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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

#121

Post by ilyt »

gruez wrote: post #69
rightbyte wrote: post #49

Earlier quoted context omitted.

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

>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.

Weird argument but okay, then increase tax past say 100k/employed person in company of revenue.

Or tax on revenue once company becomes big enough. Taxing on income made sense to make investing into expansion a good thing, but those companies clearly don't need to be bigger, it seems to just make stuff worse and worse.

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

#122

Post by xmonkee »

gwright wrote: post #107
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 .

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".

its not a “game”. Its the people of Italy legislating whats best for the people of Italy. This is what government is. You are pre-supposing a capitalist framework where private enterprise should compete with the people. You could alternatively think of private enterprises being allowed to exist at the pleasure of the people. And that is the way it should be. People are real, companies are fiction.

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

#123

Post by scotty79 »

megaman821 wrote: post #18

Windfall taxes and bailouts aren't the policies that create a healthy banking sector. Instead they should worry about crafting better regulations and having competition for where people's savings go.

Ideally you make things more fireproof. But that's not an argument for not putting out things that are in flames at the moment.

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

#124

Post by gruez »

kevinventullo wrote: post #93
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.

Why should a group of 100 people get taxed more than a group of 100,000 people? It would be the other way around. This is in order to encourage the formation of new groups, which almost always start out small.

>This is in order to encourage the formation of new groups, which almost always start out small.

If that's your goal, having slightly lower taxes is a terrible way of doing so. It's far better to address the barriers to business formation directly (eg. availability of capital, market power of incumbents, regulatory requirements). We want people to found new companies to produce a better product (eg. Tesla), not to chase some tax incentive.

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

#125

Post by ilyt »

bko wrote: post #94
gowld wrote: post #83

Earlier quoted context omitted.

That causes lower profits, so won't be affected by windfall tax.

Maybe they won't but new competitors will see the outsized profits and try to get my business by offering these things. I have all these things at my bank (TD) so the system seems to work. This is pretty uncontroversial basic economics...

How often you see "new competitors" in banking come up now ?

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

#126

Post by scotty79 »

acyou wrote: post #96

Do we levy windfall taxes on farmers after a bumper crop harvest? No, because we assume the profits will be reinvested. How does a bank efficiently re-invest? Does taking profits mean efficient reinvestment? I dont think so. It just means inflation. Windfall taxes just grow the big government. More cost to be directly passed on to consumers at the end of the day. If we don't like capitalism, why not just say we want…

> How does a bank efficiently re-invest?

Banks that have more money then they need for operation just indulge more in gambling.

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

#127

Post by ilyt »

scotty79 wrote: post #106
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 t…

Well, exactly right.

The competition only works if competitors are willing to give consumer a better deal, and if moving between competitors is easy enough.

But if they decide "well, media say there is inflation so we have excuses to rise prices far higher than actual rise of costs", well...

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

#128

Post by gwright »

xmonkee wrote: post #122
gwright wrote: post #107

Earlier quoted context omitted.

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".

its not a “game”. Its the people of Italy legislating whats best for the people of Italy. This is what government is. You are pre-supposing a capitalist framework where private enterprise should compete with the people. You could alternatively think of private enterprises being allowed to exist at the pleasure of the people. And that is the way it should be. People are real, companies are fiction.

Just because it was accomplished via a "legislative process" doesn't automatically make it a good idea. Surprise laws are a bad idea in any economic system IMHO. It isn't even a "capitalist" issue.

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

#129

Post by gwright »

gwright wrote: post #128
xmonkee wrote: post #122

Earlier quoted context omitted.

its not a “game”. Its the people of Italy legislating whats best for the people of Italy. This is what government is. You are pre-supposing a capitalist framework where private enterprise should compete with the people. You could alternatively think of private enterprises being allowed to exist at the pleasure of the people. And that is the way it should be. People are real, companies are fiction.

Just because it was accomplished via a "legislative process" doesn't automatically make it a good idea. Surprise laws are a bad idea in any economic system IMHO. It isn't even a "capitalist" issue.

And of course it isn't a "game". That is a figure of speech to make a point about fairness.

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

#130

Post by boringg »

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…

I mean the VC model seems kind of broken these days. Second growth/market penetration/new product related profits are different from windfall profits so it's not quite the same though I see what you are trying to do is frame it in an SV start-up viewpoint.
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