At the risk of being unpopular...
...put up the bank levy much further and all the big boys (JP Morgan, Citi, Credit Suisse etc) will just leave the UK. They really don't need to be here, and half their London staff aren't British anyway.
And the poor showing from CGT is due to the fact it's just phenomenally ineffective. The truly rich and big corporations hire clever accountants and lawyers to pay virtually none, so it's only the kind of upper middle class speculators who pay it. And there aren't that many of them playing with a lot of money...
VAT is indefensible philosophically, but one of the easiest taxes to actually generate money with.
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prince-igor si tacuisses, philosophus mansisses, Tue 22 Jun 2010, 13:38,
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a very fair point
lots of the big banks will be eyeing Singapore and Hong Kong if the UK taxes get too large.
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Dr Drink, Tue 22 Jun 2010, 13:42,
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Will they though?
Where would they go? Most other developed places have already hiked up their taxes, and they need to be based somewhere connected and central in order to function. Plus London is on the meridian, which makes time keeping and all that way simpler...
I'm not saying that it's an empty threat, just that we should properly assess this risk rather than just accepting the blithe threat that they would all just piss off and take all their non-dom directors with them.
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barryheadwound Mul-ti-pass? Multipass!, Tue 22 Jun 2010, 13:43,
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Nah don't bother - she never knows anyhow.
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barryheadwound Mul-ti-pass? Multipass!, Tue 22 Jun 2010, 13:58,
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London on the meridian...
... makes not the slightest difference.
The obvious answer to your question is Switzerland, specifically Geneva and Zurich.
That's a very real, obvious threat. Well developed, big finance centre already, low crime, low tax, good flights to everywhere.
And would they? Well to some extent many have effectively. When banks were making redundancies in their global teams, they hacked hardest where taxes dictated. The point is that when they next hire, we'd like some of it to be here...
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prince-igor si tacuisses, philosophus mansisses, Tue 22 Jun 2010, 14:28,
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This is very interesting.
It seems globalisation* has allowed megabanks to commoditise nations: if nation A does not bend over, the megabanks will simply move to nation B.
If these megabanks were doing something criminal, citizens of all nations would demand cooperation (something like Interpol) to prevent these banks just changing nation to avoid justice. But as it's not criminal, nations are doing the opposite: competing to attract these banks, and at least earn some tax rather than none.
With crime, it's a pretty easy mental leap from small scale examples in our personal experience (eg. getting mugged) to demanding that our governments take large-scale action (eg. Interpol, sanctions against states harbouring terrorists, etc), cooperating between nations.
It won't be anything like so easy to get the whole world to agree on what is a just contribution -- ie. a just level of taxation -- that should be taken from the profits of banks (who trade on society's commerce), and given to the (elected governments of the) billions of ordinary people who actually constitute that society and that commerce.
(* "globalisation": I mean reduced barriers to international trade and finance, making it even easier for megabanks to switch from nation A to a higher bidder).
Caveat lector: I probably don't know what I'm talking about, as though that wasn't obvious.
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Bee Nice |-|, Tue 22 Jun 2010, 13:56,
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I think you made a good point well.
Yes, banks are not "misty eyed" about their responsibility to Britain - and most of them are not British, so why should they really?
It's what used to happen on a national scale (let's move our Head Office to Milton Keynes to save rent) but happening on a global scale.
But I think we should remember the reason they do this: it's their job. The people who run big companies are responsible, BY LAW, to shareholders. And actually quite often that IS us, through pension funds etc. If they can see a way to legally reduce overheads and pay increased dividends to shareholders, they have a moral responsibility to do so.
The inequitable thing about these global businesses in many ways is the fact that most of them pay most of the tax they do pay in countries that need it least (here, the US etc).
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prince-igor si tacuisses, philosophus mansisses, Tue 22 Jun 2010, 14:36,
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I agree blame does not rest with the individuals in the banks.
If everyone thinks such flight from tax is bad, the proper mechanism to prevent it is to enact new law.
Pessimistically, I don't see that happening. It's unstable: there's too large a reward for being a defector nation. (Nation X decides to relax its bank taxes, and sees an influx of bank trade).
It's prisoners' dilemma / tragedy of the commons territory. To overcome that, it takes a really simple, powerful, personal mental image to get everyone to cooperate, and to effectively shun defectors. Perhaps one day.
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Bee Nice |-|, Tue 22 Jun 2010, 14:46,
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Aha ha ha. Perhaps today!
http://www.google.com/hostednews/ap/article/ALeqM5iHV4qy6CEXTPufLxX7emismvbp3QD9GGCV1O0 -- "Germany, France, UK commit to bank tax"
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Bee Nice |-|, Tue 22 Jun 2010, 16:41,
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