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Unlike in the U.S., UK politicians not afraid of their bankers. They are not afraid of banker outrage. They've taken the bull by the horns and imposed a 50% tax on bonus payouts, according to Chancellor Alistair Darling.
The tax takes effect immediately and runs to April 5. It covers 20,000 bankers in the UK. Some 5,000 UK bankers are expected earn more than £1 million in bonuses.
A Treasury official commented: "We hope it will be a disincentive for banks to pay bonuses." Politicians agree the tax is justified as banks have generated excess profits as the direct or indirect result of bank bailouts.
The tax will include all banks, building societies, and other groups that operate in the UK under a European bank system.
The tax is levied on top of marginal tax applied to individuals bonuses and will generate £550 million.
You can predict the reaction of bankers. One senior investment banker said: "This is extreme victimization." Another remarked: "The Treasury and the FSA, the Inland Revenue and politicians are all being very aggressive across the board. The UK is making itself business unfriendly."
The UK's decisive action should be a wake up call for Treasury Secretary Geithner, Representative Frank and Senator Dodd. Don't be afraid to take on the bankers. If the UK can do it, so can we.
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Reader Comments (Page 1 of 1)
12-09-2009 @ 1:10PM
clikdawg said...
"Don't be afraid to take on the bankers."
Ms Madon, they work for the bankers. They believe in bankers, and only in bankers.
Fear's got nothing to do with it; personal interest, everything.
The results you see are the results that have been planned; and the execution of those plans has been flawless.
Nope -- don't look for any help from that direction. Hope can be a very good thing; wishful thinking, not so much ...
12-09-2009 @ 4:30PM
william lindblad said...
Right on Click. For what it is worth the U.K. is a different ballgame, they have an entirely different view when it comes to disassociation of government and business. When Northern Rock went on the verge and the que's were all over the telle, the BOE had no choice but to jump in. Similar to Paulson and Bernanke over here. The difference is that over there the populace is just a little more atuned to what their MP's do in Parliament. Besides, Parliament has had a half dozen scandals to cope with also. Most where related to personal spending, and of course the bottom line is the purse strings. So, over there they have major budget shortfalls and everybody is unhappy with the bankers. Gee, sounds just like here! But you are correct, Barney, Chris, Henry and all of the other chirping canary's are not going to do anything as too much of their campaign money comes from this direction.
The only way this is going to change is for this population to start to pay attention to what goes on in D.C. and that is a doubtful thought.
The investment pages are not something that I care to use as a political soapbox, but our leaders keep mixing politics with economics. Therefore it is fair.
Simple proposal. Let us pick up where Solon left off - become a TRUE Republic. With the use of computers and light speed communications this potential is based in reality. Continue to elect our Congressmen and let them write the laws, but when it comes to the vote, the people would vote. The law would be written and the people would have a 30 day review in which manner to decide. Emergency legislation would be exempted, but would have to be voted on after 6 months. You know, this could be achieved. Can you imagine how much would be saved as earmarks/pork would virtually disappear, not to mention how many lobbyists would be out of work. All that is needed is a popular cry for a Constitutional amendment to incorporate this change. If this idea where to take root, it would be the fastest way to clean up a sorry mess.