Families hit twice as hard as banks

Families are to contribute twice as much as the banks to bringing down the deficit. The finding makes a mockery of George Osborne’s desire to “extract the maximum sustainable tax revenues from financial services”.

The Treasury is expecting to bring in £2.4 billion from the bank levy by 2014-15 but the Guardian today reveals that “it was yet to agree on the actual rate at which the levy would be imposed” while banks will be given a £20 billion allowance below which they will not be taxed.

The final figure will be offset by the corporation tax cut from 28% to 24%. The Guardian reports:

“When the levy was first floated in June’s emergency budget, analysts calculated that a planned cut in corporation tax to 24% from 28% would negate the impact of the levy and that some banks, such as state-backed Lloyds Banking Group and Royal Bank of Scotland, could actually stand to gain from the tax changes.

“The Treasury was adamant last night that this would not be the impact at an industry level and produced figures that showed, for instance, in 2014-15, the corporation tax costs being £0.4bn, compared with a bank levy yield of £2.4bn.”

But the £0.4bn figure could be an underestimate. The Treasury expects the corporation tax cut to cost £2.7bn by 2014-15 while the City of London estimated last year that financial service companies paid 27.5% of total corporation tax paid in the UK economy. If the ratio were maintained, the industry would benefit to the tune of £0.74bn. That total would bring the bank contribution to fiscal consolidation down to £1.65 billion – less than half the £3.6bn net reduction in child benefit and tax credits announced on Wednesday.

Labour MP for Streatham and Treasury Select Committee member, Chuka Umunna, said:

“In the Comprehensive Spending Review, there were no new measures to ensure that those who caused the crisis pay their fair share towards paying down the deficit and the draft bank levy legislation published today falls far short of the decisive action we need and is an insult to those losing benefits and local services.

“Not only is the rate at which the bank levy applies too low but we learn now that the tax will not be levied on the first £20 billion of these banks’ liabilities, gifting them somewhat of a reprieve.”

We’re all in this together? Hardly.

http://twitter.com/bethwatbrad/status/28382703544 Bethany W-Bradley

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/sarah_loves_tea/status/28382794545 Sarah P

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/vicaringroo/status/28382816324 Andy

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/rattlecans/status/28383097179 Ma

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/swsportsnews/status/28383150209 southwestsportsnews

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/john_gillibrand/status/28383201441 John Gillibrand

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/liberationlover/status/28383277980 Annie B

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/liberationlover/status/28383322040 Annie B

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/davidtaylor85/status/28383618479 David Taylor

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/johnedginton/status/28383622168 John Edginton

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/mog666/status/28383691106 Morgan Dalton

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/red_sfandy/status/28383731431 Andy Bean

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/miamiamidori/status/28384023134 Carina

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/butternotguns/status/28384050089 Butter Not Guns

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/markco1983/status/28384650836 Mark Cornelius

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/tulipsiddiq/status/28385011396 Tulip Siddiq

Good article- RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/samtarry/status/28385759907 Samuel Tarry

RT @TulipSiddiq: Good article RT @leftfootfwd: All in this together? Not when families are hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/davemsund/status/28386493692 dave m

RT @FalseEcon: RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/t1mmyb/status/28386497910 Tim Beadle

RT @FalseEcon: RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/frdragonspouse/status/28386510210 Jill Hayward

RT @OtherTPA: RT @FalseEcon RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/sarateresaphoto/status/28386536511 Sara Teresa

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/aafiuj
http://twitter.com/the_don_/status/28386597716 Harry Harris

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/chuzzlit/status/28386607056 Alison Charlton

RT @OtherTPA: RT @FalseEcon RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/bigsamthetim/status/28386669226 cowan88

RT @OtherTPA: RT @FalseEcon RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/sector29/status/28386920478 Sector29

“@leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R”
Ed

Its a shame that this analysis hasn’t factored in the total treasury income resulting from not smashing the banks. I suspect that it would be considerably lower with higher banker taxes. Taking away the asthetic notion of fairness- bash the bankers!- isn’t it far more in families interests to have maximum revenues going to the treasury? Granted there will be a debate on how that is spent, but I can’t beleive that Government taking in less money is somehow progressive…
http://twitter.com/dontmindwaiting/status/28387347018 jennifer roberts

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/johnnycov/status/28387576304 John Coventry

RT @OtherTPA: RT @FalseEcon RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/spacecadetrik/status/28388103383 Richard Bryce

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/itscreativecafe/status/28388503528 Jill Goble

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/itscreativecafe/status/28388541517 Jill Goble

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/aafiuj
http://twitter.com/leloveluck/status/28389011413 Louisa Loveluck

