9 ms·

Italy shocks banks with 40 percent windfall tax for 2023

54 points by vladd 3y ago

memefrog 3y ago
Ah well if Italy is doing it, we all should. They manage their economy famously well. Do the banks get a "windfall subsidy" when they have bad years?
- greydius 3y ago
  Yes, but we call them bailouts.
  - rje99 3y ago
    touché
  - memefrog 3y ago
    The "bailouts" where the government bought shares in the banks and was repaid at a significant markup a few years later? Is that like "windfall taxes" where the banks buy shares in the government and get repaid later?
    - piva00 3y ago
      > Is that like "windfall taxes" where the banks buy shares in the government and get repaid later? If it helps society to be more productive in the long-term, yeah (in an indirect way)?
- sph 3y ago
  Oh won't somebody think of the banks? Where were you in September 2008?
- ffhhttt 3y ago
  > Do the banks get a "windfall subsidy" when they have bad years? Is that sarcasm? Cause yeah, they generally do…
- belter 3y ago
  "Emergency Economic Stabilization Act of 2008" - https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008 https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati... "Congress approves $700 billion Wall Street bailout" - https://www.nytimes.com/2008/10/03/business/worldbusiness/03iht-bailout.4.16679355.html https://www.nytimes.com/2008/10/03/business/worldbusiness/03... July 20, 2008 -> "...it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation..." - Henry Paulson November 20, 2008 -> "...We are working through a severe financial crisis caused by many factors, including government inaction and mistaken actions, outdated U.S. and global financial regulatory systems, and by the excessive risk-taking of financial institutions..." - Henry Paulson
  - memefrog 3y ago
    The US got paid back and then some. Not at all the same as an arbitrary ad-hoc tax on success. Should the Silicon Valley banks that have recently failed also pay a windfall tax? And if not, why tax success? Because it's clearly not a 'windfall' if it only goes to people that made good predictions and not ones that made bad predictions.
    - belter 3y ago
      > "...why tax success? " -> That is how Taxes are supposed to work.
  - Grum9 3y ago
    [dead]
- DarkNova6 3y ago
  You mean a bank that is "too big to fail" and has to be bailed out? No, never happened as far as I can remember.
2Gkashmiri 3y ago
so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?
- MrYellowP 3y ago
  It also implies a booming, healthy economy where more people want money to start businesses. Also, you can choose your tyrant. If the bank you're at offers you shitty deals, switch the bank. Nobody forces you to accept bad deals. By the way, do you have time to talk about this amazing money-doubling service I've created?
  - 2Gkashmiri 3y ago
    yes. i am indeed free to discuss the same with the current nigerian prince. (/s obviously)
  - toyg 3y ago
    > It also implies a booming, healthy economy where more people want.money to start businesses Lol, have you ever been to Italy...? Banks will not lend to you unless you're quite rich already. Catholicism says debit bad, and the country is pretty conservative as a whole. Italian banks making money implies two things: them screwing consumers (famously called literally "available cattle", il parco buoi, in local finance circles) and rich people getting richer.
    - ffhhttt 3y ago
      What does that have do with Religion? Most banks everywhere behave the same way..
      - bryanrasmussen 3y ago
        highly religious countries trend more conservative. Italy is a highly conservative country. Not sure if that explains their financial problems, probably not. on edit: An Italian coworker just pointed out he wouldn't say Italy was very conservative, which I guess in a lot of ways is true - especially when compared to U.S and some other countries. Maybe actually the 'Conservative' - 'Liberal' labeling doesn't work well in this case, for example Italians believe in free health care and in my experience do a better job at it than Denmark. In the U.S free health care is "anti-conservative"
DoingIsLearning 3y ago
I see some mentions of Spain and Hungary, what are the chances of contagion across governments? What about contagion to other sectors Oil & Gas? Retail players (P&G, Unilever, Nestle, Etc.)?
- toyg 3y ago
  UK half-heartedly tried with oil&gas, the companies largely found ways to avoid it.
  - boomskats 3y ago
    See, I would have phrased that as "the UK found ways for oil&gas companies to largely avoid the legislation before they half-heartedly tried to pass it".
Kiro 3y ago
This feels like the type of thing that every single person will cheer on but will have disastrous indirect effects that are hard to understand.
- Lolaccount 3y ago
  Oh, please ... I know bankers in my personal network actively boasting about how they're managing to the play the situation with interest rates to maximise profit without doing anything productive to achieve it. "We've never had it so good" ... Next up, the energy sector.
  - Kiro 3y ago
    That doesn't change my point. Those bankers are probably equally unaware of the actual long-term effects this will have. What I mean is that there are no easy fixes for anything and I'm always skeptical of any action driven by populism. The politicians know that people only care about the first stage of effects. With that said, I'm no different and I wish the same happened in my country. I am however aware that my feelings are short-sighted.
    - boomskats 3y ago
      > The politicians know that people only care about the first stage of effects. I think this is a slightly reductionist view, but the effect is the same and unpacking it here won't change anything. In the least snarky way possible, can anyone think of an example where capitalism promotes or encourages long-term thinking?
      - lockhouse 3y ago
        I have a great example of it! In 1759, Arthur Guinness signed a 9,000 year lease for his brewery. https://www.historydefined.net/how-the-guinness-brewery-signed-a-9000-year-lease/ https://www.historydefined.net/how-the-guinness-brewery-sign...
        3y ago
jahnu 3y ago
Already watered down to “ not exceed 0.1% of each bank’s total assets” https://www.theguardian.com/business/live/2023/aug/09/italy-revises-bank-windfall-tax-uk-five-years-lost-economic-growth-mortgages-interest-rates-business-live https://www.theguardian.com/business/live/2023/aug/09/italy-...
- globular-toast 3y ago
  That's a shame. They're absolutely terrified of knocking over the huge and comical house of cards, aren't they?
  - xwdv 3y ago
    Not really, there’s just nothing to gain from doing so and a lot to lose.
    - thefz 3y ago
      Oh please, sharks do not need your defense.
      - ttonkytonk 3y ago
        But we don't want the sharks to turn on us - it should be demonstrated that 1) they're not being cheated (or robbed) and 2) that their welfare is not being seriously compromised.
nomaD_ 3y ago
The idea that banks are private companies in any country is not entirely true. Everyone knows that if a reasonably big bank fails, governments will intervene to protect people's money. Banks are technically private but won't be valued as much without government protection. So, to some extent, it's not wrong for the government to tax them more than other private companies. However, a negative consequence of this tax it reduces the bank's incentive to lend money to small and risky companies/startups. This is equivalent to increasing capital gains to 40% - why invest in risky assets if I know I will ever only receive a small percentage of my profits (if any)?
- thewildginger 3y ago
  I hate this argument. Business owners don't say "40% taxable gains? Guess I will never make money again" It may surprise you but no matter the restrictions put on size of profit, people will still attempt to make a buck. All that changes is the strategies used and the amount of time REQUIRED to strategize. All of these things sound so horrible, but when most people all over the world won't ever be in a position to think about it, I'm less sympathetic.
mrcgnc 3y ago
Discussed here as well:
- mrcgnc 3y ago
  https://news.ycombinator.com/item?id=37049786 https://news.ycombinator.com/item?id=37049786
ttonkytonk 3y ago
If liberty can be sacrificed through conscription, why not property through taxes?
ChrisArchitect 3y ago
[dupe] More discussion over here: https://news.ycombinator.com/item?id=37049786 https://news.ycombinator.com/item?id=37049786

