The Great Debate UK
from The Great Debate:
(James Saft is a Reuters columnist. The opinions expressed are his own)
A cynical election maneuver it may well be, but Britain's plan to impose a punitive tax on bonus payments is also reasonably well crafted and in broad terms justified.
Facing a monumental budget deficit and an election in months, British Chancellor Alistair Darling announced a plan to slap a 50 percent payroll tax, payable by banks, on their bonus payments in excess of 25,000 pounds to a given employee.
Banks can pay what they like to whom they like, but every pound a banker gets above the threshold means an additional 50 pence for the public purse. The tax will only raise about 550 million pounds, compared to a public sector borrowing requirement of 178 billion, and will expire in April, leaving delayed bonuses subject to a new higher 50 percent personal tax rate previously announced.
So, you can say it is politically motivated, that it is too small to matter and that it is subject to evasion, but these counsels of perfection ignore that it, in its own small way, will make British banks less risky, less liable to need government help and more likely to lend. It is also, given the past two years, something very like fair. Crucially it encourages banks to retain money to rebuild capital.
-Joe White is chief operating officer at Gandi, an Internet domain name registration firm. He will participate in a Reuters pre-budget live blog on Dec. 9, at 12 p.m. British time. The opinions expressed are his own.-
The pre-budget speech will primarily be about two things: reducing the size of the national deficit, and drawing the political battle lines around the economy for the general election.
Alistair Darling is facing the most difficult set of economic circumstances for any chancellor since the 1940s, with the projected substantial fiscal deficits for 2009 – 2010 and 2010 – 2011 likely to be revised upwards from 175 billion pounds to well in excess of 200 billion pounds. He must perform a delicate balancing act to secure the confidence of the global financial markets while protecting any fragile economic recovery and boosting public confidence.
-David Ellis is partner and head of human capital at BDO LLP. He specialises in the development of tax efficient, performance driven long term incentive plans for senior employees. The opinions expressed are his own.-
There’s no doubt about it, the UK’s complex employment tax regime is a major barrier for businesses to attracting talent. For our new report, launched today, we spoke to 126 financial decision-makers and we found that 34 per cent would be more likely to employ additional staff if taxes were reduced or reformed.
No longer just a hopeless cause for anti-capitalist activists, the idea of a global tax on financial transactions is gaining ground in Europe.
European Union leaders could not agree to put it on the agenda of this week's G20 summit on reforming the financial system in Pittsburgh, but the leaders of France, Germany and the European Commission endorsed the concept.
More strikingly, the head of Britain's Financial Services Authority, which regulates the world's second biggest banking centre, said last month that such a levy could help shrink a swollen financial sector.
The debate for or against a Latvian fixed exchange rate rages on. There are good pieces of analyses on both sides of the debate, there are less good ones, there are mediocre ones – and then there is Jonathan Ford’s “Latvia: let the lat go” from 29 July.
–Fay Goddard is chief executive of the Personal Finance Society. The opinions expressed are her own.–
As predicted, Budget 2009 was heavy on figures and forecasts and hard on the highest earners. Unsurprisingly it is the latter that the press has picked up on. We all knew that there would be a new top rate of income tax – though some were taken by surprise at the rate of 50 percent and the speed at which it will be introduced.
from Luke Baker:
For the best part of 12 years, Labour has pursued essentially conservative (with a small 'c') economic policies, steadily underburdening itself of the 'fiscally unreliable' tag that some earlier Labour administrations were (wrongly or rightly) saddled with.
And for most of the past 12 years, as the global economy steadily expanded and Britain's along with it, with aggregate wealth rising smoothly, Labour looked strong at the helm each time the budget came around.
LONDON, April 16 (Reuters) – Poor old Alistair Darling. The Chancellor is girding himself to deliver a truly ghastly Budget, and lined up a crowd-pleasing headline-grabber to distract attention from the financial horrors ahead.
from The Great Debate:
- Robert Engle is the Michael Armellino Professor of Finance at New York University Stern School of Business and a Nobel Laureate. His views are his own. -
We have faced energy crises before. The last energy crisis was about running out of oil. This one is about the fear that we might not. The future health of our planet is jeopardized by the greenhouse gases emitted by our industrial society. But can we afford an expensive energy policy in this time of economic distress?