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Really the aspect which taxes in theory should be "biased" towards is accounting for externalities positive and negative. If mines, banks, or any other industry

Really the aspect which taxes in theory should be "biased" towards is accounting for externalities positive and negative. If mines, banks, or any other industry risks needing expensive public remediation they /should/ be taxed more than mere profit margins. If they cannot afford it - well that is the point neither can we. In practice it is a complete mess of special interests paying money to insist that the government's highest priority should be getting people to drink more Ovaltine. The issues of that tax code are systemic but that level of abstraction is seldom understood.

stakhanov 7y ago
Well: The bonus tax wasn't actually a tax on the amount of risk-taking that a bank was doing (with the understanding that some of that risk would land on the government balance sheet because of the too-big-to-fail effect). It was neither designed to be that, nor was the income that the exchequer earned from that in any way related to what it costs the government to cover that risk. It could be argued that by discouraging remuneration models whereby decision makers share in profits (and therefore also in downside risks), this tax might have even had the opposite effect of increasing risk-taking by increasing moral hazard. So, really, what it was was plainly and simply: "Here are a bunch of people who are disliked by the majority of the electorate. Therefore, let's have them give us some money." EDIT: This was the story I was talking about: https://www.nytimes.com/2009/12/10/business/global/10pound.html https://www.nytimes.com/2009/12/10/business/global/10pound.h...