France is looking to match Britain’s decision yesterday to impose a one-time 50% windfall tax on bank bonuses, French government officials said today.
The news is not surprising, given Reuters‘ report that British Prime Minister Gordon Brown and French President Nicolas Sarkozy met to discuss the initiative before a European Union summit.
The two also wrote a joint column in The Wall Street Journal in which they detailed proposals, including a tax on bonuses, that they believe deserve serious consideration.
“Among these proposals, we agree that a one-off tax in relation to bonuses should be considered a priority, due to the fact that bonuses for 2009 have arisen partly because of government support for the banking system,” Brown and Sarkozy said.
Whether other governments will follow suit is yet to be seen. Germany, for one, has been sending mixed signals.
Brown’s spokesman Simon Lewis sees “a very clear message coming out of Chancellor Merkel’s team about their political support for what Britain and France have done in this respect.” However, according to Reuters, Merkel did little more than describe the proposal as “charming.”
Conversely, Bloomberg reported that Germany has no plans to follow Brown and Sarkozy’s bonus tax, according to an anonymous government official.
Others don’t find the initiative charming in the least, seeing it more as a political move.
“This is an ill-conceived, incoherent, populist proposal,” Michael Wistow, head of tax at London-based law firm Berwin Leighton Paisner LLP, told Bloomberg. “It’s a shame to see tax used as a political football.”
Dylan Ratigan, the host of MSNBC’s Morning Meeting, also weighed in on the crackdown on banker bonuses. Ratigan looked at how the U.S. might be affected if it acted similarly, breaking down the numbers bank by bank.
“I know that does not come close to replacing the money that bank CEOs stole perpetrating the fraud,” Ratigan said. “But, boy that windfall profit tax would be a heck of a place to start.”
Watch Ratigan’s breakdown here: