These Credit Suisse bonuses

I was trying to figure out why they were paying them and then:

Insiders denied that the September bonus round had been planned all along in a bid to avoid paying extra taxes.

Ah, yes, the special 50% bonus tax was a \”one off\” wasn\’t it? Applies only to bonuses paid before April 5th this year.

Now, we all know that \”one off\” can become a series of \”one offs\”: this is why we\’re still paying income tax to defeat Napoleon.

However, if the Treasury is going to try and impose such a tax again this year then CS has beaten them to the punch. For of course, (well, at least if the Treasury is going to try and maintain any relationship at all with the spirit of the law) and tax imposed in this financial year will only apply to bonuses paid after the announcement of the tax and before the end of the tax year.

Be interesting to see what you know who says about it.

4 thoughts on “These Credit Suisse bonuses”

  1. The Napoleonic income tax was stopped after Napoleon was defeated. It was many years (at least a decade or two I think) before income tax was reintroduced to address a budget deficit.

    That is, it is incorrect to say income tax was started to pay for a war and has been going ever since. It was started to pay for a war, stopped after the war was over and paid for, and restarted later for totally different reasons.

    Tim adds: OK then, the IRS was still collecting, in the 1990s, a “temporary” tax on phone lines instituted to pay for the Spanish American war of the 1890s. That fit?

  2. Yes, I do completely accept the point you are making (that a new tax or tax increase once imposed for one reason is generally there to stay even if that reason is later removed or becomes negligible). I was just being pedantic by pointing out that technically the current UK income tax isn’t the same one that was started for Napoleon.

  3. In my first job in equities research, I was taught to look very carefully at the “Extraordinary items” and “Abnormal items” in company accounts. If a company declared abnormal write-downs of the same size every year, this was a sign that it was stretching the accounting laws to boost its profit. Such companies were often hiding other things, and one should be careful.

    Companies that declared items above the line that could conceivably be placed below the line were seen as being more honest and reputable.

    If silly laws encourage companies to do this kind of thing, that lowers the standards of corporate probity, which is not generally a good thing.

    (You have one guess which bank I was working for and which taught me this, by the way).

  4. Pingback: Don’t Credit Suisse look smart now?

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