I'ma struggling to understand what the endgame shall be - Bank bonuses 'to run to bil

[Paddy]

Yes, that's why Govt does not mind those bonuses to paid upfront in full: that's why Liebor let City do whatever they wanted so long as they generated short term money.

Ye of naivety brought up on porridge and babushka’s dumplings.

Banks will dodge bonus tax | Pre-budget report | The Spoon | Comment is free | guardian.co.uk

The most direct and obvious way to avoid a bonus tax is to stop paying it as a bonus. Pay it early, like one of the Asian banks who stumped up two years of bonuses ahead of the announcement (I would imagine UK banks doing the same could be charged with incitement to riot). Alternatively, pay the bonus in the form of a salary or after, say, a five-year period.

It is manifest here that there are infinite loopholes in the definitions of bonus and salary alone, making this an unenforceable tax. Worse still is that the salaries into which these bonuses may be filtered are themselves subjected yearly, along with the bonuses, to fiendishly clever avoidance schemes of standard tax laws.

Financial heads always boast of the enormous amounts of money their industry pours into the government coffers. I would wager that most of the nation, if not the world, would be astounded at the difference between what should be paid and what is paid.

There are myriad ways to avoid tax: share and options schemes are among the most popular. Shares are issued in a shell company, sometimes offshore and by virtue of investment in this fictional entity, one can end up paying capital gains tax rather than income tax.

[Jog On]

I think a lot of people were to blame for the credit bubble. I remember people going into BTL on "no money down" deals and putting deposits on credit cards and calling it leverage.

The whole culture was out of control and like all other bubbles came to a rude awakening and had an unpleasant aftermath as we've all seen and are still seeing. Yes the banks and financial people had a lot to do with it, but the govts didn't act to keep things in check and Joe public enjoyed some fat times as well without much of a plan of how to prepare for the poo hitting the fan

I spent money i didn't have and to some degree I do feel that the banks had a big hand in that when they gave me credit facilities I didn't ask for and aggressively sold me fininacial products I wasn't looking for. But at the time I enjoyed the money and ignored the voice at the back of my mind telling me that this was going to come round and bite me in the behind one day. It did - and I blamed the banks for a while but I'm glad now that I don't any more, I knew what I was doing was irresponsible and ignored that instinct. I think many other people did as well and I think a lot of these people are blaming 'the bankers' for decisions they made.

It was a bubble that burst and now we're in the correction. People need to stop pointing fingers and just get on with it. I didn't see anyone complaining about bonues when the good times were rolling. As annoying as it may be, maintaining a bouyant financial sector is key to getting back into the next bubble..

The bailed out 'public' banks could have paid it all back by now but why haven't they? Because the govt wants to see it's stake in the banks rise for a good 5 or so more years. Dirty Spekulants!

[AtW]

Ye of naivety brought up on porridge and babushka’s dumplings.

Banks will dodge bonus tax | Pre-budget report | The Spoon | Comment is free | guardian.co.uk

The date on that article is 9 Dec 2009 - it was SUGGESTION that amount of money raised from bonus tax won't be high.

Here is what actually happened: Budget 2010: Bank bonus tax raises £2bn | Business | The Guardian (note date AFTER tax was in force)

"Darling was also forced to admit that his early estimates for the one-off 50% tax on bankers' bonuses were far too low and that instead of raising £550m it had actually brought in £2bn. He is using this windfall to fund his £2.5bn growth package to stimulate the ailing economy."

Primary Conclusion - bonus tax raised more money than anticipated.

Secondary conclusion: Paddy is an idiot who should stick to iMacs and generally STFU when adults talk about things such as economics and finance.

[AtW]

Ye of naivety brought up on porridge and babushka’s dumplings.

Banks will dodge bonus tax | Pre-budget report | The Spoon | Comment is free | guardian.co.uk

"In 2010, banks paid 50 per cent tax on bonuses above £25,000 paid to staff. Labour’s tax yielded £3.5 billion for the Treasury, before lapsing as the previous government intended. "

Source: Ed Miliband: tax bankers' bonuses - Telegraph

So bonus tax worked, at least once when it was introduced and they could not react quickly enough with "tax optimisations"...

[OwlHoot]

... is an idiot who should stick to iMacs and generally STFU when adults talk about things such as economics and finance.

Oh, the irony.