Now tell me there’s no case for a financial transaction tax

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FT.com / Companies / Banks – RBS pays more than 100 staff a £1m bonus.

The FT notes:

Royal Bank of Scotland admitted on Thursday that more than 100 of its investment bankers will take home bonuses of at least £1m for 2009, a year in which the government-owned bank posted a net loss of £3.6bn.

RBS is one of the biggest players in the socially useless fianncial markers. Those who partake are amongst the recipients of these bonuses.

So please don’t now tell me there’s no case for a financial transaction tax of the sort proposed by the TUC, Tax Justice Network, Christian Aid and others in ‘Taxing Banks’ where we firmly predict that one of the benefits of such a tax will be a significant fall in trading volumes and consequent demand for bankers – with their pay tumbling as a result.

I’m well aware conventional economists do not agree – and they have provided not a shred of evidence, let alone logic, to support their case as yet. They simply say the cost will be passed on to others – but when the customer for more than 40% of all trades in this market is another bank and the number of customers overall is tiny there is no logic in that claim – the consumer is identifiable and able to resist the charge.

I stand by my claim – one of the great benefits of financial transaction taxes will be that they will significantly cut bakers’ pay. And that’s universally considered a good thing by all but bankers and those in awe of them.

Rather oddly, you can’t imagine why they would be so vehement in their opposition unless I was right, can you?