Thursday, December 10, 2009

Is a bonus tax in our future?

The United Kingdom this week slapped a 50% tax on bankers' bonuses above about $40,000. The one-time tax will be paid by all banks with employees in the country. France pledged it would adopt the same policy, while Germany's chancellor called the idea "charming". Still, the bonus tax seems like a long shot on this side of the Atlantic, where bankers wield immense power. But when Wall Street starts handing out giant year-end paychecks at a time of 10% unemployment, all the campaign donations in the world may not keep legislators facing tough re-election fights from turning on their banker chums. It is an interesting proposition after Goldman Sachs announced that their top 30 executives will not be receiving cash bonuses, but if foreclosures and unemployment remain uncomfortably high, ideas like a bonus tax could gain steam.

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