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I hope banks start jacking up overdraft charges, mortgage rates and other fees. That'll teach the bastards.
.05% of WHAT?
If it raises £100 Billion through a .05% tax that means the taxable amount is £200 Trillion. I think its fair to say that investment banks are not collectively making £200 Trillion per year, so this is obviously a .05% tax on the notional value of transactions.... maybe certain types of trades and/or deals.
I don't know how you can determine if the tax is ALOT without understanding what the taxable portion is.
A bank that is taking a 50 bps of notional fee (AKA .5%) and is paying a .05% of notional tax is paying an effective 10% of revenues tax. Take that 10% of revenues and get down to taxable income, and its very likely that this .05% could actually equate to 25% or more depending on the firms margins.
Take this example: $10 Billion dollar deal 50 bps fee, .05% Robin Hood tax Fees = $50 million; Tax = $5 million ETR on Fee = 10%
Take out operating expenses... not sure what that would come out to but Evercore has an operating margin of about 20%, excluding the Armageddon years.... that translates to an operating profit of $10 Million.... hit that with the boilerplate 37.5% income tax rate = $3.75 Million income tax. So $3.75 Million Income Tax + $5 Million Robin Hood Tax = Total Tax of $8.75 Million on an Operating Profit excluding Robin Hood Tax of $15 million... whats the ETR... 58.3%.
Thats very back of the envelope, but 58.3% - 37.5% = is an additional 20.8% tax. Not quite .05% as claimed, is it. In other words, an additional 1/5 tax... put another way, please leave all your profits in a green trash can one day a week and we'll come by to pick it up.
In case you're wondering... double the fee to 100 bps and its an effective 12.5% incremental tax.
robin hood = awesome
robin hood = awesome
i really hate that people are stupid enough to believe this crap. why isnt there a reporter interviewing the politicians supporting this tax to demonstrate that they are dumber than the "banker" in the video and they are really the ones full of crap.
not that i am claiming that banks didnt do fucked up things these past few years and got away with it; it seems like they did
but i hate the fact that random poor people have chosen wall street as a scapegoat because their scumbag politicians told them too
why dont the fuck over doctors; they're rich too. oh wait they are doing that already. who's next? lawyers?
I like how they claim it is a "small" tax...yet it somehow is going to raise £200 billion! Not exactly small then is it dickheads!
I despair at all the comments now about "yeah, every person in finance is a crook, let's kick them all out the country, then our life would be amazing, we could all live in a socialist utopia it would be great". I don't blame the public - I didn't really understand what 'bankers' did either until my first internship - but it is a sad state of affairs when so many people are actively willing our dear, honest, ethical, selfless politicians to cut off the economy's nose to spite its face.
USA! USA!
I don't think we're this crazy to let something like this even receive consideration.
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