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Italy approves 40% windfall tax on banks for 2023 as profits soar

theguardian.com

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Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#41

Post by brmgb »

gruez wrote: post #30
brmgb wrote: post #3

Unsurprisingly, highly regulated sectors like banking where entering is extremely hard display cartel like behaviors. There is no incentive coming from the competition so why would anyone lower the net interest margin. In this context, I think a windfall tax somehow makes sense. Then again, I'm pretty sure it's going to be misused by the government. I would much rather see regulation forcing banks to raise interest r…

>Unsurprisingly, highly regulated sectors like banking where entering is extremely hard display cartel like behaviors. There is no incentive coming from the competition so why would anyone lower the net interest margin. In this context, I think a windfall tax somehow makes sense. Then I'm not sure what the banking market is like in Italy, but in the US it's trivially easy to find banks that pay close to or above fed…

> I'm not sure what the banking market is like in Italy

Significantly less competitive than in the USA.

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#42

Post by boring_twenties »

gruez wrote: post #23
cykotic wrote: post #10

Earlier quoted context omitted.

It does not bother me. But I think there should be a min/max for how much wealth a person has. No one suffers from taxing windfall profits. Windfall , by definition, being unexpectedly high profits.

> No one suffers from taxing windfall profits. Windfall , by definition, being unexpectedly high profits. 1. This is objectively false. Shareholders of the bank suffer, because they get less profits. This may not be a crowd that solicits a lot of sympathy, but they still exist. 2. How do you feel about VCs and startups? Their entire business model is investing in 100 companies, knowing that 99 will fail but 1 will ma…

12.43% of SPY is financials. We are all bank shareholders.

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#43

Post by frandroid »

sdfghswe wrote: post #6

I dislike banks as much as anyone else. But does it bother anyone else to see rules changed around? Wouldn't it be a better approach to tell people/corporations how they're gonna be taxed?

They're not changing the rules of the game on Jane Public's family here. They're sur-taxing banks' already exorbitant profits. Oh no, the bankers bonuses will be 20% instead of 30%!

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#44

Post by FirmwareBurner »

gameman144 wrote: post #33
FirmwareBurner wrote: post #31

Earlier quoted context omitted.

>Shareholders of the bank suffer Won't someone think of the poor bank shareholders? /s

I mean, your parents and their 401k that holds all the money they're planning to retire on feels decently human and relatable to me.

I don't think 401k is a thing in Italy.

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#46

Post by bastardoperator »

nequo wrote: post #5
brmgb wrote: post #3

Unsurprisingly, highly regulated sectors like banking where entering is extremely hard display cartel like behaviors. There is no incentive coming from the competition so why would anyone lower the net interest margin. In this context, I think a windfall tax somehow makes sense. Then again, I'm pretty sure it's going to be misused by the government. I would much rather see regulation forcing banks to raise interest r…

> I would much rather see regulation forcing banks to raise interest rate on deposits Regulation that increases competition would be even better. It seems like that would be the underlying problem.

What kind of competition would you like to see in the banking sector? All banks look exactly the same from this vantage point...

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#47

Post by [deleted] »

tensor wrote: post #32

This is a bit strange as presumably interest rates were raised in the first place to prevent inflation. Turning around and scolding the banks for doing what the government wanted in the first place seems counter productive. Wouldn't redistributing these profits back to mortgage holders just undermine the raising of interest rates in the first place?

[deleted]

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#48

Post by fock »

gruez wrote: post #23
cykotic wrote: post #10

Earlier quoted context omitted.

It does not bother me. But I think there should be a min/max for how much wealth a person has. No one suffers from taxing windfall profits. Windfall , by definition, being unexpectedly high profits.

> No one suffers from taxing windfall profits. Windfall , by definition, being unexpectedly high profits. 1. This is objectively false. Shareholders of the bank suffer, because they get less profits. This may not be a crowd that solicits a lot of sympathy, but they still exist. 2. How do you feel about VCs and startups? Their entire business model is investing in 100 companies, knowing that 99 will fail but 1 will ma…

> knowing that 99 will fail but 1 will make astronomical returns. How would this work if there were windfall taxes?

the same way it works now: counterbalance losses with gains.

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#49

Post by rightbyte »

concinds wrote: post #37
madballster wrote: post #21

This is an old European disease. Corporate profits are often seen as an adverse result; of consumers being taken advantage of unfairly. Taxing excess profits beyond what are already high tax rates is popular amongst voters (e.g. see poll results in the UK, 2022). However, this lowers the appeal for new entrants to enter these markets to compete for these excess profits through better and more efficient products and s…

Your assumption, that if without these extra taxes, more banks would be created and the industry would become less concentrated, seems untrue. The banking industry seems to be becoming hugely concentrated in every Western country, regardless of windfall taxes.

Maybe the tax could be progressive to help smaller players? I dunno why only wage tax is progressively taxed.

Re: Italy approves 40% windfall tax on banks for 2023 as profits soar

#50

Post by gruez »

FirmwareBurner wrote: post #44
gameman144 wrote: post #33

Earlier quoted context omitted.

I mean, your parents and their 401k that holds all the money they're planning to retire on feels decently human and relatable to me.

I don't think 401k is a thing in Italy.

"401k" as in subsection 401(k) of the U.S. Internal Revenue Code might not be a thing in Italy, but personal pension/savings account probably is.
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