4 ms·

Your assumption, that if without these extra taxes, more banks would be created and the industry would become less concentrated, seems untrue. The banking indus

Your assumption, that if without these extra taxes, more banks would be created and the industry would become less concentrated, seems untrue. The banking industry seems to be becoming hugely concentrated in every Western country, regardless of windfall taxes.

rightbyte 3y ago
Maybe the tax could be progressive to help smaller players? I dunno why only wage tax is progressively taxed.
- gruez 3y ago
  >I dunno why only wage tax is progressively taxed. Companies are just groups of people. Why should a group of 100 people get taxed more than a group of 100,000 people? Progressive rates on wages make sense because it's applied to each person individually.
  - kevinventullo 3y ago
    Why should a group of 100 people get taxed more than a group of 100,000 people? It would be the other way around. This is in order to encourage the formation of new groups, which almost always start out small.
    - gruez 3y ago
      >This is in order to encourage the formation of new groups, which almost always start out small. If that's your goal, having slightly lower taxes is a terrible way of doing so. It's far better to address the barriers to business formation directly (eg. availability of capital, market power of incumbents, regulatory requirements). We want people to found new companies to produce a better product (eg. Tesla), not to chase some tax incentive.
  - staticman2 3y ago
    "Companies are just groups of people." The legal definition is certainly not "groups of people." Describing them in this folksy way is outright misleading.
    - gruez 3y ago
      Yeah there's a bunch of other stuff like limited liability and governance rules, but they're not really to the topic at hand which is why bigger companies should get taxed more.
  - scotty79 3y ago
    Because their capacity to exploit the market doesn't grow linearly with the number of eployees.
  - ilyt 3y ago
    Weird argument but okay, then increase tax past say 100k/employed person in company of revenue. Or tax on revenue once company becomes big enough. Taxing on income made sense to make investing into expansion a good thing, but those companies clearly don't need to be bigger, it seems to just make stuff worse and worse.
    - gruez 3y ago
      >then increase tax past say 100k/employed person in company of revenue. That would cover most professional services firms (eg. lawyers/accountants). I don't really see why they should be considered worse than a mcdonalds. >Taxing on income made sense to make investing into expansion a good thing, but those companies clearly don't need to be bigger, it seems to just make stuff worse and worse. TSMC brings in 73.67 billion/year in revenue. Equifax only brings in 5.12 billion/year. Which one is making stuff "worse and worse"? Surely there's a better metric than dollar amounts, which totally ignore the financial nature of the underlying industry?
  - AnimalMuppet 3y ago
    In an industry where "too big to fail" is a real thing, taxing bigger companies more seems perfectly reasonable. Not just a little bit - significantly more, even painfully more. Create some actual incentive for banks to not get that big.
    - MikeDelta 3y ago
      Banks have been trying to reduce their balance sheets and their risk-weighted assets, because of all the extra charges and reserves they need to keep. They cannot just get rid of a large of their customers like that and collapsing shareprice. In some businesses there is also a benefit in scale (like in trading), and there you see the US banks leading because they've had it. If you want the US banks to fully take over IB and corporate banking, definitely do tax the EU banks painfully more. Or tax every financial counterpart painfully more, so then eventually the customers pay much more for their loans because the financial system has become so expensive.
      - thewildginger 3y ago
        Putting banks out of business? Woah weird conclusion but I like it. This whole windfall tax sounds even better than I thought! The world of money existed before banks, it will exist after.
      - ABCLAW 3y ago
        This is misleading. Banks have capital sufficiency requirements following the implementation of the Basel 3 capital sufficiency framework. This has created an international growing market for bulk capital availability and reinsurance services. In short, due to international capital sufficiency regulations, there's now a market for excess regulatory capital. The attempt to prune low performing assets is due to a market as an alternative to low return on capital investments. It's not because of charges and overhead. Banks aren't worried about bad assets more than usual, they just have another arena to make money in now.
a-user-you-like 3y ago
Thanks to excessive regulation
- FreshStart 3y ago
  "Europe could look like the US" sounds to much like a threat nowadays..
- luuurker 3y ago
  ... which is there for a reason.
  - a-user-you-like 3y ago
    Excessive regulation doesn’t help if your law doesn’t have teeth. Plenty on laws on the books in the US, but I don’t see enough people prosecuted for 2008. And then the incentives are all wrong if you bail your buddies out anyway. Play with fire and the fed will bail you out is terrible.
danudey 3y ago
The opposition to these extra taxes runs surprisingly parallel to trickle-down economics. If we pass these windfall taxes and then use that money to help individuals who are struggling, those individuals then benefit; however, if we let all that money to go to the millionaire/billionaire shareholders, then there's a chance that, instead of adding it to the excess wealth they're already hoarding, they might decide to spend it on business or projects that they could already have afforded but didn't. Those businesses or projects could then theoretically create work opportunities which would then employ some more people, and maybe some of those people would be the people who are struggling, and maybe the pay would be a bit better than the market rate they're already getting paid for their labor for some reason and so they'd get paid a bit more, and maybe that would help them to struggle less. Didn't you ever think of that?!

