Goldman sacks bonuses

http://www.bloomberg.com/apps/news?pid=20601087&sid=aXKFa5Ml.47s&pos=1
 
I actually think this is probably quite significant in the scheme of things.
Having been mocked, reviled and ridiculed now that times are really tough, it was ever divined that they should lead the rest of the rabble by example.

All very tongue in cheek, coming from me. But when you consider that the Goldman model has been adopted by just about every Thomas, Richard and Harold (perhaps in a similar vein to the now extinct Ford model, obviously for different reasons and in a different world) they were always going to be the ones to get leaned on by the Special One in the suit.
 
As far as the UK’s PBR and its ramifications are concerned, firms were already looking at ways to minimise the impact of any punitive measures and were considering a number of options including increasing bankers’ salaries in return for reducing the bonus element of their pay, beefing up benefits (such as paying school fees) and reclassifying bankers as consultants, thereby making them self-employed businessmen, oops sorry, persons, and escaping any banker tax.
 
Banker tax – I love it
 
In fact, one Asian City bank is believed to have already allocated at least two years’ worth of bonuses in the past few weeks. And the big four accountants and magic circle law firms, that charge up to £600 an hour for advice on two-steps-ahead-of-the-Revenue tax avoidance schemes, had long since set up teams of experts in anticipation of studying the Chancellor’s proposals.
So, the upshot of dear Darling’s announcement, as one rubber-of-hands-together has already stated, “has nothing to do with reducing the public spending deficit, and it may well be contrary to Human Rights legislation as it is unprecedented in the sense that never before has a UK government sought to levy a special tax relating to individuals working in a particular sector.”
 
All in all, there has been much ado about nothing, it’ll likely prove difficult to gauge how much tax the measure will actually raise, as considerable time and effort will be expended by bankers to get round it. The Treasury has better prospects of looking foward to increased revenue from the considerable time equating to billable hours involved for all concerned.

One serious note though. Jamie said yesterday that ”traders fear the UK banking sector could be badly hurt by the combination of EU heavy-handedness and punitive tax policies, permanently killing the UK’s golden goose. It was a fun 25 years while it lasted…”

That’s the contradiction neatly summed up in a nutshell really.