I dislike banks as much as anyone else. But does it bother anyone else to see rules changed around? Wouldn't it be a better approach to tell people/corporations how they're gonna be taxed?
It does not bother me. But I think there should be a min/max for how much wealth a person has. No one suffers from taxing windfall profits. Windfall , by definition, being unexpectedly high profits.
> No one suffers from taxing windfall profits. Windfall , by definition, being unexpectedly high profits.
1. This is objectively false. Shareholders of the bank suffer, because they get less profits. This may not be a crowd that solicits a lot of sympathy, but they still exist.
2. How do you feel about VCs and startups? Their entire business model is investing in 100 companies, knowing that 99 will fail but 1 will make astronomical returns. How would this work if there were windfall taxes?
I think you don't understand what the word suffer means. Those entities don't lose anything. It's not possible to lose something you don't have. In an alternate universe where the windfall tax did not occur those entities have more money. But in this universe they don't lose anything. They don't suffer.
To call it a loss means that money was taken from them. If someone promises to leave me $1 million when they die and then they decide to change their mind I do not suffer. Nothing was taken from me. I did miss out on having $1 million but have suffered no loss. I never had the $1 million to begin with.
> Those entities don't lose anything. It's not possible to lose something you don't have. In an alternate universe where the windfall tax did not occur those entities have more money. But in this universe they don't lose anything. They don't suffer.
That's a strange way of putting it. Suppose you were at the casino and won a few thousand dollars. When you decide to cash out they informed you there was a "winnings surcharge" (that they didn't previously tell you about) and took 50% of your winnings. Would you say that you didn't "lose anything"?
I made an edit to my comment above. It may explain more my position.
We live in a society and there aren winners/losers in a financial sense. But we all have to live together. That 10 people have as much wealth as 150 million people is obscene and immoral. Taxing such wealth to use for the betterment of us all is right, just, and sound policy. Obviously we disagree on this. I hope your view does not win out in the long run. It has won out in the U.S. in the present and the effects have been bad. Such is my view.
I mean the VC model seems kind of broken these days. Second growth/market penetration/new product related profits are different from windfall profits so it's not quite the same though I see what you are trying to do is frame it in an SV start-up viewpoint.
The "your parents" are only harmed if the public benefit from taxes don't offset the benefit that is received directly in the funding of the 401k or other relevant investment accounts.
In America anyway, the wealthiest 1% own 53% of the stock market. I highly doubt that the "your parents" would benefit more from funding of their investment accounts than they would benefit from the tax revenue generated. Of course my assumption is highly dependent on public policy.
While you seem to be trying to say that bank shareholders are astronomical or just wealthy people and aren't worthy of sympathy. You seem to fail to realize that most 401k holders are bank shareholders as a function of their holdings. They are arguable more hurt than the people who get large gains.
I'm not defending anyones point here but pointing out that you haven't quite grasped how the economy works or alternatively you like snarky little value add comments.
>Windfall , by definition, being unexpectedly high profits.
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Just because it's called a windfall tax does not mean it only effects windfalls. This is really just a "surprise extra tax". Plenty of people said that rising interest rates would mean more risk but also more profit for banks. Now they have taken the risk they're being told the profit is not theirs...
If you have surprise ad-hoc taxes (i.e. laws) they you no longer have the rule of law. In this case it is almost an ex-post facto law as the tax applies to earnings that occurred before the tax existed.
Surprise laws should bother you on general principles.
Tax unpredictability, high taxes, or capping profitability is a great way to scare off businesses from operating in your jurisdiction.
Profits by definition mean leftover money after all expenses. Paying tax on profit does not incur a loss by anyone. It does mean that someone receives less than if there was no tax but it isn't a loss. You can't suffer if nothing was taken away.
I mean, they kind of are. You might call it an ex post facto telling, but there you have it. I'd prefer everyone jumped on board and did it everywhere so there was no FAFO necessary.
They're not changing the rules of the game on Jane Public's family here. They're sur-taxing banks' already exorbitant profits. Oh no, the bankers bonuses will be 20% instead of 30%!
Profits are net of expenses. This is, if anything, an incentive to pay higher bonuses to bankers. So it's more like the bankers will make 500% bonuses instead of 200% and local pension funds will take the penalty.
In the U.S. bonuses are taxable income and the marginal rate of taxation for the bonuses comes at the high end of an employee’s tax bracket. In the U.S. corporate tax rates are lower than the income tax rate for high individual earners. Therefore, from a tax collection perspective, it’s good that the excess profit go toward bonuses.
Pensions don’t take a penalty. A penalty implies something being taken away from them or a charge to them. Nothing is being taken away from the pension.