I’ve been wondering when the taxation solution would pop up in the financial press regarding the record bonuses Wall Street is set to pay out this year.
Today it does—in The Wall Street Journal’s Heard on the Street column, of all places.
Simon Nixon writes:
This year’s bank profits are windfalls in the purest sense. They aren’t the due rewards for exceptional skill but gifts from taxpayers.
Anybody care to argue that one? You’ll have to deal with this:
Many banks are earning huge, risk-free profits borrowing from central banks at ultralow interest rates and lending back to governments at much-higher rates. If this giant, hidden subsidy was being used to support new lending, fair enough. Instead, it looks destined for bankers’ pockets.
Remarkably, Nixon calls for a windfall-profits tax on bonuses as one solution, ending with this conclusion:
If banks can’t be trusted to do the right thing and exercise self-restraint, governments shouldn’t be afraid to help.
Let’s be clear: This isn’t the WSJ editorial page. But it ain’t The Nation, either. It’s obvious the banks have overplayed their hand these last six months and there’s a backlash brewing, even in what should ostensibly be friendly quarters.