54 points by vladd 3y ago

Ah well if Italy is doing it, we all should. They manage their economy famously well. Do the banks get a "windfall subsidy" when they have bad years?

greydius 3y ago
Yes, but we call them bailouts.
- rje99 3y ago
  touché
- memefrog 3y ago
  The "bailouts" where the government bought shares in the banks and was repaid at a significant markup a few years later? Is that like "windfall taxes" where the banks buy shares in the government and get repaid later?
  - piva00 3y ago
    > Is that like "windfall taxes" where the banks buy shares in the government and get repaid later? If it helps society to be more productive in the long-term, yeah (in an indirect way)?
sph 3y ago
Oh won't somebody think of the banks? Where were you in September 2008?
ffhhttt 3y ago
> Do the banks get a "windfall subsidy" when they have bad years? Is that sarcasm? Cause yeah, they generally do…
belter 3y ago
"Emergency Economic Stabilization Act of 2008" - https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008 https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati... "Congress approves $700 billion Wall Street bailout" - https://www.nytimes.com/2008/10/03/business/worldbusiness/03iht-bailout.4.16679355.html https://www.nytimes.com/2008/10/03/business/worldbusiness/03... July 20, 2008 -> "...it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation..." - Henry Paulson November 20, 2008 -> "...We are working through a severe financial crisis caused by many factors, including government inaction and mistaken actions, outdated U.S. and global financial regulatory systems, and by the excessive risk-taking of financial institutions..." - Henry Paulson
- memefrog 3y ago
  The US got paid back and then some. Not at all the same as an arbitrary ad-hoc tax on success. Should the Silicon Valley banks that have recently failed also pay a windfall tax? And if not, why tax success? Because it's clearly not a 'windfall' if it only goes to people that made good predictions and not ones that made bad predictions.
  - belter 3y ago
    > "...why tax success? " -> That is how Taxes are supposed to work.
- Grum9 3y ago
  [dead]
DarkNova6 3y ago
You mean a bank that is "too big to fail" and has to be bailed out? No, never happened as far as I can remember.

2Gkashmiri 3y ago

so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?

