Martin Wolf: Tax Windfall Bonuses
Martin Wolf wants to take bankers who are living large on the taxpayer dole, and tax them, big and hard. He gives 6 reasons:
1) Some institutions that are “making exceptional profits because they are beneficiaries of unlimited state insurance for themselves and their counter-parties.” These largest business subsidies ever deserve to be taxed.
2) “Profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state.” It is not the role of the state to give banks a “license to print money.”
3) Generous bailouts were “to restore the financial system and the economy, not to enrich bankers.”
4) Risk takers deserve huge rewards — but not those who risked and lost and were rescued by the state.
5) Exceptional interventions in times of crisis also mean exceptional interventions to recoup costs when the crisis is past.
6) These enormo bonuses are “Hidden gifts” from the state. What the state gives, the state is entitled to take back.
Can’t say i find much to disagree with there . . .
>
Source:
Tax the windfall banking bonuses
Martin Wolf
FT, November 19 2009 22
http://www.ft.com/cms/s/0/f9d3132c-d55b-11de-81ee-00144feabdc0.html
November 24th, 2009 at 9:14 am
“Profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state.” It is not the role of the state to give banks a “license to print money.”
gee BR- are people finally catching on that even a blind ‘learning challenged’ monkey could have had a banner year- so much for the “Master’s of the Universe”
not smarter, not brighter- just more connected- you know- the Treasury and Fed “got their back”-
that they should be taxed for their “windfall” is the least the USG could do
November 24th, 2009 at 9:18 am
The problem is that the government was too free and easy with its largess in the first place. Wolf is just envious.
November 24th, 2009 at 9:20 am
past the fact that ‘Taxing’ these ‘bonuses’, merely, reinforces the propriety of the ‘bailouts’, in the first place, this: “2) “Profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state.” It is not the role of the state to give banks a “license to print money.””
is laughable, in the extreme. Or, is, utter, Horse****.
“It is not the role of the state to give banks a “license to print money.””
Ol’ Wolf should acquaint himself w/ http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=The+Federal+Reserve+Act+of+1913
then, maybe, he could wonder..WTF did that do? if not “give banks a “license to print money.””??
also, are not #’s 3 & 4, at odds with each other?
I’d say, “I love the smell of Agitprop in the morning..”, but, really, I don’t..
BR,
do you mean ‘can’t', or ‘won’t’ ?
November 24th, 2009 at 9:31 am
Why not? There are good reasons for this kind of taxes. I still contend that is better to tax capitals and bonuses, rather than labor, production or consumption. I posted it at
http://mgiannini.blogspot.com/2009/11/taxing-financial-transactions-why-not.html
The fact that banks make profits with taxpayers money or thanks to government help, as it is the case otherwise they should have failed, it’s a cogent case for any kind of windfall tax. Moreover if they are “polluting” the system there is also scope for taxing their negative externalities.
November 24th, 2009 at 9:35 am
Have you seen “Newer Moon?”
It’s a non-teen flick about a Vampire Squid who loses his pants, Hester-like…
http://www.huffingtonpost.com/2009/11/23/devin-hester-pants-video_n_367145.html
…because crusading journalist Martin Wolf got his dander up, whilst the key-stone regulators try to figure out what to do with eight-legged skivvies they’ve just received as a quarterly estimated payment.
November 24th, 2009 at 9:47 am
I’ve been saying this for over a year now. Why has this been given no serious consideration?
November 24th, 2009 at 9:52 am
Barry,
Wasn’t it you that said that the GS big bonuses were “OK” and all part of the “meritocracy” system that is Wall Street?
Either the big paydays are legitimate or they’re not. Which is it?
November 24th, 2009 at 9:54 am
This is why they should have been allowed to fail. The ramifications of AIG’s rescue gets uglier every day.
OT: There’s a young man in a hospital in Birmingham, Alabama that’s having the bone marrow of an anonymous nineteen year-old female infused into him today in order to replace his old marrow and hopefully cure his leukemia. This old Curmudgeon don’t love much, but he loves that kid with all his heart and soul. Keep a good thought for him. And God bless that young lady for her act of love and altruism. His story is here:
http://www.caringbridge.org/visit/reagankeith/createorsignin
November 24th, 2009 at 9:58 am
@AT: I think we know the answer to that question, as does Barry. None of this stuf f is “legitimate” by my definition of the word.
November 24th, 2009 at 10:01 am
manny-
maybe your message finally got through- one of those “damn- why didn’t i think of that” moments
TC-
dude- hope all goes well and your son is on his feet in record time
November 24th, 2009 at 10:02 am
@Curm: Sending positive vibes your way.
