Tag Archives: wall street

Banker Bonus Tax: UK and France are Doing it. Why not the US?

The UK has imposed a 50% tax on all banker bonuses greater than $40,000. This will be in effect for all bankks – not just the ones that were bailed out. France is in the process of approving similar legislation. In the UK, the  system will work as follows:

Banks will be charged a 50 percent tax on 2009 bonuses of more than £25,000, or $40,800. It will be imposed on the pool of bonuses paid by a bank, rather than individual payments, and it will be paid by the bank — not by the recipient of the bonus. It will take effect immediately and will affect banks’ 2009 profits.

The reasoning is straightforward: the financial firms were responsible for the financial crisis, the loss of millions of jobs, poverty, hunger, homelessness. All firms are to blame – not just the ones lucky and/or connected and/or large enough to get bailed out. So by taxing all firms, it avoids the problem of having bankers scrambling away from the duds and back into the profitable firms. An equal tax makes ’em squirm, but prevents scrambling.

France is in the process of enacting similar legislation.

In the U.S., however, where the average bonus at Goldman Sachs is $700,000 PER EMPLOYEE, yet public outcry has been muted. Even as Obama calls Wall Street to task, he hasn’t done anything about it. Is that likely to change? Probably not in the near future. The public appears to be beaten down enough to accept extreme inequality as the norm and continue to go about their lives as best they can.