Bank Bonus Windfall Tax

I spent a lot of last year, saying how much tax revenues had fallen. The credit crunch and recession caused many traditional sources of revenue to dry up. Especially higher rate of income tax, stamp duty on housing purchases e.t.c.

Alistair Darling will be feeling somewhat relieved that his windfall tax on bank bonuses has netted the government an extra £2bn in tax revenue (higher than the estimated £550m)

This windfall tax revenue has occured because banks have been paying record bonuses – despite only 12 months since the banking sector was bailed out by the government.

It is interesting that the tax of 50% has not deterred the bonus culture. The Guardian article even suggests banks have paid out more so workers don’t lose out from the higher tax.

It’s a strange situation – our national debt has increased significantly because of the bailouts and yet major investment banks are still able to pay out a global bonus of £40bn