheers,
OW