UK hits bank employees with 50% bonus tax - "We hope it will be a disincentive for banks to pay bonuses"

[w¡n9Nµ7 §£@¥€r 123]

U.S. Probably Will Avoid Matching U.K. 50% Bonus Tax

Dec. 9 (Bloomberg) -- U.S. lawmakers already wary of expanding the government’s role in running financial companies probably will avoid matching the U.K.’s tax on banker bonuses.

“We don’t think it is at all likely that Treasury-IRS would impose a 50 percent tax on banker bonuses,” said David Schmidt, a senior consultant for New York-based compensation firm James F. Reda & Associates. “This pay cut would likely cause an exodus of talent.”

To where? Everyone else is doing it too

The UK and France isn't "everyone".

[Dan J 277]

U.S. Probably Will Avoid Matching U.K. 50% Bonus Tax

Dec. 9 (Bloomberg) -- U.S. lawmakers already wary of expanding the government’s role in running financial companies probably will avoid matching the U.K.’s tax on banker bonuses.

“We don’t think it is at all likely that Treasury-IRS would impose a 50 percent tax on banker bonuses,” said David Schmidt, a senior consultant for New York-based compensation firm James F. Reda & Associates. “This pay cut would likely cause an exodus of talent.”

To where? Everyone else is doing it too

The UK and France isn't "everyone".

I would expect most, if not all of the EU to follow suit. With that it would pretty much leave Dubai and Asia as financial centers that people could go to.

[w¡n9Nµ7 §£@¥€r 123]

U.S. Probably Will Avoid Matching U.K. 50% Bonus Tax

Dec. 9 (Bloomberg) -- U.S. lawmakers already wary of expanding the government’s role in running financial companies probably will avoid matching the U.K.’s tax on banker bonuses.

“We don’t think it is at all likely that Treasury-IRS would impose a 50 percent tax on banker bonuses,” said David Schmidt, a senior consultant for New York-based compensation firm James F. Reda & Associates. “This pay cut would likely cause an exodus of talent.”

To where? Everyone else is doing it too

The UK and France isn't "everyone".

I would expect most, if not all of the EU to follow suit. With that it would pretty much leave Dubai and Asia as financial centers that people could go to.

Exactly. Dubai and Asia.

[w¡n9Nµ7 §£@¥€r 123]

Goldman scraps cash bonuses for leaders

Goldman Sachs unveiled plans to eliminate cash bonuses for its top 30 executives this year.

...

The new policies come as some of the world’s financial capitals weigh steep taxes on bonuses paid to employees of banks that drew government support during the credit crisis. Goldman’s rapid recovery from the downturn, and the likely windfall many employees will reap next month thanks to surging profits, has made the bank a frequent target for politicians and shareholders.

“The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders’ meeting in May,” Lloyd Blankfein, Goldman’s chief executive, said on Thursday in a statement.

...

The 30 members of Goldman’s management committee will receive their entire 2009 bonus in stock awards that must be held for five years. Those restricted shares can be reduced if the bank finds that the employee failed to properly analyse or disclose risks.

[mawilson 2,133]

Not going to happen here.

1) The administration is anxious not to be seen as confiscatory and socialist

2) US Congress is nearing mid-term elections in which bonus recipients will be important donors

[Peikko 1,575]

It's an ill wind - but it does go to show, should anyone be in any doubt, how opportunistic politicians are; and not just those wearing red lest anyone believe that somehow the right are exempt from such shenanigans. No doubt labour are trying to cash in on the anti-banker sentiment.

If one takes a broader look, this kind of scenario is inevitable and I can't see any legislation that can change it without imposing restrictions that would fetter capitalism. Your dollars are safer stuffed into your mattress

[Dan J 277]

Goldman scraps cash bonuses for leaders

Goldman Sachs unveiled plans to eliminate cash bonuses for its top 30 executives this year.

...

The new policies come as some of the world’s financial capitals weigh steep taxes on bonuses paid to employees of banks that drew government support during the credit crisis. Goldman’s rapid recovery from the downturn, and the likely windfall many employees will reap next month thanks to surging profits, has made the bank a frequent target for politicians and shareholders.

“The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders’ meeting in May,” Lloyd Blankfein, Goldman’s chief executive, said on Thursday in a statement.

...

The 30 members of Goldman’s management committee will receive their entire 2009 bonus in stock awards that must be held for five years. Those restricted shares can be reduced if the bank finds that the employee failed to properly analyse or disclose risks.

Now that's more like it.

[mawilson 2,133]

The 30 members of Goldman’s management committee will receive their entire 2009 bonus in stock awards that must be held for five years. Those restricted shares can be reduced if the bank finds that the employee failed to properly analyse or disclose risks.

Now that's more like it.

Which means they won't pay a penny in taxes on those shares until they sell them... in 5 years.

[Dan J 277]

The 30 members of Goldman’s management committee will receive their entire 2009 bonus in stock awards that must be held for five years. Those restricted shares can be reduced if the bank finds that the employee failed to properly analyse or disclose risks.

Now that's more like it.

Which means they won't pay a penny in taxes on those shares until they sell them... in 5 years.

That's fine, there would be a short term drop in tax revenues, which will be made up later. But at least the risk is spread to those making the decisions.