Bankers fury at UK 50% bonus supertax

[Andy Nguyen]

Official bank payroll tax HM Revenue Customs:Bank Payroll Tax

Article on NYT Darling Slaps Tax on Bank Bonuses - NYTimes.com

Article on Bloomberg

Dec. 9 (Bloomberg) -- Chancellor of the Exchequer Alistair Darling imposed a 50 percent levy on banker bonuses and said he will increase income taxes after elections next year as the worst recession on record drives up U.K. government borrowing.

The Treasury expects to raise 550 million pounds ($896 million) targeting payouts at all banks operating in the U.K. from today and another 3 billion pounds from incomes earned after April 2011. Borrowing will rise by 4.6 billion pounds to 611 billion pounds in the four years through March 2013.

The British Bankers’ Association Chief Executive Angela Knight said foreign banks that reward staff with contractually agreed bonuses will be “hardest hit” and may look at London as “a significantly less attractive place.” Richard Lambert, director general of the Confederation of British Industry, said Darling’s “jobs tax” was a “serious mistake.”

 

[wildcolor]

Heard the news from Brown a while ago. Now it seems that finally the new policy comes up. Really in a bad time to hunt for jobs now. Even if you get a job, they cut the bonuses down.

"imposed a 50 percent levy on banker bonuses"
A quick question: does anyone know what the original percentage they levy on the the bonuses was?

 

[bigbadwolf]

Communists. They should let the rich get richer and the poor, er, eat cake.

 

[Andy Nguyen]

How would one still argue that London is the financial capital of the world? If people are running out of the country, it would be hard for recruiters to sell the City to potential employees.

 

[bigbadwolf]

How would one still argue that London is the financial capital of the world? If people are running out of the country, it would be hard for recruiters to sell the City to potential employees.

Is there somewhere for large numbers to run to? China, Hong Kong, Singapore, maybe? Otherwise most of them will have to stay put. The government would rather do nothing at all but its fiscal position is hopeless and popular outrage is simmering.

 

[bigbadwolf]

France has done the same, and it may be adopted across the EU.

An interesting piece in today's FT:

http://blogs.ft.com/emailafriend?id=5236&blogid=9

He (GE's Immelt) added that it was wrong for the US economy to have “tilted toward the quicker profits of financial services” and away from manufacturing industry and research investment.

Taken together, the implication of these points is clear. There is something distorted about an economy in which extremely high rewards go to relatively few people in financial services.

 

[IlyaKEightSix]

Oh please. Manufacturing and research waah waah waah.

No.

Supply and demand. If there's a demand for financial industry employees and the pay is correct, they will come. In the meantime, in regards to manufacturing...this road has been beaten to death already. Two arms are two arms. Just because American manufacturing employees demand better standards of living than the Chinese ones doesn't mean I have to subsidize them through my purchase of products of similar quality but at far greater cost, with the difference being the standards of living of the producer.

Because guess what? I can care less about Joe American the Factory Worker's lifestyle in relation to Joe Chinaman the Factory Worker. When everyone in the whole labor chain in first-world manufacturing will realize that most people don't really care if something is made in the USA or China or anywhere else when someone goes to buy product, they might just get their head out of their rear and actually make something worth buying.

In the meantime though, on Black Friday, I ordered a Lenovo Y550, as opposed to an HP, Dell, or Gateway. Why?

Pricing.

 

[Adam]

Two arms are two arms. Just because American manufacturing employees demand better standards of living than the Chinese ones doesn't mean I have to subsidize them through my purchase of products of similar quality but at far greater cost, with the difference being the standards of living of the producer.

I know, right? This is why I only buy products that are made in sweatshops, preferably ones staffed by child or slave labor. Children and slaves are cheaper!

Allowing ethics to inform the way you purchase products? Oh please. Waah waah waah.

 

[bigbadwolf]

I know, right? This is why I only buy products that are made in sweatshops, preferably ones staffed by child or slave labor. Children and slaves are cheaper!

Allowing ethics to inform the way you purchase products? Oh please. Waah waah waah.

Hehe, good post.

 

[IlyaKEightSix]

I know, right? This is why I only buy products that are made in sweatshops, preferably ones staffed by child or slave labor. Children and slaves are cheaper!

Allowing ethics to inform the way you purchase products? Oh please. Waah waah waah.

There's only one thing I allow to inform the way I purchase products: my economic circumstances. Which aren't very good, what with being a graduate student with a negative net worth due to student loans.