Thursday, December 10, 2009

Bonus Tax

The "moralization of capitalism" has been given a symbolic fillip by Sarkozy's decision to tax banker bonuses 50% this year only. Since Britain took this step previously, Sarko feels safe in following suit: he doesn't risk losing financial services business to the City. On the other hand, he also promised yesterday "never" to reconsider his broadening of the tax shield for the wealthy. It seems that the moralization of capitalism is sometimes a deterrent to excess and at other times a disincentive to animal spirits. Trust the government to know which is which.

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