Alistair Darling says, according to the FT, of his banker’s bonus tax:
“I think it will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and . . . will find all sorts of imaginative ways of avoiding it in the future,” Mr Darling said at a financial services conference sponsored by Nomura, the Japanese investment bank.
Well, that’s a staggering insight. And I am sorely tempted to say “I told you so”.
There were always vastly better ways to tax banks to change behaviour. A one off levy was never going to be one.
It succeeded in raising revenue — which was good — but it was never going to achieve more.
Now let’s move on and tackle the agenda I set out in Taxing Banks. That will tackle the problem for the benefit of us all. We could start with a financial transaction tax‚Ķ..
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Alistair Darling, although a much more balanced personality than Gordon Brown and reputedly much nicer to work for, is not that great on economic policy, sadly – and this comment just reflects that. (Not that Brown didn’t have his problems on economic policy as well, of course – listening far too much to Irwin Stelzer, for instance).
Alistair’s said he’ll step down as Shadow Chancellor when the results of the Labour party leadership election come through. I think Ed Balls would be a good choice as his replacement (assuming Ed B doesn’t win the leadership – this looks unlikely as I can’t find anyone who’s voted for him yet).
And also hopefully move forward to remove or at least curb the hugely unnecessary and wasteful tax-payer-funded welfare fincos receive by way of the tax deductability of interest payments on their debts (excluding deposit liabilities and equity liabilities). With an estimated debt level of around £5 trillion at last count it continues to baffle me that the Treasury refuses to estimate how much this tax shield and welfare to bankers is actually costing the tax-payer every year – leaving aside the wider cost to the economy and future generations of continuing to promote debt-fuelled growth at the expense of real jobs.