November 24th, 2009 at 10:06 am
@ahab: LOL, that’s right, I’m sure it was that. Being right doesn’t matter. Being a “somebody” (whether right or wrong) does.
November 24th, 2009 at 10:08 am
Wow! This is amazing! Our world appears to be changing. I never would have believed it. Can’t really feel sympathy for the bankers though, they did it too themselves. Pushed the envelope too far and then danced on graves. What did they expect? Not this
(I know I didn’t) but I’ll take it
I think you just made my day Barry
Word for the bankers:
Never get the ‘cattle’ so mad that they actually start to look at what you are really doing
November 24th, 2009 at 10:09 am
re BR-
w/o researching it- i think his point was that it was “much to do” about nothing- the bonuses being chump change in the total scheme of things-
however- symbolism does matter in my book- and to tax the windfall profit tells the “regular” folk that the USG knows the profits were the result of USG backstopping and rescue of the banks-
so the profits should go back to Uncle Sugar- at least until next time
November 24th, 2009 at 10:32 am
Lets tax all capital gains as income and lets get the top bracket up to 70% as in the good old days when “we the people” payed as much in taxes as “we the people” used on spending for the collective good. As long as the consumer class is not hit with higher taxes the real economy is not going to get hurt by removing capital from the speculators.
November 24th, 2009 at 10:34 am
@DeDude: And you still trust our corrupt reps on both sides of the aisle to use those funds wisely? Please.
November 24th, 2009 at 10:42 am
If anybody is following the Dec 21, 2012 thing did you realize that the date coincides with the expiration of the Fedreral Reserve’s mandate? It’s also 99 years from the creation of the fed almost to the day. The numbers just clicked for me today and I did some searching but as some around here would say: Only the tinfoil hat types have picked up on it
November 24th, 2009 at 10:49 am
manny-
dedude has a valid point-
but then again- so do you-
i guess dedude’s point is to take from the rich and give to the lower classes- because the lower classes will spend the money and not engage in reckless speculation-
but then we have to “buy” into the whole increased consumption model being the “right” model for gauging a country’s economic success-
in that vein- this Friday- after Thanksgiving- please consider the following-
https://www.adbusters.org/blogs/adbusters/buy-nothing-day.html
November 24th, 2009 at 10:53 am
@ahab: But you and DeDude are assuming (falsely, I would presume) that those dollars would somehow reach the middle and lower classes where it would actually be spent quickly to spur the economy. Knowing everything that we now know about our fearless leaders, how can we have ANY confidence this will actually happen? The bailouts should have been targeted at the minions and small businesses from the get-go. Why would it happen now?
November 24th, 2009 at 10:54 am
@ahab: And don’t worry. I NEVER shop on Black Friday. EVER. I also do almost all of my shopping online. Think I’ve been to the Mall of America once or twice in 4.5 years here, and that was to hit the amusement park for my nephew.
November 24th, 2009 at 11:05 am
Tax them is the only thing we should do? How about take back $ they made from the bubble before the mess hit the fan? Then hand them over to the pitchforkers! We need to prosecute or they’ll just keep the abuse coming. If all we do is tax them fees will rise.
November 24th, 2009 at 11:06 am
manny-
that’s the theory-
never said it would work (-:
also- good for you- re Black Friday- wish all would do the same-
to all- consider the following this Friday-
https://www.adbusters.org/blogs/adbusters/buy-nothing-day.html
November 24th, 2009 at 11:51 am
Curmudgeon. My thoughts and prayers are with you.
November 24th, 2009 at 1:43 pm
Does anyone remember that aging document called the constitution of the US???? It expressly prohibits from making laws to target individuals or groups ala a windfall tax… but hey we ignore enough of the document these days I guess another volition is in the cards!
Plus, this recommendation is trying to fix the effect not the cause, the cause is give free money to bankers! Stop giving free money to bankers and let them FAIL!!!!! Then we won’t need a illegal win fall tax.
November 24th, 2009 at 3:16 pm
Newlum noone is talking about targing individuals or groups. We’re talking about taxing all the greedy bastards.
If you haven’t noticed it’s a little late to say stop giving money to bankers, they already have all the money.
The cause of the problem is greed. Tax Greed. That is the solution.
Oh, and by the way, trying to run someone elses country on the other side of the globe is also greed.
November 25th, 2009 at 3:25 am
I think the bill being drafted by Democratic Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.) on the sale and purchase of financial instruments such as stocks, options, derivatives and futures, should get your attention:
http://thehill.com//homenews/house/69295-dems-push-wall-street-150b-stock-tax
It makes a lot of sense as I contend here:
http://mgiannini.blogspot.com/2009/11/taxing-financial-transactions-why-not.html