rightbyte 3y ago

Maybe the tax could be progressive to help smaller players? I dunno why only wage tax is progressively taxed.

gruez 3y ago
>I dunno why only wage tax is progressively taxed. Companies are just groups of people. Why should a group of 100 people get taxed more than a group of 100,000 people? Progressive rates on wages make sense because it's applied to each person individually.
- kevinventullo 3y ago
  Why should a group of 100 people get taxed more than a group of 100,000 people? It would be the other way around. This is in order to encourage the formation of new groups, which almost always start out small.
  - gruez 3y ago
    >This is in order to encourage the formation of new groups, which almost always start out small. If that's your goal, having slightly lower taxes is a terrible way of doing so. It's far better to address the barriers to business formation directly (eg. availability of capital, market power of incumbents, regulatory requirements). We want people to found new companies to produce a better product (eg. Tesla), not to chase some tax incentive.
- staticman2 3y ago
  "Companies are just groups of people." The legal definition is certainly not "groups of people." Describing them in this folksy way is outright misleading.
  - gruez 3y ago
    Yeah there's a bunch of other stuff like limited liability and governance rules, but they're not really to the topic at hand which is why bigger companies should get taxed more.
- scotty79 3y ago
  Because their capacity to exploit the market doesn't grow linearly with the number of eployees.
- ilyt 3y ago
  Weird argument but okay, then increase tax past say 100k/employed person in company of revenue. Or tax on revenue once company becomes big enough. Taxing on income made sense to make investing into expansion a good thing, but those companies clearly don't need to be bigger, it seems to just make stuff worse and worse.
  - gruez 3y ago
    >then increase tax past say 100k/employed person in company of revenue. That would cover most professional services firms (eg. lawyers/accountants). I don't really see why they should be considered worse than a mcdonalds. >Taxing on income made sense to make investing into expansion a good thing, but those companies clearly don't need to be bigger, it seems to just make stuff worse and worse. TSMC brings in 73.67 billion/year in revenue. Equifax only brings in 5.12 billion/year. Which one is making stuff "worse and worse"? Surely there's a better metric than dollar amounts, which totally ignore the financial nature of the underlying industry?
- AnimalMuppet 3y ago
  In an industry where "too big to fail" is a real thing, taxing bigger companies more seems perfectly reasonable. Not just a little bit - significantly more, even painfully more. Create some actual incentive for banks to not get that big.
  - MikeDelta 3y ago
    Banks have been trying to reduce their balance sheets and their risk-weighted assets, because of all the extra charges and reserves they need to keep. They cannot just get rid of a large of their customers like that and collapsing shareprice. In some businesses there is also a benefit in scale (like in trading), and there you see the US banks leading because they've had it. If you want the US banks to fully take over IB and corporate banking, definitely do tax the EU banks painfully more. Or tax every financial counterpart painfully more, so then eventually the customers pay much more for their loans because the financial system has become so expensive.
    - thewildginger 3y ago
      Putting banks out of business? Woah weird conclusion but I like it. This whole windfall tax sounds even better than I thought! The world of money existed before banks, it will exist after.
    - ABCLAW 3y ago
      This is misleading. Banks have capital sufficiency requirements following the implementation of the Basel 3 capital sufficiency framework. This has created an international growing market for bulk capital availability and reinsurance services. In short, due to international capital sufficiency regulations, there's now a market for excess regulatory capital. The attempt to prune low performing assets is due to a market as an alternative to low return on capital investments. It's not because of charges and overhead. Banks aren't worried about bad assets more than usual, they just have another arena to make money in now.

a-user-you-like 3y ago

Thanks to excessive regulation

FreshStart 3y ago
"Europe could look like the US" sounds to much like a threat nowadays..
luuurker 3y ago
... which is there for a reason.
- a-user-you-like 3y ago
  Excessive regulation doesn’t help if your law doesn’t have teeth. Plenty on laws on the books in the US, but I don’t see enough people prosecuted for 2008. And then the incentives are all wrong if you bail your buddies out anyway. Play with fire and the fed will bail you out is terrible.

danudey 3y ago

The opposition to these extra taxes runs surprisingly parallel to trickle-down economics. If we pass these windfall taxes and then use that money to help individuals who are struggling, those individuals then benefit; however, if we let all that money to go to the millionaire/billionaire shareholders, then there's a chance that, instead of adding it to the excess wealth they're already hoarding, they might decide to spend it on business or projects that they could already have afforded but didn't. Those businesses or projects could then theoretically create work opportunities which would then employ some more people, and maybe some of those people would be the people who are struggling, and maybe the pay would be a bit better than the market rate they're already getting paid for their labor for some reason and so they'd get paid a bit more, and maybe that would help them to struggle less. Didn't you ever think of that?!