Friday, 22 October 2010
Yet more nonsense talked about banks
Thursday's Question Time was full of people saying that it is outrageous that the Government's proposed bank levy will "only" raise £2.5 billion. Now, I support the bank levy, and £2.5 billion strikes me as being quite a lot of money, really. As President Reagan put it, "a billion here, a billion there - sooner or later it all adds up to real money". Actually, Reagan made that joke about millions, not billions, but that's inflation for you. OK, as a supporter of the Coalition and its debt-reduction efforts, I want the banks to pay their fair share. So, how about, not £2.5 billion, but £26 billion? Yes, £26 billion - that being the amount that the banking industry paid in tax in this country last year. So, please, can people stop suggesting that the £2.5 billion bank levy is somehow the only tax paid by banks? But, people say (cue applause on Question Time): "We must tax the bonuses." But bonuses are already taxable. People (be they bankers or anyone else) pay the same tax on their bonuses as they pay on all of their other income. I have sometimes been paid an annual bonus (not by a bank, as I've never worked for one) of a few hundred pounds and it counted towards my taxable income, just like my normal salary did. So when people say that bankers will be paid £7 billion in bonuses, that money will be taxed and so will bring in some revenue for the Government. And yes, we need to crack down on banks' tax avoidance - so it's good that the Government is compelling the banks to sign up to the Banking Code by the end of next month.
Posted by Matthew Harris at 09:00