Four questions:

1) By the wording of the proposed law, who would count as a “banker”? If I was still earning £14,000 p.a. in a bank call centre, would my bonus be subject to this hit?

2) Would a tax on bonuses be difficult to get around (for example, by re-signing job contracts each year and including last year’s bonus as part of this year’s salary)?

3) Would a tax on one specific occupation be legal, and, if so, would it be diffucult to dodge (e.g. by changing people’s official job description)?

4) Given that not all bankers are bastards and not all bastards are bankers, what’s the actual – rather than crowd-pleasing – rationale for singling out bankers to pay extra?

What I’m getting at really is that this idea seems both less effective and less reasonable than, say, just raising the percentage taxed on high incomes across the board.

Hi Chaise,

1. No – it would be bonuses over a certain threshold (the 2009 tax was on bonuses over 25k, for example)

2. There are tax dodges, but it is technically possible to design a bonus tax which raises at least £2bn.

3. The govt did it in 2009, hence not illegal.

4. The banking sector has had rather a lot of money from the state, so it seems reasonable to ask them to contribute to help cut youth unemployment (which does, after all, benefit all of us). It’s a similar principle to the windfall tax on private utilities in 1997.

@ Don

RE 1, 2 and 3: cool, fair enough.

RE 4: the sector as a whole did, but obviously several banks did not. Which does make this seem like it’s intended as a kind of mass punishment. It just seems odd to me that we’d bring in a system that said Anne the banker pays extra when Bob the realtor or Carol the oil dealer does not.

I’m still not sure why this would be necessary given the option of just taxing high incomes in general. We could also make the banks (i.e. the companies themselves, not their employees) that were bailed out pay extra, assuming that opportunity hasn’t already passed.

Question: Do you want to tax bankers more to pay for creating more jobs for young people?

Public: Yes.

Question: Do you want peace on Earth and an end to all conflict?

Public: Yes

Unfortunately, regardless of the merits of the policy, it’s pointless using a survey like that to back it up. Yes, something which hits the bankers will be popular with the public, as will creating more jobs for young people. But all that means is that people support the general concept. If you ask people whether they’d like higher spending on public services people will say yes. If you ask them whether they’d like to pay less tax then they will say yes.

The problem is that this policy could be totally be crap when you look at it in detail so using popularity in a survey won’t tell you anything about the practical use of that policy.

Incidentally, I should point out that Labour has promised to raise £2bn through a bonus tax on several occasions and on almost every occasion they’ve said they’d spend the £2 bn on different things. You can’t spend the same money more than once which is why I remain sceptical about this policy.

“@ Chaise Guevara

RE 4: the sector as a whole did, but obviously several banks did not. ”

Not directly maybe but there isn’t a bank out there that didn’t benefit from the government stepping in to stablise the situation. Had those banks been allowed to fail the fallout would have affected all of them.

Don, that’s all well and good and of course we all want some of that money back (although it was Gordon rather than Gideon that gave the money away to the bankers, so not quite sure why it’s the Tories job to get it back, but I digress) and of course we want youth unemployment to come down.

But you would never support scrapping the minimum wage, a policy that has been shown the world over to increase unemployment among the low-skilled and low-experienced. At the moment, this country has approx 8% overall unemployment, with 20% unemployment among 16-24 yr olds. Back in 1996, overall unemployment was 8% but youth unemployment was much lower, at about 15%. This is just an example but plot the graph of overall v youth unemployment if you think I’m cherry picking.

Labour gave our money to the bankers. Labour increased youth unemployment through bad legislation. And now you expect the Tories to fix it.

(For what it’s worth, I don’t think they will – Cameron is a complete berk)

@ 5 JoshC

“Not directly maybe but there isn’t a bank out there that didn’t benefit from the government stepping in to stablise the situation. Had those banks been allowed to fail the fallout would have affected all of them.”

Yes, but a) I’m wary of charging people for services they didn’t actually ask for, and b) this applies to many (if not all) of us as individuals too. And also most other companies. So again, it seems sensible to apply an even-handed tax rather than a tax on people we don’t like, which seems to be the policy under advisement here.

it it were possible, why didn’t the Labour government do it every year from 1997 to 2010, creating over 2.5m new jobs?

The tax they raised in 2009 didn’t create a single new job.

In fact, why wouldn’t any government do it? Bankers are a tiny proportion of the electorate, the vast majority of people support it, so just do it – or, perhaps, is there a perfectly good reason for not doing it?

In fact, taxes must come down. People have become to reliant on the state, which has in turn given Trades Union the view that they have real power. These factors have set the UK (particularly Wales, Scotland and the North) decades.