As the FT has noted this morning:
John Glen, City minister, has vowed that Britain’s financial services sector will enjoy “competitive tax rates” as he paved the way for a Budget cut to the 8 per cent surcharge on the sector.
The same article also noted that the government was reviewing the cap on bankers’ bonuses, which was an EU requirement. The aim is to boost the City of London.
So, as large numbers of working people in the UK face increased NIC, consumer price inflation, massive employment uncertainty, cuts in universal credit, and straightforward shortages because business cannot plan how to get out of a paper bag, let alone recover from an economic lockdown, the City’s bankers face tax cuts and bigger bonuses.
1) Taxes on bonuses are higher – because NI – than taxes on profits plus dividends. So, removing the limit on bonuses will mean a larger portion of the City’s total profit plus labour bill – aka added value – will go in tax payments. For someone who believes in MOAR TAX this is good, surely?
2) The 8% surcharge is on bank profits. The P³ stoutly maintains that taxes upon profits do not impact upon worker wages. Yet here he says that bankers will gain lower tax rates. So, profit taxes on banks must impact upon the wages of bankers.
He never does think through what he says, does he?