Should the US tax bank bonuses?
The New York Times calls for a one-time banker tax, and it scoffs at banks' threats to leave the country.
"This is a windfall that they should not be allowed to keep," the Times writes in an editorial.
Instead, the U.S. government should take a cue from the British, who recently enacted an immediate 50% tax on bonuses above about $40,000. The British government stands to make about $1 billion from the move.
The U.S. could see a much greater slice, since its financial sector is larger, the Times writes. And the government could use that money to create jobs for out-of-work Americans.
Already, banks are threatening to leave the U.K. Goldman Sachs (GS), for example, has growled about moving 20% of its London employees to Spain.
"This is a global industry and talent is mobile," said the chief executive of Barclays in yet another veiled threat, according to the Independent. "We need a level playing field to make sure that we can compete with the best companies in the world."
But those threats are empty, the Times writes. Where are the bankers going to move? London is out. France is looking to enact a similar tax, and Germany and others could also follow suit.
"It would make little sense for bankers to move halfway around the world to Singapore to avoid a one-off tax that would not affect future bonuses," the Times writes.
A windfall tax on bankers’ bonuses would not be enough, but it would be a start. The government also needs to ensure that all banks reform their compensation practices to better align rewards with performance, good and bad. That is the best hope for curbing bankers’ unbridled appetite for risk.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Bill Stiritz has experienced an estimated $145 million in paper losses on his investment in the company.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.