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Bonus-tax disease spreading to France and Germany

In a joint article in the Wall Street Journal, British Prime Minister Gordon Brown and French President Nicholas Sarkozy have come out in favour of a co-ordinated tax on bank bonuses.

"We agree that a one-off tax in relation to bonuses should be considered a priority," they wrote in the Wall Street Journal on 9th December 2009.
 Wrecked Porsche

Angela Merkel: 'Charming'

The French government is now working on bringing Paris into line with London, forcing banks pay a 50% tax on bonuses for 2009 above €27,000 ($39,700). Angela Merkel, the German Chancellor, has described the UK bonus tax as 'charming' and may move in the same direction.
 Frankfurt skyline

£40,000 per household

Bankers, meanwhile, still haven't learned to keep their heads down and their mouths shut. Despite UK banks receiving a public bailout of £860 billion (£40,000 per household) some now moan publicly about how 'unfair' the tax is.

Others threaten to move to less regulated banking centres, e.g. Geneva. Some brag about how easy the tax will be to evade.
Unemployment queue

Unemployment in the UK

Banker soup

With bankers finding it unwise to admit their profession when booking a table at a London restaurant, in case the waiter puts something in their soup, isn't it time they sucked it up and moved on?		 Spoilt child

Wall Street next...

A key question is whether the United States will follows Europe's lead and impose a bonus tax. At present US legislators draw a line between financial institutions which received taxpayers' money and those which did not. The former are seen as fair game for regulation, the latter are, broadly speaking, ring-fenced.

Which ignores the fact that had US taxpayers not intervened last year to rescue the banking system, there might not now be a banking system. So even those financial institutions which took no taxpayers' money owe the American public a debt of gratitude.

Lehman Brothers
AIG Demonstration

Porsches & penthouses

It is estimated that Wall Street banks will pay $26 billion in bonuses for 2009 performance: up from $18.4 billion in 2008.

Main Street USA, struggling with unemployment, home repossessions and wrecked pension plans may not be happy to watch the fruits of their taxes spent on Porsches.
11 December 2009
 Wall Street demonstration

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