MrYellowP 3y ago
It also implies a booming, healthy economy where more people want money to start businesses. Also, you can choose your tyrant. If the bank you're at offers you shitty deals, switch the bank. Nobody forces you to accept bad deals. By the way, do you have time to talk about this amazing money-doubling service I've created?
- 2Gkashmiri 3y ago
  yes. i am indeed free to discuss the same with the current nigerian prince. (/s obviously)
- toyg 3y ago
  > It also implies a booming, healthy economy where more people want.money to start businesses Lol, have you ever been to Italy...? Banks will not lend to you unless you're quite rich already. Catholicism says debit bad, and the country is pretty conservative as a whole. Italian banks making money implies two things: them screwing consumers (famously called literally "available cattle", il parco buoi, in local finance circles) and rich people getting richer.
  - ffhhttt 3y ago
    What does that have do with Religion? Most banks everywhere behave the same way..
    - bryanrasmussen 3y ago
      highly religious countries trend more conservative. Italy is a highly conservative country. Not sure if that explains their financial problems, probably not. on edit: An Italian coworker just pointed out he wouldn't say Italy was very conservative, which I guess in a lot of ways is true - especially when compared to U.S and some other countries. Maybe actually the 'Conservative' - 'Liberal' labeling doesn't work well in this case, for example Italians believe in free health care and in my experience do a better job at it than Denmark. In the U.S free health care is "anti-conservative"

DoingIsLearning 3y ago

I see some mentions of Spain and Hungary, what are the chances of contagion across governments? What about contagion to other sectors Oil & Gas? Retail players (P&G, Unilever, Nestle, Etc.)?

toyg 3y ago
UK half-heartedly tried with oil&gas, the companies largely found ways to avoid it.
- boomskats 3y ago
  See, I would have phrased that as "the UK found ways for oil&gas companies to largely avoid the legislation before they half-heartedly tried to pass it".

Kiro 3y ago

This feels like the type of thing that every single person will cheer on but will have disastrous indirect effects that are hard to understand.

Lolaccount 3y ago
Oh, please ... I know bankers in my personal network actively boasting about how they're managing to the play the situation with interest rates to maximise profit without doing anything productive to achieve it. "We've never had it so good" ... Next up, the energy sector.
- Kiro 3y ago
  That doesn't change my point. Those bankers are probably equally unaware of the actual long-term effects this will have. What I mean is that there are no easy fixes for anything and I'm always skeptical of any action driven by populism. The politicians know that people only care about the first stage of effects. With that said, I'm no different and I wish the same happened in my country. I am however aware that my feelings are short-sighted.
  - boomskats 3y ago
    > The politicians know that people only care about the first stage of effects. I think this is a slightly reductionist view, but the effect is the same and unpacking it here won't change anything. In the least snarky way possible, can anyone think of an example where capitalism promotes or encourages long-term thinking?
    - lockhouse 3y ago
      I have a great example of it! In 1759, Arthur Guinness signed a 9,000 year lease for his brewery. https://www.historydefined.net/how-the-guinness-brewery-signed-a-9000-year-lease/ https://www.historydefined.net/how-the-guinness-brewery-sign...
      - 3y ago

jahnu 3y ago

Already watered down to “ not exceed 0.1% of each bank’s total assets” https://www.theguardian.com/business/live/2023/aug/09/italy-revises-bank-windfall-tax-uk-five-years-lost-economic-growth-mortgages-interest-rates-business-live https://www.theguardian.com/business/live/2023/aug/09/italy-...

globular-toast 3y ago
That's a shame. They're absolutely terrified of knocking over the huge and comical house of cards, aren't they?
- xwdv 3y ago
  Not really, there’s just nothing to gain from doing so and a lot to lose.
  - thefz 3y ago
    Oh please, sharks do not need your defense.
    - ttonkytonk 3y ago
      But we don't want the sharks to turn on us - it should be demonstrated that 1) they're not being cheated (or robbed) and 2) that their welfare is not being seriously compromised.

nomaD_ 3y ago

The idea that banks are private companies in any country is not entirely true. Everyone knows that if a reasonably big bank fails, governments will intervene to protect people's money. Banks are technically private but won't be valued as much without government protection. So, to some extent, it's not wrong for the government to tax them more than other private companies. However, a negative consequence of this tax it reduces the bank's incentive to lend money to small and risky companies/startups. This is equivalent to increasing capital gains to 40% - why invest in risky assets if I know I will ever only receive a small percentage of my profits (if any)?

thewildginger 3y ago
I hate this argument. Business owners don't say "40% taxable gains? Guess I will never make money again" It may surprise you but no matter the restrictions put on size of profit, people will still attempt to make a buck. All that changes is the strategies used and the amount of time REQUIRED to strategize. All of these things sound so horrible, but when most people all over the world won't ever be in a position to think about it, I'm less sympathetic.

mrcgnc 3y ago

Discussed here as well:

mrcgnc 3y ago
https://news.ycombinator.com/item?id=37049786 https://news.ycombinator.com/item?id=37049786

ttonkytonk 3y ago

If liberty can be sacrificed through conscription, why not property through taxes?

ChrisArchitect 3y ago

[dupe] More discussion over here: https://news.ycombinator.com/item?id=37049786 https://news.ycombinator.com/item?id=37049786