(Originally posted on December 10th 2009
The first thing my first accounts teacher said to our class was “The only certainties in life are death and taxes.” I do not think that my professor had this in mind but I think that Darling has sounded the death knell of the City by announcing the new tax increases. I have always maintained that bonuses should be paid. It does not matter whether they are short term or long term in nature. Bankers usually do not save their money by putting it in an ISA. They will spend most of it. Whether ploughing it back into the stock market or spending it in Spearmint Rhino. Creating another tier of taxes is not effective. If you think that Bankers are being paid more than they are due then give them the incentive to contribute part of their earnings in the form of a charity. The government may not be getting that income directly but it will help them save a lot by putting in money earmarked for certain causes elsewhere. Bonuses of bankers should not be taxed at a higher rate than the others. Instead create a more liberal policy so that people who have moved to Geneva or are in Dubai will come back to London. If the U.K. wants to become a powerhouse again then more benefits should be given to people working in the financial sector not less.