Modified:
22 Jan 2010
by Booji
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DEBATE: BANKERS SHOULD PAY WINDFALL TAXES ON BONUSES.
Posted by: booji
Karma:
2961
The anger over bankers bonuses has finally lead to action in the form of a windfall tax on bankers bonuses. This is justified due to the large profits being made by banks who used government money during the bail outs and were proped up by the Bank of England printing money. However this seems to have had no influence on the bonuses being handed out as the bonus season gets underway. At the same time it could harm the economy if banks carry out their threats to move staff out of London.
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BANKERS SHOULD PAY WINDFALL TAXES ON BONUSES.
Bonuses are made out of tax payer money!
There is little public support for these bankers as they are being paid ridiculously large salaries and then getting bonuses as well. These bonuses should have an additional tax placed on them as it is not fair that people who used to pay tax but are now unemployed have to see their taxes paying the rich bankers more money. Ethically this practice is not right. Whilst we have people suffering from fuel poverty and people suffering from unemployment, these bankers are receiving tax payer money. This money should instead fund those who need that money; those suffering from fuel poverty and those suffering from unemployment. After all, if it were not for the Government ploughing money into these banks, the bankers would be unemployed themselves.
Bankers, although not the most popular of characters, are essential to a capitalist society. By introducing windfall taxes to them, we are only calling the bluff of a very powerful group of people, the ones holding our money in their hands. Personally, I feel terrible that men like Sir Fred Goodwin are allowed to run off into the sunset with taxpayers money, but past experience has taught me never to stir the hornets nest, which windfall taxes will only serve to do, alienating the men with our money.
It is a well-known fact that our stock markets (i.e the FTSE 100, Dow Jones) are built on a 'boom and bust' model, namely, the toing-and-froing of Britain's - and America's- financial state. It happened in the 1920's with the Wall Street Crash following a period of prosperity in America, and again in 1984 in Britain with the miners strikes, and, quite frankly, if we stick with the stock market model we have now, it'll happen again.
We, as prosperous nations, have to accept the fact that boom follows bust (and bust follows boom, repeat ad nauseum) and also realise who the men with the money are.
We cannot risk the rich banikng groups leaving London, it would cripple London. And we cannot risk scaring them away, either. After all, didn't Gandhi once say, an eye for an eye makes the whole world blind?
What do you think? Vote on this point below.
BANKERS SHOULD PAY WINDFALL TAXES ON BONUSES.
Will raise £550m for our cash strapped Government
The Government debt now stands at £844.5 billion[1]. Though the tax may not pay off all the debt, it will certainly help. This could be a classic take from the rich and give to the poor. There are many [projects which are under funded which this 550 million could go towards. It could go towards decreasing unemployment to get our economy get back on track. It could go on a fuel poverty benefit to help the vulnerable pay for their rising utility bills. It could be reinvested into Universities since they have seen a decrease in funding. University funding was decreased by half a billion pounds[2], this windfall tax on bankers could be given back to the universities. With Britain in such a dire state, we need these extra funds to support our economy and our future.
BANKERS SHOULD PAY WINDFALL TAXES ON BONUSES.
Banks should be using their profits to stockpile capital
Whilst the banks have been bailed out by the Government, they seem all to complacent about paying the debt back, regaining their capital share. Instead they are spending their profits on paying bankers bonuses. If banks feel that they are in a financial position to give extra money to those who already earn a substantial wage, then they should be prepared to pay a tax on that additional amount. The reason the Government put money into the banks is to strengthen the UK’s economy. The banks should adopt this as their own aim and should secure themselves responsibly instead of giving away their profits in the forms of bonuses. The idea of the tax is to discourage the complacent attitude and to get the banks thinking about the UK economy as a whole.
BANKERS SHOULD PAY WINDFALL TAXES ON BONUSES.
Not all banks have been bailed out by the Government
Perhaps not all banks have been bailed out by the govenment but they have all benefited from government intervention in at least two ways. First: the government stepping in when it did to save first Northern Rock and later the Royal Bank of Scotland and Halifax Bank of Scotland restored confidence in the markets, without the lifeline from the government that was provided by showing that the government would save a large bank that was about to go bust many more would have needed government help.Second: All the banks have benefited immensely from both the extreemly low interest rates and the quantative easing carryed out by the UK government. The government added hundreds of billions of pounds to the financial system and that went in through the banks. The government printed the money but it was the banks who circulated it and were the main beneficiaries. It is due to this intervention that the banks were so quickly able to return to making big profits.
The media and the public have placed a negative view on bankers based on the fact that the Government bailed a few banks out. But not all the banks received tax payer money. There should be another way for the Government to recoup their funds without placing a tax on all banks indiscriminately. It is simply not fair that banks who did not act irresponsibly, banks that did not need to be bailed out are suffering because of those banks that did. The Government need to be more inventive than merely applying an across the board tax on all bank bonuses.
What do you think? Vote on this point below.
BANKERS SHOULD PAY WINDFALL TAXES ON BONUSES.
It will reduce London’s competitive edge
The people that will be hit the hardest by this measure is UK workers who work for foreign banks. These foreign banks pay UK workers contractually agreed bonuses, but they will not want to pay such large bonuses knowing that they themselves will have to pay a windfall tax on any bonus over £25,000. What this will inevitably lead to is foreign banks taking their branch elsewhere in the world. They will seek the cheaper option and will go abroad. Banks looking to start an international branch will not consider London as an option. This is not goof for the UK’s economy as this will lose London a vast amount of high paid jobs; the income for which would already be taxed, without the windfall tax on bonuses on top. The idea of windfall tax being good for the economy is shortsighted.
Vote on the overall debate: Bankers should pay windfall taxes on bonuses.
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LLBlynch
|09:58, 20 January 10
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Guru Lew
|23:39, 22 January 10
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LLBlynch
|10:09, 20 January 10
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LLBlynch
|10:15, 20 January 10
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LLBlynch
|09:59, 20 January 10
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booji
|14:31, 21 January 10
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LLBlynch
|10:27, 20 January 10
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