Just One More Tax For Us To Pay
Discussion
In George Osborne’s budget last week one new tax seems to have been welcomed even from those who would normally abhor any extension of taxation. That tax is the new banking levy. George Osborne introduced the levy to cheers from those who should know better as a way of protecting the public from the costs of any future bank failures. This must be one of the most disingenuous statements by any Chancellor; since well Alistair Darling.
It is difficult to know whether the Chancellor is actually lying or just does not understand basic economists. What is surprising is that all those who support long term tax cuts but seem to support the bank levy have forgotten the first rule of taxes: all taxes are paid by the middle classes.
The fact that George Osborne was lying when he introduced the levy as a way of protecting the public from the costs of any future bank failures is clear since the levy is not going to be saved up to protect the interests of the tax payer. It’s just going to count as tax and be spent/wasted like all the other taxes the Government collects.
It’s also a lie because we all know who is going to pay the bank levy. Banks do not have some secret hoard of money they are just like any other businesses. So to pay the bank levy they can either
a) Reduce costs; but I expect they are quite efficient anyway so other than paying lower bonuses which will make only a small contribution to the levy and risk losing their top talent, costs reductions will not be enough.
b) Cut their dividend. So the shareholders, i.e. you and me via our pension funds are worst off, but since this will impact management bonuses I expect this will not happen.
c) Increase their charges, reduce interest paid to savers and increase interest rates to borrowers. All of which just happen to be paid for by you and me and anyone else who uses a bank.
So thank you George for asking me, and many who voted for you, to pay an extra £2.7bn in bank costs so the banks can pay the banking levy for you to waste.
The bank levy is not about protecting the public from the effects of a future banking crisis is just a cynical tax on us all.
What George and Dave should have said, is thank you Mr tax payer for rescuing the banking system with your money, I am now going to create a new a tax which you will indirectly pay, which I than will waste. So that if the banking sector needs rescuing again I can demand even more money off you to do so.
It is difficult to know whether the Chancellor is actually lying or just does not understand basic economists. What is surprising is that all those who support long term tax cuts but seem to support the bank levy have forgotten the first rule of taxes: all taxes are paid by the middle classes.
The fact that George Osborne was lying when he introduced the levy as a way of protecting the public from the costs of any future bank failures is clear since the levy is not going to be saved up to protect the interests of the tax payer. It’s just going to count as tax and be spent/wasted like all the other taxes the Government collects.
It’s also a lie because we all know who is going to pay the bank levy. Banks do not have some secret hoard of money they are just like any other businesses. So to pay the bank levy they can either
a) Reduce costs; but I expect they are quite efficient anyway so other than paying lower bonuses which will make only a small contribution to the levy and risk losing their top talent, costs reductions will not be enough.
b) Cut their dividend. So the shareholders, i.e. you and me via our pension funds are worst off, but since this will impact management bonuses I expect this will not happen.
c) Increase their charges, reduce interest paid to savers and increase interest rates to borrowers. All of which just happen to be paid for by you and me and anyone else who uses a bank.
So thank you George for asking me, and many who voted for you, to pay an extra £2.7bn in bank costs so the banks can pay the banking levy for you to waste.
The bank levy is not about protecting the public from the effects of a future banking crisis is just a cynical tax on us all.
What George and Dave should have said, is thank you Mr tax payer for rescuing the banking system with your money, I am now going to create a new a tax which you will indirectly pay, which I than will waste. So that if the banking sector needs rescuing again I can demand even more money off you to do so.
Percy Flage said:
I think you'll find that a large chunk of the levy will be covered by the saving the banks will make in corporation tax.
But with out the bank levy my bank charges would have fallen, interest earned on deposits would have been higher, and the cost of borrowing less. The marginal costs is a £2.7bn tax on the users of banks.Mrr T said:
Percy Flage said:
I think you'll find that a large chunk of the levy will be covered by the saving the banks will make in corporation tax.
But with out the bank levy my bank charges would have fallen, interest earned on deposits would have been higher, and the cost of borrowing less. The marginal costs is a £2.7bn tax on the users of banks.rypt said:
Oh that Bs, the banks made 5-8bn a year, so they can easily swallow the levy
Sorry you clearly failed basis economics. The banks made 5-8bn last year which they either paid in tax, paid to the share holders, or retained to build up their capital basis.So as I said they either pay less to shareholders like me and you making the share price fall, which is unlikley, or they retain less and reduce their capital making them more at risk of failure and able to lend less in the future.
Dont beleive the lies you and I will be writting out the chaques for this.
I know I'm fed up hearing about the top talent can only be kept if we pay them a gazillon dollars in bonuses.
Perhaps we were waiting for a global move on this rather than unilateral.
