tag:blogger.com,1999:blog-7156218446024820676.post9023360324852148083..comments2023-05-17T10:38:12.901+00:00Comments on TaxBuzz for the Tax Advice Network: Bank restraint on bonuses would mean LESS tax paidMark Leehttp://www.blogger.com/profile/11524316185528362603noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7156218446024820676.post-10140894062344206352011-01-10T10:44:11.177+00:002011-01-10T10:44:11.177+00:00Hi Mark
Interesting analysis although I believe t...Hi Mark<br /><br />Interesting analysis although I believe that the issue could be much more complex than you suggest. <br /><br />If the bonuses can be reigned in it would enhance the profitability of the banks, this should increase the valuation of the banks (some of whom are owned in part by us). This could be by a multiple that is several times the profit enhancement. <br /><br />Clearly your example could apply for each year that bonuses are paid. So i think there are two sides to this coin and the right decision could/should be influenced partly by the time line to realise the government's investments (and the degree of desperation to generate cash immediately as opposed to in the future).<br /><br />Another point that should be considered is the benefits of the bonus money being used to fund businesses (which should itself generate tax revenues through corporation tax,employment taxes and VAT).<br /><br />Finally there is also the emotive issue, particularly in the case of the nationalised banks. The taxpayer is suffering because of the unwise decisions the industry made in the past, any other business would have been allowed to go to the wall -instead the taxpayer has baled them out. Whilst I think the priority should be to do the right thing for the economy, there should also as far as possible be equity/justice in the government's policy.David Lewishttp://www.camroseconsulting.co.uknoreply@blogger.com