Bankers are not cost efficient...

Kennyboy66

julieq wrote: »

Banking sector contributes £58B in tax, 11% of the total. Year in, year out.

If you don't think that's worth having because of a couple of Daily Mirror headlines, then good luck to you but you're not going to get much of an NHS if it goes. This bank bashing is insane, and it's getting increasingly hysterical.

It is the financial services sector - not the banking sector that contributes those numbers.

The financial services sector includes

asset management
insurance
investment banks
Retail and commercial banks
Building societies.


The tax collected has declined in the last 18 months and the Price Waterhouse report acknowldeges that many of the banks have tax losses to carry forward that will reduce corporation tax for years to come.

In addition many of the taxes are collected by the banks but are actually paid by their employees or customers (employment taxes, VAT where applicable and Insurance premium tax, stamp duty on shares).
Analagous to businesses saying they pay VAT - in the vast majority of cases they don't, they just collect it on behalf of HMRC - it is the end customer who pays it.

Don't let the facts get in the way of those who wish to deflect blame from the likes of Fred Goodwin et al though.

Kennyboy66

chewmylegoff wrote: »

T

The cost in cash terms is something like £120 billion I think. Even if we ultimately lose all of that it is only 2 years tax revenue from the sector. The article has been written from an anti banking view point deliberately taking the short term worst possible view.

Clearly banks have not behaved well, and we all know what has happened, it is largely a matter of record. This is not the same as the financial services sector being a net detractor from our economy in the long term.

While the £120 bn in cash is correct, what is not included is

1) the opportunity cost in that the banks are lending less to productive business becuase the banks spunked it up the wall.

2) the cost of QE (which we will lose money on, when we sell the gilts purchased) and it effect on inflation.

It's a rubbish article - but I'm sursprised that no one has pointed out that UK manufacturing is still larger than financial services.

despite the fact that we "don't actually make anything anymore".

When was the last time a politician (of any party) went into bat for manufacturing or don't they pony up enough political donations ?

chewmylegoff

I don't think it's really valid to claim that because the taxes are deducted from employee salaries they should not be considered to be taxes raised from the banking sector. Clearly if banks didn't exist neither would those payroll taxes (including the employers NI).

Derivative

Surely it's disingenious to look at the worst period in the last seventy years or so for the financial industry and claim this statistic.

It would be like claiming hospitals kill more than they save during an MRSA scare. True? Could be. Helpful statistic? No.

JasonLVC

http://www.neweconomics.org/sites/neweconomics.org/files/A_Bit_Rich.pdf

This is the report from 2009 (The Mirror at the cutting edge of reporting still!)

I argued on the other thread that hopsital cleaners inability to clean between 2005-2010 led to increase in MRSA and so are directly responsible for many hundreds of deaths in hospitals, rendering their 'benefit' to society as much less than the report suggests.

Of course, the report chose not to look at the negative impact a cleaner had on the NHS, the report just looked at their positive contribution, much like the report ignored the positive effects of bankers, such as allowing people to borrow money and pay it back over 25 years (its called a mortgage;))

drc

Generali wrote: »

Bailing out companies in a Capitalist world makes as much sense as screwing for virginity (to misquote many an old hippy). That includes banks and their creditors (below a limit that will allow people to continue to eat, pay bills etc.

Exactly. But it's not Capitalism if companies and banks are being bailed out. So a lot of the people that are criticising "Capitalism" are wrong because this isn't Capitalism. Real Capitalism would have let these companies/banks fail.

FTBFun

Kennyboy66 wrote: »

It is the financial services sector - not the banking sector that contributes those numbers.

The financial services sector includes

asset management
insurance
investment banks
Retail and commercial banks
Building societies.

IME these are lumped in with "the bankers" because homogenity is a nice lazy way to think.

The tax collected has declined in the last 18 months and the Price Waterhouse report acknowldeges that many of the banks have tax losses to carry forward that will reduce corporation tax for years to come.

This is the same as any company that makes losses - Thomas Cook (assuming it doesn't go under) won't be paying much corporation tax for a while now.

In addition many of the taxes are collected by the banks but are actually paid by their employees or customers (employment taxes, VAT where applicable and Insurance premium tax, stamp duty on shares).

That's not really suprising though - in businesses whose "machinery" as it were is human capital payroll taxes are likely to be the greatest source of the tax take from that particular business. As employee salaries are an expense for corporation tax purposes this is often why you see a relatively slim amount of corporation tax for these businesses.

You've left out employers NIC btw (which is uncapped at 12.8% nowadays, hardly anything to be sniffed at).

Analagous to businesses saying they pay VAT - in the vast majority of cases they don't, they just collect it on behalf of HMRC - it is the end customer who pays it.

I don't know who says that, but yes they would be wrong.

Don't let the facts get in the way of those who wish to deflect blame from the likes of Fred Goodwin et al though.

Or let facts get in the way of those who blame the entire crisis on those nasty bankers.