How to solve bankers' bonuses

OK - let's cut through the bullshit...

Here's the problem : how do we solve the problem of bankers paying themselves fucking great bonuses whilst at the same time allowing them to carry on paying themselves fucking great bonuses?

Simples, init? This is how we do it :

The income tax rate at £100,000 plus is 50%

Employer's NHI contributions run at 12.8%

Corporation tax is payable on profits at 28% - which incidentally is too low!

What we do is this - we make bankers bonuses non-deductible when calculating corporation tax and subject to employers' NI whether they are paid in cash or not. This means all bonuses over £100,000 will return 90.8% to the country.

Frankly, we could put large company corporation tax back to 40% (which is where it was under Gordon), and leave small companies paying 20%. Then the taxpayer would get 102.8% - which is much more like it! So a £1m bonus would mean the recipent still gets £372,000 but the exchequer gets £1,028,000 in tax and NI.

Also this takes CT from big companies that can afford it and gives incentives to smaller companies who are stifled by it. So a boost for the economy and job creation as well...

So there you go Vince and George! Problem solved!

Got the balls to go for it?

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NHS Consultants' bonuses - Are they justified?

When our new coalition government looks for ways to save money in the NHS, perhaps we should be looking closely at the way the NHS Consultants' Merit Awards system works, and ask whether it is time for a review?

The following is taken from an article in the Sunday Times in 2008 :

"Figures obtained by The Sunday Times under the Freedom of Information Act suggest hundreds of NHS consultants earned more than £190,000 in the financial year ending in March – more than Gordon Brown – putting them in the top 1% of earners.

By contrast with highly paid workers in the private sector, who now face widespread unemployment, they also enjoy full job security.

Previously NHS consultants turned to private work for extra income. The figures show they can now more than double their basic salaries by sticking with the health service, thanks to bonuses inflated by incentives to meet government targets to cut waiting lists.

The generosity of the NHS towards its senior staff may anger patients who have recently been deprived of modern cancer or osteoporosis treatments because they have been deemed too expensive."

Here's the views of "Old Sawbones", our Consultant in the know :

"The prioritisation of resources available from the tax payer to fund health care in a world of increasing financial restraint becomes ever more important, and the contentious issue of consultants' distinction awards should be open to public scrutiny.

The present system appears to be more equitable and transparent than when I was appointed to a consultant post in 1975, at which time it had many features of an "old-boy network". Committees were dominated by previous recipients, and the whole procedure was shrouded in such secrecy that one often did not know who had an award, and often quite why .

Indeed, I can recall the dilemma of a newly appointed consultant who was threatened with not being considered for one, if he did not toe a particular medico-political line.

Of course, this would not and indeed could not happen today. However, whether these awards are justified is a subject that now requires an open debate. When I left the NHS, the committees set up to award the discretionary points, given as a preliminary to the more major awards, were more democratic and a real attempt was made to ensure that the process was as fair and objective as possible. I am sure this has evolved further.

It would be helpful however, if the public and the profession could be reassured that the procedure for awarding the major B, A and A+ awards was transparent, and that the magnitude of these awards is justified.

Clinical excellence may not always be easy to assess, and it can be invidious to compare one medical speciality with another, when the pressures and challenges may differ widely. Service redevelopment, administrative duties and medical audit appear to be popular themes, but how easy can it be to quantify dedication, compassion and exceptional commitment to patient care, without true 360 degree appraisal, including nursing staff input and patient feedback?

It may be that the public and the profession can be reassured that the assessment of merit is now a fair and objective process, without political patronage or sycophancy. Perhaps however, one is left with the feeling that it is a privilege to be a doctor, and the professional rewards of a well remunerated job should be sufficient to prevent a consultant from being attracted to what may be a more lucrative elsewhere."

I think it is clear that the system needs to be looked at again and that there is a clear understanding why these payments are made and how they are justified. Employing armies of managers to create and monitor arbitrary targets just to support a bonus system, simply doesn't cut it.

Performance related pay structures for doctors would seem to me to be contrary to the welfare of patients and wholly inappropriate...

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Bankers of the World Unite !

So what's all this fuss about banker's bonuses? - that's what I want to know!

When the Labour government came to power in 1997, it brought to an end the 13 years of Tory misrule where Thatcherism ruled and decreed that the people of this country should be empowered to go all out to achieve their ambitions in a spirit of entrepreneurial extravagence and innovation. The party that gave us the big bang and dot com boom had gone. Boom and bust economics would be no more. Things could only get better...

So what went wrong?

Well basically we fell for the marketing hype that so predominates the 21st century. Indeed it could be argued that "New Labour" was the driving force behind the new age of packaging and presentation. Certainly spin doctors like Alastair Campbell must take at least some responsibility for this phenomenom. Unfortunately, when you look carefully beneath the appealing image of the New Labour red rose, we see that underneath the fresh red petals there are just another stemful of pricks.

Despite its protestations of equal opportunity for all, Labour has actually done nothing to stem the culture of celebrity and greed that pervades our rotten society. Indeed, it has been reported that since Tony Blair left office, he has made over 6 million quid - mainly as far as I can see simply for being Tony Blair.

From personal experience, I have seen Gordon Brown as Chancellor expend vast amounts of time and energy in introducing penal new taxes for anyone self employed in this country whilst at the same time pronouncing that he wants to encourage new business and individual initiative. Labour has a pathological hatred of anyone self employed as it sees such people as being outside of the PAYE system and therefore avoiding tax. Perhaps we should remind him that the avoidance of tax is legal, whereas it is the evation of tax that is illegal. These definitions should perhaps be bourne in mind when looking at the thorny subject of MPs expenses?

The people not hated and pursued by Labour would however seem to fall into groups that are of benefit to them. Celebrities that support their party for example. Who can forget the memorable bad taste shown by Mr Blair at his Number Ten receptions in the early days of his government? Anyone recognisable who was prepared to be seen at these events was welcomed with open arms in the hope that our new PM would be seen as inclusive, hip and happening. Some of these notable celebrities have done very well in the honours lists - you know who you are...

More worrying in my opinion was the view of one such celeb who, after attending a dinner with the PM, commented that he expected the sharpest chisel in the toolbox to be his host and was rather concerned that that didn't seem to be the case. Bet he never got a gong in the New Year's honours list!

Also noticable is the growth of the Civil Service, now the home of many former self employed consultants and contractors forced out of business by Mr Brown's taxes into the haven of so called 'proper' jobs. Local Government has also grown noticably, especially in the Labour heartlands and marginal constituencies. To be fair, many of these areas were also those neglected by the Tories, presumably for the same reason - you put the public money into the areas where people vote for your party, and to hell with the rest!

So what about the bankers then I hear you say? Well, look at it this way : they all have proper jobs and are therefore caught by the PAYE system, so no escape there then. I suspect if they were self employed, it would be a different story - but they are not. Also, if the banks didn't pay these bonuses, their profits would go up and then they would spend loads of money on lawyers and tax specialists in order to avoid paying Corporation Tax. Anyone who thinks this doesn't go on should remember the fiasco of Enron not so many years ago. I think we all accept that this money is better going to the Revenue than to fat cat accountants.

I say let them carry on with their bonuses - as long as what they get up to is closely monitored - then take it all off them again with punitive tax rates. Those of you with long memories might remember the Investment Income Surcharge introduced by another Labour Chancellor called Dennis Healey to 'squeeze the rich until the pips squeek'. Now they are resurrecting this as a 'bonus tax'. Works for me!

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