David Kirkpatrick

January 19, 2010

Taxation temperature? Cold days ahead for the financial industry

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 3:45 pm

And given the performance of the financial industry, coupled with some massive public relations missteps and populist uprising looking to put at least a few banker’s heads on pikes for a Main Street parade, it’s a pretty safe bet when D.C. goes looking for new money banking and financial services will be the most public targets.

Here’s a breakdown of seven potential tax changes coming this year. Over half target the financial industry.

From the link:

Tax banker bonuses more

The populist fury unleashed when bonuses were paid to AIG executives is back. This time it’s during bonus season on Wall Street, where investment banks are expected to distribute tens of billions of dollars to reward their employees for the banks’ 2009 performance.

House Financial Services Chairman Barney Frank, D-Mass., will hold a hearing on Wall Street compensation next week. On the agenda will be consideration of bonus taxation, as well as President Obama’s proposal to tax banks to make up for any bailout money that isn’t repaid.

Frank’s committee doesn’t write tax law. That’s up to the House Ways and Means and the Senate Finance committees. But he is beating the drums for change.

“I think compensation has gotten excessive,” Frank said in a statement. “I want to underline what we are already doing. Frankly, in the hope that maybe the Senate will be even more inclined to [act].”

So don’t be surprised if talk of a banker bonus tax is revived. But it’s not clear how viable it would be. “That’s more politics than policy,” Schwarz said.

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