Reply to: Tax raid on banks planned by ministers

[Lockhouse]

A windfall tax is not the answer - what's needed is something that directs a surplus of profit back to the people that need it most - those people and businesses who can't get credit.

[Platypus]

I have a mate who is still being paid his full salary of 90k from Lloyds TSB 10 months after he failed an interview for his own job, they just sent him home on gardening leave and have yet to decided how to get rid of him.

With any luck, anyone who remembers this fact will also be on gardening leave or transferred elsewhere. He could continue to receive his salary for a long time yet !

(I've heard of cases like this in the past, e.g. the person who wrote this book while being paid by his employer who had forgotten all about him)

[AtW]

Isnt the whole reason for the booming financcial sector in London down to a more favourable tax regime?

No - lax regulation was the key.

[HairyArsedBloke]

Is there anyone you don't blame?

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[BrilloPad]

I don't blame the banks in exclusion, yes the public are also to blame. Nor do I blame the UK Goverment for creating US sub-prime. I blame them for not controlling our housing boom though, which led to an localised boom that could not be sustained.

However, I don't see how any Goverment can prevent poor investment decisions by private companies. They were not forced to leverage their businesses to such a ludicrous extent. These people who have done well by taking idiotic risks, have largely done well at the taxpayer expense. I do appreciate some banks have acted reponsibly, the others should have been left to go to the wall.

Do you work for a bank by any chance?

Is there anyone you don't blame?

[sunnysan]

Banks

Not sure I get this,

After bailing out the banks, the government is now going to claw back the money by which by nature will be retrospective taxation on profits thats are made with taxpayers money.

Surely the banks will, assuming that with the public support the govt can drum up for "punishing" banks with tax will result in draconian tax legislation, just relocate operations to more tax friendly destinations?

Isnt the whole reason for the booming financcial sector in London down to a more favourable tax regime?

Maybe some financial professionals can enlighten me as to what, other than favourable tax legislation is keeping banks operating in the UK?

[DimPrawn]

The billions paid to bankers in bonuses is going to find it's way straight into London property.

This ripple effect will mean whilst most people will be unemployed and facing a grim decade, at least the price of houses will be booming.

Boomed!

[BlasterBates]

Think about it....where are all these profits coming from? Has anyone noticed, that when the market crashes, you get a letter from your pension fund, that due to difficult market your pay out will be considerably less, but then after the market fully recovers about a year later, no letter, saying, "hey the market recovered, everything's fine".....funnily enough though the banks pay out billions in bonuses. I read one column from "City Boy", where the fictitious character was booking the profits for the boys and the losses into some pension fund....yeah too right mine Tax em into exinction

[Sysman]

I blame the government for not contolling the housing boom and not pricing money higher during that boom.

actively encouraging the housing boom

[AtW]

"The Golden Rule is a guideline for the operation of fiscal policy. The Golden Rule states that over the economic cycle, the Government will borrow only to invest and not to fund current spending. In layman's terms this means that on average over the ups and downs of an economic cycle the government should only borrow to pay for investment that benefits future generations. Day-to-day spending that benefits today's taxpayers should be paid for with today's taxes, not with leveraged investment. Therefore, over the cycle the current budget (ie, net of investment) must balance or be brought into surplus."

http://en.wikipedia.org/wiki/Golden_Rule_(fiscal_policy)

It was golden rule before Brown sold all the gold on the cheap

[Bagpuss]

No, I'm an Investment Management person - the sort of people that look after your pension money and over the past ten years have managed to increase it's value by exactly nothing.

I don't have a pension, but anyway I understand that a lot of factors have contributed to this mess. However the ultimate lesson is never to borrow more than you can afford to pay back, and that applies to both individuals, Governments and private organisations. It's blatently obvious that many did not consider the ramifications of adhering to that basic economic principal.
I don't agree that all banks should be 'punnished' and blame shifted to that one participant in this mess but it's obvious certain 'golden goose' mechanisms need to be dismantled and banks need to replenish reserves before paying bonuses, a lesson that doesn't seem to have been learned.

[Gonzo]

Do you work for a bank by any chance?

No, I'm an Investment Management person - the sort of people that look after your pension money and over the past ten years have managed to increase it's value by exactly nothing.

[Bagpuss]

I've said this before and I will say it again that much of the blame lies with Gordon Brown and the Financial Services and Markets Act 2000.

These brightest people that you refer to have done very well for themselves over the last decade as you would expect but maybe that wasn't the result that the country wanted?

I don't know. The banks find a way to keep the property boom going and going, because that was what people wanted, and now they are treated as though they are the villans.

I would look at the public's love affair with ever rising house prices for no effort as the root of the trouble.

I don't blame the banks in exclusion, yes the public are also to blame. Nor do I blame the UK Goverment for creating US sub-prime. I blame them for not controlling our housing boom though, which led to an localised boom that could not be sustained.

However, I don't see how any Goverment can prevent poor investment decisions by private companies. They were not forced to leverage their businesses to such a ludicrous extent. These people who have done well by taking idiotic risks, have largely done well at the taxpayer expense. I do appreciate some banks have acted reponsibly, the others should have been left to go to the wall.

Do you work for a bank by any chance?

[Bagpuss]

Without taxpeyer money they wouldn't even be in existence now

[Gonzo]

You speak like they are children who need to be nannied! While, I thought these were some of the brightest people we had in this country? Obviously not.

I've said this before and I will say it again that much of the blame lies with Gordon Brown and the Financial Services and Markets Act 2000.

These brightest people that you refer to have done very well for themselves over the last decade as you would expect but maybe that wasn't the result that the country wanted?

I don't know. The banks find a way to keep the property boom going and going, because that was what people wanted, and now they are treated as though they are the villans.

I would look at the public's love affair with ever rising house prices for no effort as the root of the trouble.