“The art of taxation consists in so plucking the goose to obtain the largest amount of feathers with the least possible amount of hissing”. So said Colbert. Judging by the amount of hissing and clucking from the broad-shouldered golden geese of the City of London yesterday we can safely conclude that Alistair Darling’s banker tax is categorically not artful. The Treasury estimates that the tax will raise £500m. With some seemingly simple expedients (delaying payments?) the tax take will be much lower, and if a couple of Goldman Sachs bankers do choose to relocate the long term revenue impact will be negative.
But the banker tax was never meant to be a revenue-raising exercise. It is a message to taxpayers outside finance; “we are making the guilty bankers pay”. This is artful politics. In fact “middle England” may be so pleased that evil bankers are being squeezed that they may not notice the £3bn national insurance bill hit the mat.
Banquo is still an active investor so will declare his financial interest where appropriate in any blog post.