Either way I'm not impressed that we should all just sit back, let the bankers do what bankers do best, and wait for another banking crisis because its an inevitable side effect of the system.
Perhaps we were waiting for a global move on this rather than unilateral.
Either way I'm not impressed that we should all just sit back, let the bankers do what bankers do best, and wait for another banking crisis because its an inevitable side effect of the system.
julian64 said:
I know I'm fed up hearing about the top talent can only be kept if we pay them a gazillon dollars in bonuses.
Perhaps we were waiting for a global move on this rather than unilateral.
Either way I'm not impressed that we should all just sit back, let the bankers do what bankers do best, and wait for another banking crisis because its an inevitable side effect of the system.
This is nothing to do with bonuses. Cutting bonuses will pay only a small part of the levy. Perhaps we were waiting for a global move on this rather than unilateral.
Either way I'm not impressed that we should all just sit back, let the bankers do what bankers do best, and wait for another banking crisis because its an inevitable side effect of the system.
You and I will pay the levy every time we use a bank.
If George and Dave want more tax just be honest don't hide it.
Mrr T said:
rypt said:
Oh that Bs, the banks made 5-8bn a year, so they can easily swallow the levy
Sorry you clearly failed basis economics. The banks made 5-8bn last year which they either paid in tax, paid to the share holders, or retained to build up their capital basis.So as I said they either pay less to shareholders like me and you making the share price fall, which is unlikley, or they retain less and reduce their capital making them more at risk of failure and able to lend less in the future.
Dont beleive the lies you and I will be writting out the chaques for this.
A comma would make it much less amusing.Mrr T said:
about as intelligent as your comment.
what proportion of this 'levy' will be paid by uk commercial banks and by extention; you? here's a clue, in a recent report citi estimates the levy will hit hsbc and barclays to the tune of 1% of profits. http://online.wsj.com/article/SB100014240527487048...
it goes without saying someone somewhere will pay for this, i'm sorry you feel this needs pointing out, but the burden falls on all banks not just british high street banks. my first post was brief because i didnt want to get involved in such a weakly argued rant.
Mrr T said:
So to pay the bank levy they can either
a) Reduce costs; but I expect they are quite efficient anyway so other than paying lower bonuses which will make only a small contribution to the levy and risk losing their top talent, costs reductions will not be enough.
b) Cut their dividend. So the shareholders, i.e. you and me via our pension funds are worst off, but since this will impact management bonuses I expect this will not happen.
c) Increase their charges, reduce interest paid to savers and increase interest rates to borrowers. All of which just happen to be paid for by you and me and anyone else who uses a bank.
That must be lefty economics.a) Reduce costs; but I expect they are quite efficient anyway so other than paying lower bonuses which will make only a small contribution to the levy and risk losing their top talent, costs reductions will not be enough.
b) Cut their dividend. So the shareholders, i.e. you and me via our pension funds are worst off, but since this will impact management bonuses I expect this will not happen.
c) Increase their charges, reduce interest paid to savers and increase interest rates to borrowers. All of which just happen to be paid for by you and me and anyone else who uses a bank.
Banks that continue to prosper under the new tax succeed, those which don't, fail. Unless some ridiculous communist party bails them out.
fbrs said:
what proportion of this 'levy' will be paid by uk commercial banks and by extention; you? here's a clue, in a recent report citi estimates the levy will hit hsbc and barclays to the tune of 1% of profits. http://online.wsj.com/article/SB100014240527487048...
QED. “The tax will hit the major UK banks to the tune of 1% of profits”. Why because they will simple increase margins by charging more to me and you. So who pays the tax you and me.fbrs said:
it goes without saying someone somewhere will pay for this, i'm sorry you feel this needs pointing out, but the burden falls on all banks not just british high street banks. my first post was brief because i didnt want to get involved in such a weakly argued rant.
At the moment the levy will only apply to banks operating in the UK and is based on balance sheet size. So most of the cost will fall on the UK public, which is still me and you.Why should I not point this out I hate hypocrisy. If George and Dave want me to pay more tax don’t lie about it.
Edited by Mrr T on Tuesday 29th June 08:21
Mrr T said:
Why should I not point this out I hate hypocrisy. If George and Dave want me to pay more tax don’t lie about it.
No one is hiding the fact that we are going to be taxed more to get ourselves left out of the huge deficit Labour have created - VAT went up to 20% 2 weeks ago for a start. And the banks are going to have to put a few billion aside each year - big deal. £2.7bn is a drop in the ocean frankly.I do hope you were this upset when Gordon Brown raid UK pensions in 1997, and has so far cost the UK public £100bn so far.
Edited by tinman0 on Tuesday 29th June 09:27
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