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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

#101

Post by fluoridation »

zmnd wrote: post #61
tensor wrote: post #28

Earlier quoted context omitted.

Unfortunately the old American disease of not ensuring competition and instead passing regulation ensuring monopolies stay in power means the "problem" is not actual solved, and is in fact made worse.

> The US is home to over 4,700 FDIC-insured banks. It’s not far off from the EU, which has 5,171, but stop and consider that the EU consists of 27 countries. The UK currently has 365 banks, and Canada has 83

How silly. Per million people the US has 14.1 banks, which is only slightly more than the EU's 11.5. I don't really know what's up with the UK and Canada, but there's probably some economic variable I'm not considering.

Can you imagine if the number of banks per country was constant?

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

#102

Post by Nasrudith »

cykotic wrote: post #10
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?

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.

You would indeed suffer if your "windfalls" in your retirement accounts were taxed at a high rate.

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

#103

Post by inglor_cz »

bko wrote: post #75
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…

I think that's correct. I have a theory about bullshit jobs in highly regulated or profitable industries. Places like Google have a ton of employees that don't contribute anything but make work projects. Why don't they just cut the workforce in half? Because their profit margin would be too high. It's already 25% with all the bloat. Imagine if their profit margin shot up to 50%? They would likely be dragged in front…

I think the other HNer is closer to the truth: in a bureaucratic organization, the more people you manage, the more important you are.

So, basically, result of a status competition that comes from misalignment between the interests of the company and the interests of individual managers.

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

#104

Post by FreshStart »

a-user-you-like wrote: post #59
concinds wrote: post #37

Earlier quoted context omitted.

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.

Thanks to excessive regulation

"Europe could look like the US" sounds to much like a threat nowadays..

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

#105

Post by hnfong »

bushbaba wrote: post #91
bko wrote: post #75

Earlier quoted context omitted.

I think that's correct. I have a theory about bullshit jobs in highly regulated or profitable industries. Places like Google have a ton of employees that don't contribute anything but make work projects. Why don't they just cut the workforce in half? Because their profit margin would be too high. It's already 25% with all the bloat. Imagine if their profit margin shot up to 50%? They would likely be dragged in front…

Bullshit jobs are encouraged for management to grow their org into a promotion. These companies are growing so nobody really questions the bloat as making the wrong move might impact future growth (or cause your action to be blamed for growth miss).

Bullshit jobs are created for many reasons, I think you and GP are both right.

GP's point may not be obvious on the surface, but another way to look at it is, if for example the economy cools down and GOOG is pressured to maintain its profits, you can bet that management will decide to lay off even more people. In this sense it is just behaving as if it earns as much money as "expected" (by shareholders or the public, doesn't matter).

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

#106

Post by scotty79 »

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…

> Corporate profits are often seen as an adverse result; of consumers being taken advantage of unfairly.

What is it then?

I think it's a clear sign that competition doesn't work and savings were not passed to consumers. The thesis that competition will work eventually reeks of trickle down economics.

Such tax is just punishment for the lack of competition. It sends a message that if you are not going to compete for the customer then you can't keep the profits gained from your reluctance to compete.

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

#107

Post by gwright »

toyg wrote: post #24
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…

> see if competition takes care of the "problem". We have seen: for industries with big capital requirements or heavy regulatory frameworks (enacted for everyone's safety), it just doesn't .

Irrespective of the the benefits and/or feasibility of competition to bring prices down, the larger problem with this ad-hoc windfall profit tax is that it is ad-hoc. This is changing the rules after the game has started.

The article reports the effort as a "surprise tax".

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

#108

Post by gruez »

staticman2 wrote: post #92
gruez wrote: post #69

Earlier quoted context omitted.

>I dunno why only wage tax is progressively taxed. Companies are just groups of people. Why should a group of 100 people get taxed more than a group of 100,000 people? Progressive rates on wages make sense because it's applied to each person individually.

"Companies are just groups of people." The legal definition is certainly not "groups of people." Describing them in this folksy way is outright misleading.

Yeah there's a bunch of other stuff like limited liability and governance rules, but they're not really to the topic at hand which is why bigger companies should get taxed more.

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

#109

Post by Silhouette »

jntvjnvutnuvt wrote: post #60
toyg wrote: post #24

Earlier quoted context omitted.

> see if competition takes care of the "problem". We have seen: for industries with big capital requirements or heavy regulatory frameworks (enacted for everyone's safety), it just doesn't .

Which industries with big capital requirements don't have competitors?

Banking! If there are meaningful competitors then that implies there is meaningful competition. But many financial services firms have been making huge windfall profits by creating a wide interest rate spread even though they would still be (very) profitable with much lower spreads and their customers have a clear incentive to go with a competitor offering a better interest rate. So clearly there is not effective competition in this market.

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

#110

Post by MSFT_Edging »

jntvjnvutnuvt wrote: post #97
Hamcha wrote: post #71

Earlier quoted context omitted.

In the US: ISP & Healthcare

Most Americans have access to AT&T, Verizon and T Mobile. They also have a choice of insurance plans and healthcare providers.

But will their choice of health insurance provider be accepted at the hospital an ambulance took them to? Who knows but for that person, its time to play bankruptcy roulette.
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