A “Greed Tax” on banks

April 21, 2010

The International Monetary Fund has done what it was bid by the G20  and come up with proposals for getting banks to pay for the government help they receive when they get in trouble.  You can read the actual wording here, but it comes down to this:

Cat1) A “Financial Stability Contribution” which would be pooled into a fund that would use it to help weak banks, or just go into general government revenues.

2)  A “Financial Activities Tax” — perhaps intentionally known as FAT — to be levied on combined bank profits and remuneration (for which read “bonuses”) and paid to governments.

The first is a kind of insurance policy. The second, however, looks decidedly like what might be called a Greed Tax — government action on the kind of wealth that has infuriated taxpayers across the world.

The debate will be over whether this is simple kowtowing to populist sentiment or whether it is a reasonable limit on people being accused of knowing none.

One comment

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Just raise income tax on anything over $2M to 65% AND include benefits such as stock and option grants! (Option grants could be paid with options without exercising them.)

Anyone who served a full tour of combat duty in a foreign conflict would have the top rate reduced to 45%. (Combat duty means “feet on the ground” or mission flights – not behind the lines duty.)

I could also see the rate ramp up from say 35% at $2M to 75% over $50M per year.

Posted by jmmx | Report as abusive