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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

#181

Post by niux »

solumunus wrote: post #168
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…

Spoiler: it doesn’t. Also, I’m in Europe and my bank gives me better deals on savings than any American bank offers.

What bank are you using?

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

#182

Post by spacebanana7 »

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…

> This is an old European disease.

Permanent high taxes are better than unpredictable windfall taxes.

It's very difficult to budget for the future when you don't know how much tax you're paying by a binary order of magnitude. When industry specific, it can create perverse incentives for outsourcing.

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

#183

Post by predictabl3 »

FirmwareBurner wrote: post #165
gruez wrote: post #50

Earlier quoted context omitted.

"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.

With that logic we should never prosecute corporations doing nefarious things, because that might hurt their profits which will hurt those who's retirement funds depend on said $EVIL_CORP. "Go ahead BP and VW, keep polluting the world, we're not gonna touch you because we don't want your shares to go down and in turn the retirement funds of those tied to you." Am I the one seeing the slippery slope here, or am I bein…

No, you're not. This whole subthread is sycophantic.

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

#184

Post by throw0101a »

all2 wrote: post #78
bastardoperator wrote: post #46

Earlier quoted context omitted.

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

The fractional reserve system and its associated fiat currencies will always drive "banking" as a service in the same direction: loans that become increasingly predatory. The root problem isn't the banks, per se, rather the problem is the underlying system that modern banks are incentivized by. Remove usury (loans at a profit) and base the national currency on something (anything is better than nothing, but the Socia…

> The fractional reserve system

The fractional reserve system does not exist:

> Fractional reserve banking is the idea that banks take their reserves and lend them into some fraction based on the quantity of reserves they hold. This idea has been largely debunked since the financial crisis. In reality, banks do not lend their reserves, except to one another inside of the reserve system (which is a closed system, ie, reserves don’t even leave the system). They don’t even lend based on the quantity of reserves they hold.

* https://www.pragcap.com/what-is-fractional-reserve-banking/

* https://www.pragcap.com/r-i-p-the-money-multiplier/

* https://research.stlouisfed.org/publications/page1-econ/2021...

Some countries don't even have reserver requirements:

* https://en.wikipedia.org/wiki/Reserve_requirement#Countries_...

Tobin called the relending of deposits the "Old View" in 1963:

* https://ideas.repec.org/p/cwl/cwldpp/159.html

> Remove usury (loans at a profit) and base the national currency on something […]

There was more instability in the US under the gold standard than in the recent (7+) decades under fiat:

* https://www.theatlantic.com/business/archive/2012/08/why-the...

* https://archive.is/FWKcL

And if you think fiat encourages financial speculation, and the gold standard reduces it:

* https://en.wikipedia.org/wiki/Panic_of_1873

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

#185

Post by throw0101a »

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…

> 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 services.

And how many de novo banks have there actually been in any country recently? In the US, the land of plenty (banks), there's been one in the last twenty years.

Bloomberg's Odd Lots podcast just had an episode on this (including the topic of de novo):

* https://www.youtube.com/watch?v=8lPFHWgxq5c

Banking is low margin, and it takes decades to get any kind of return: few, if any folks, have the patience for that kind of ROI when there are alternatives.

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

#186

Post by cykotic »

robocat wrote: post #180
cykotic wrote: post #144

Earlier quoted context omitted.

I made an edit to my comment above. It may explain more my position. We live in a society and there aren winners/losers in a financial sense. But we all have to live together. That 10 people have as much wealth as 150 million people is obscene and immoral. Taxing such wealth to use for the betterment of us all is right, just, and sound policy. Obviously we disagree on this. I hope your view does not win out in the lo…

> there aren winners/losers in a financial sense That sounds like zero-sum thinking. I believe that if you think of the world using zero-sum thinking (that winners are balanced by losers), you will end up with a very skewed view.

I said nothing of the sort nor implied anything of the sort. In a financial sense, winners=rich and losers=poor. This has nothing to do with zero sum.

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

#187

Post by gruez »

FirmwareBurner wrote: post #165
gruez wrote: post #50

Earlier quoted context omitted.

"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.

With that logic we should never prosecute corporations doing nefarious things, because that might hurt their profits which will hurt those who's retirement funds depend on said $EVIL_CORP. "Go ahead BP and VW, keep polluting the world, we're not gonna touch you because we don't want your shares to go down and in turn the retirement funds of those tied to you." Am I the one seeing the slippery slope here, or am I bein…

> With that logic we should never prosecute corporations doing nefarious things, because that might hurt their profits which will hurt those who's retirement funds depend on said $EVIL_CORP.

Nobody claims this. My initial comment was only pointing out that the claim that nobody will be harmed by the windfall tax was false.

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

#188

Post by scotty79 »

acyou wrote: post #148
scotty79 wrote: post #126

Earlier quoted context omitted.

> How does a bank efficiently re-invest? Banks that have more money then they need for operation just indulge more in gambling.

Banks gambling in the form of credit made available to other businesses would be ideal. That's what makes everything keep ticking along. What we should be concerned about is profit taking and thereby exchanging working assets and capital for idle cash on hand.

They'd sooner invent few new classes of dervatives you can't loose on (on paper) and gamle with them than do what you suggest or anything in any way beneficial for that matter.

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

#189

Post by ABCLAW »

MikeDelta wrote: post #149
AnimalMuppet wrote: post #139

Earlier quoted context omitted.

In an industry where "too big to fail" is a real thing, taxing bigger companies more seems perfectly reasonable. Not just a little bit - significantly more, even painfully more. Create some actual incentive for banks to not get that big.

Banks have been trying to reduce their balance sheets and their risk-weighted assets, because of all the extra charges and reserves they need to keep. They cannot just get rid of a large of their customers like that and collapsing shareprice. In some businesses there is also a benefit in scale (like in trading), and there you see the US banks leading because they've had it. If you want the US banks to fully take over…

This is misleading. Banks have capital sufficiency requirements following the implementation of the Basel 3 capital sufficiency framework. This has created an international growing market for bulk capital availability and reinsurance services.

In short, due to international capital sufficiency regulations, there's now a market for excess regulatory capital. The attempt to prune low performing assets is due to a market as an alternative to low return on capital investments.

It's not because of charges and overhead.

Banks aren't worried about bad assets more than usual, they just have another arena to make money in now.

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

#190

Post by ABCLAW »

bko wrote: post #67
webdood90 wrote: post #40

Earlier quoted context omitted.

I didn't think it was possible but banking shills apparently exist > If one wants free enterprise and reap its benefits who wants this from banking??? > one has to allow high profits for companies and see if competition takes care of the "problem" ah, yes - we've seen this work so many times before!

I don't know. I kind of like competition in banking. I like free checking, ATM fee reimbursement, better customer service, better websites and apps, better alerting etc. You get that through competition for my deposits.

Interac is a great example of the opposite. The government of Canada had to strong arm the financial sector to create a non profit third party to allow zero cost transfers and a robust debit payment system. The banks have been lobbying to dramatically increase interchange and transaction fees on Interac payments for years to allow for an expansion in lucrative 'premium' credit card processing fees.

Competition did nothing to stop industry alignment against consumer interests.

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