Friday, March 12, 2010

Conservative with a small c

Nick Clegg calls for 10% bank tax to rescue recession victims

The banks have basically been given untrammelled support by both Labour and Conservative governments to do exactly what they like, and take massive risks with our livelihoods and savings.

Posted by devo @ 08:56 PM (1202 views)
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13 thoughts on “Conservative with a small c

  • vote devo

    windfall tax of 80% (pareto principle) on bank profits, initially for 20 years

    all proceeds to be distributed to the people in the form of vouchers, to be used on local products and services only

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  • mark wadsworth says:

    I am primarily a low taxer but more importantly I am a fair taxer.

    Seeing as the productive economy has to pay VAT of 17.5%, which is twice as much again as corporation tax, hiking corporation tax on banks seems fair enough to me.

    The problem is, it completely misses the point. Far more important to put an end to the bail outs, but hey.

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  • Interesting idea, but falls down when we look at who gets the cash.

    If you throw it all at teenage single parents or training people how to get on and off a bus (to certificate standard) how does the economy get better?

    I don’t think anyone on this site will vote for spending the cash propping up house prices!

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  • what do you think of MY idea?

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  • mark wadsworth says:

    Devo, I think little of your idea, because the first question is to ask ‘Why are banks making so much money in the first place?’

    The answer is, bank bail outs, house price bubble, credit bubble and because politicians look forward to getting jobs with them once they get booted out of office. Which we can sum up as ‘Home-Owner-Ism’ for want of a better word.

    So if we reverse this, liberalise planning laws, have more social housing, sensible mortgage rationing, land value tax etc, banks won’t make these silly profits or be able to pay loony bonuses, so there’d be no point in taxing them at higher rates (because 80% of not very much is barely more than 28% of not very much).

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  • [email protected] – the banks have made enormous profits, beause they have been given free money to re-build their balance sheets and have used this bail-out cash to buy either directly or indirectly, through investors, stocks and shares/ bonds. Hence the massive rise in stock prices and their subsequent massive profits, which are now being paid to their ‘brilliant minds’. Last year was the best of times for bankers and their ilk, the gambling ‘minority, while it was the worst, deliberately, for anyone stupid enough to try to save for this sort of occurence. Basically, all that has happened is the bankers have been given a gold plated endorsement from each and every government in the world to carry on doing exactly what they like and there will never be any pay-back, for them, but ask those currently, or about to suffer the ‘austerity’ measures proclaimed by the very same governments.

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  • The banks were making all that money because they were allowed to carry on paying themselves so much without their excesses being tightly controlled through progressive taxation and regulation. Lax “free market” Govt policy allowed banks to get themselves into the position where Govt was forced to guarantee them, or else collapse the economy.

    So we are stuck with bailouts. But instead of prosecuting the incompetent bosses and clamping down hard on the robber baron banks, they are being allowed to continue with their third-world style cash accumulation.

    Low taxation across the board is a nonsense. Low earners should be low taxed. High earners should be highly taxed, especially when earnings have no relation to value.

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  • mark wadsworth says:

    @ Bystander, agreed. That’s what I said, isn’t it?

    @ LTF, why should higher earners be highly taxed? With LVT, they could choose, entirely voluntarily, to be highly taxed by living in the biggest or nicest houses.

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  • “bankers have been given a gold plated endorsement from each and every government”
    “Lax “free market” Govt policy”
    “they are being allowed to continue with their third-world style cash accumulation”

    — common theme – central authority favouring an interest group. I see no reason why rich people should not be allowed. People earn different amounts for whatever reason. Targeting the rich seems to be nothing but jealousy. Separate money from power, power is the problem, not money. The power lies in a large government. Kill it. What’s an alternative to massive hands on control interference and regulation of corps? Massive hands off advising the public of corps behaviour. Auditors. Like the trains companies that fine at the end of a journey, instead of simply selling a post-journey ticket. Control, control, control… treat people like criminals and babies. Everyone needs a change of mindset.

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  • mw
    Why should they not? The argument advanced by the highly paid is that their income is a (1) reflection of the value they create, (2) an incentive for them to work harder, (3) a return on all their hard work and creativity (1 in a different guise).

    As to (1), the value argument is an illusion – the example of the banks destroys that; and the huge rise in high earners pay in recent years plainly has nothing to do with a rise in value.
    Point (2) – high pay for a few means low pay for the many. What about an incentive for them? Why bother working if you’re paid peanuts, the conclusion of many so called scroungers.
    As for hard work, plenty work hard all their lives for low incomes. And creativity? Re bankers again.

    Assuming it would be very difficult to legislate salary levels (though attempts to control public sector pay have been tried), the answer to unreasonably high salaries is progressive income tax. LVT may help, but no doubt they would try and get round that as they have with income tax. Remember, we have a regressive tax system at present.

    The argument that taxing the rich is about jealousy is trite and bankrupt.

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  • “The argument that taxing the rich is about jealousy is trite and bankrupt.”
    That’s a really crap argument.

    As to (1) — the employer determines their value, not you; the employer won’t pay them more than is financially viable, and if you reduce their pay that results in the company making greater profits, and then you’d be complaining about that. The fact that the employers were using fake money (unconstrained magic with numbers) is the problem, not how much they got paid. Fix the first, the second would follow.
    As to (2) — incentives are the employer’s policy, not yours, I’m astonished at how you expect everything to be so fair, carebear land. Whether or not he incentives work would be revealed during the course of business, to the business dis/advantage. “Why bother working if you’re paid peanuts” — why bother working if the government will pay you not to – the other race to the bottom. Why bother doing advanced work if you get paid the same to do easy work – bingo, no progress. The next time Usain Bolt races, he should be handicapped with a sandbag? Is no one supposed take responsibility for the choices they’ve made in life? Sure, there’s some chance involved, that’s life, or are we going to order the universe too? All tall people report for lower leg amputations.
    (3) — pay everyone the same and no one will bother with the effort of innovation.
    “legislate salary levels” — I’m spinning! “the answer to unreasonably high salaries” — whose reason? If I earned near the same as a NASA scientist (I’m guessing I don’t) I’d feel like a fraud. I’m not as clever as them (though sh!t for me), and I haven’t put as much effort into my education as them – how on earth is that their problem?

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  • “That’s a really crap argument.”

    And that’s not even an argument, nor the rest of it.

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  • Brilliant. Have you considered life on the moon? Things might be sufficiently uniform for you there. Sure, some rocks are a little bigger than others, a few craters here and there, but nothing as extreme as a mountain or an ocean. None of those disturbing acid trip colours everywhere, just comforting tones of grey. A complete lack of life means there is no unnecessary plethora of species – trees, insects, fish – whoa, sensory overload! No wind and no clouds means there’s no unfairness to the clouds when the wind starts to blow them around. There is the issue of one side being dark and the other light, but if you put a bucket over your head you can remain in the dark all the time. Also, you’re alone, so no one can march out of time with you. Everything will be perfectly fair for the entire time you can remain sane. With a few modifications you may even be able to use a Stalin era rocket to get you there.

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