After much humming and ha-ing last week,t he Government has managed it seems to gather up the guts to get tough with the banks, in the form of taxing their profits.
Governments love tax, especially ones so profligate with their own money. Banks it is true are producing lots of money right now as they squeeze their borrowers with higher rates and have no interest to pay to savers.
Should the Government take this route then? There is little to be said in favour of bankers recently and I think this route is a better one than stopping the bonus' directly which would maim our own taxpayer stake in RBS.
In taxing the UK clearing banks as a whole and only on profits, this is more like the Conservative proposal of a windfall tax.
However, I do see a slight flaw. One way to avoid paying tax is not to make any profits. So why not, instead of making profits, go and make some huge transaction in Europe or the US and make no profits this year. Still there would be bonus' for other staff, but no taxes on the corporate entity. That is the issue with high tax rates - people and companies find ways to avoid them.
So who will be most happy this weekend, tax advisers like KPMG, that's who!