Britain and France have decided to impose a windfall tax on bankers’ bonuses.
Under the new one-time tax, any bank operating in Britain must pay a tax of 50% on all discretionary bonuses of more than GBP25,000 (SGD$56,500) paid between now and April 5 next year. Banks attempting ‘avoidance schemes’ by postponing bonuses would face further, unspecified punishments. As the bonus payouts are mostly contracted, the banks are obliged to pay. Nobel prize-winning economist Paul Krugman supports the idea.
So what could these fat cat bankers do?
Firstly, they can fly out of Europe to anywhere else such as Asia. They can then do whatever they are doing in Europe but do it in Singapore or Hong Kong instead.
Or secondly, they can stop calling themselves “bankers”. The windfall tax is on bankers’ bonuses and not cleaners’. Perhaps the bankers can call themselves cleaners and they get to keep their bonuses after deducting a nominal income tax. A small humiliation with full pockets.