This is an Update to the post in this space on Tuesday, December 8, 2009.
Since the post here on Tuesday, December 8, 2009 regarding a Windfall BONUS Tax Proposal, magic is in the air, as they say. On Wednesday, December 9, 2009 action was proposed in the U.S. House of Representatives for what was reported as authority for "a 60 percent excise tax [to] be imposed on employees awarded bonuses by banks that received taxpayer support." Landon Thomas, Jr., "Britain Sets Tax on Bank Bonuses" p. A1, col. 1 (New York Times Nat'l ed., Thursday, December 10, 2009).
In Great Britain, the Chancellor of the Exchequer, or treasury secretary, the Honorable Alistair Darling, announced a new tax on BONUSES on Wednesday, December 9, 2009. The tax would be paid by banks and employees would also be taxed at previous rates on their incomes.
Employers, i.e., the banks subject to the new tax in the U.K., would not be allowed to take a tax deduction for at least the portion of their bonus payments subject to the new tax.
Further, the new U.K. tax applies to all banks doing business in the United Kingdom. That includes banks viewed as operating predominantly from the United States, but with offices in the U.K., such as Citigroup, Bank of America, Morgan Stanley and Goldman Sachs. E.g., Brooke Masters, "The Case For and Against the Bank Levy" (Financial Times at FT.com, Wednesday, December 9, 2009); Deborah Solomon, Sara Schaefer Munoz and Alistair MacDonald, "Firms Face New Curbs on Pay" p. A1, col. 3 (Wall Street Journal, Thursday, December 10, 2009); Landon Thomas, Jr., New York Times, supra.
As reported from Great Britain by Anthony Faiola under the original headline, "Britain Hits Bankers With One-Time Levy on Bonuses," on Wednesday, December 9, 2009, republished under a new headline on Thursday, December 10, 2009 at Washington Post.com:
With public anger growing here, as in the United States, over plans by financial institutions to dole out billions in executive bonus so soon after the crisis, Darling also unveiled a much-anticipated one-time tax on bank bonuses over $42,000 -- generating a pool of $924 million to be spent on job creation.
"There are some banks who still believe their priority is to pay substantial bonuses to their already high-paid staff," Darling told Parliament. "So I am giving them a choice. They can use their profits to build up their capital base. But if they insist on paying substantial rewards, I am determined to claw money back for the taxpayer."
Bankers in Britain are said to be furious, for some reason. See Patrick Jenkins and Brooke Masters, "Bankers Fury at UK Bonus Supertax" (Financial Times at FT.com, Wednesday, December 9, 2009); Patrick Jenkins, Banking Editor, "'What Banker Wants to be in the UK?'" (Financial Times at FT.com, Wednesday, December 9, 2009).
Momentum is growing toward nothing less than making more just the publicly supported structure of wealth distribution. These efforts have force and majesty behind them. Indeed the momentum is already here.
Please Read The Disclaimer.
Comments