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/hsramdnih/status/28389117386 Jon H

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/goodoldmj/status/28389132095 Martin Johnston

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/celynwales/status/28389538473 Celyn

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/scottie_dtfc/status/28389707437 Richard Scott

All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/rowenna_davis/status/28390211899 Rowenna

Blogs are exposing just how regressive the budget was – see excellent @LFF http://tiny.cc/yapurq06av and @nextleft http://tiny.cc/muqkm8k9dq
http://twitter.com/c_a_jonestechno/status/28391609859 CAROLE JONES

Families hit twice as hard as banks http://bit.ly/9M1l2R
http://twitter.com/c_a_jonestechno/status/28391611917 CAROLE JONES

Families hit twice as hard as banks http://lnk.ms/DRlsB
http://twitter.com/roseymainvein/status/28391692112 Claire Rose

Progressive? Fair? No. RT @leftfootfwd Families hit twice as hard as banks http://bit.ly/9M1l2R #fb
http://twitter.com/dogandbone1/status/28392270784 digby

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R
http://twitter.com/shlomopines/status/28392641505 Shlomo Pines

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/chukaumunna/status/28392910471 Chuka Umunna

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/paulnez/status/28394747531 Paul Nezandonyi

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
Mike Thomas

And the lovely income tax for all those bankers getting huge bonuses?

£7bn in bonuses…. £4.2bn in tax to the Government.
http://twitter.com/jossgarman/status/28396071983 Joss Garman

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/aafiuj
http://twitter.com/rattlecans/status/28396166745 Ma

RT @jossgarman: RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/aafiuj
http://www.stephenwigmore.blogspot.com Stephen W

It’s good to see you admit that the Financial services industry pays around £20 billion in taxes directly and £20 billion indirectly through wages paid to their employees.

Can we now please drop this nonsense about the bankers not paying their share? Just out of interest how much taxes do the poorest 10% of our society pay? I’d be willing to bet considerably less than £40 billion (and rightly so).
http://twitter.com/wanderer_68/status/28396759757 Alain

RT @jossgarman: RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/aafiuj
http://twitter.com/kinell88/status/28398484025 Ell Aitch

RT @leftfootfwd: Families hit twice as hard as banks http://bit.ly/9M1l2R
http://raincoatoptimism.wordpress.com/2010/10/22/george-osbornes-risky-business/ George Osborne’s risky business « Raincoat Optimism

[...] Duncan / ConservativeHome / BBC / Left Foot Forward Possibly related posts: (automatically generated)More market fundamentalism than [...]
Tony

Simplistic and populist comment that degrades what otherwise might have been valid.

Bashing the bankers might have them cheering but it fails to address the issues and is very blinkered.
http://twitter.com/wikio_uk/status/28422326370 Wikio UK

Families hit twice as hard as banks : http://wik.io/DQXId
http://twitter.com/annapannalondon/status/28423744738 Anna Nolan

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://thoughcowardsflinch.com/2010/10/22/how-low-can-they-go/ How low can they go « Though Cowards Flinch

[...] I attended the debate last night, and on your point regarding your exchange with an audience member, she asked a question to the panel on why the word “fairness” has been used to describe the spending review when civil servants, the poor and the disabled are being hit disproportionately to those with the broadest shoulders – which relates to the point that families will be hit twice as hard as the banks. [...]
http://raincoatoptimism.wordpress.com/2010/10/22/how-low-can-they-go/ How low can they go « Raincoat Optimism

[...] I attended the debate last night, and on your point regarding your exchange with an audience member, she asked a question to the panel on why the word “fairness” has been used to describe the spending review when civil servants, the poor and the disabled are being hit disproportionately to those with the broadest shoulders – which relates to the point that families will be hit twice as hard as the banks. [...]
Mr. Sensible

It is the government who is giving us populist rhetoric to make it look like the banks are paying, when the reality is rather different.
http://twitter.com/cllrvickymd/status/28481922694 Victoria MacDonald

RT @leftfootfwd: All in this together? Not when families are hit twice as hard as the banks http://bit.ly/9M1l2R #CSR
http://twitter.com/rebeccaking3030/status/28482155430 rebeccaking3030

RT @CllrVickyMD: RT @leftfootfwd: All in this together? Not when families are hit 2x as hard as banks http://bit.ly/9M1l2R #CSR
http://twitter.com/andrewroche/status/28551336835 Andrew Roche

Just read: Families hit twice as hard as banks http://dlvr.it/7Rpq7
http://www.leftfootforward.org/2010/10/imf-reaction-to-banking-levy/ Osborne’s banking levy fall short of IMF benchmark | Left Foot Forward

[...] any banking tax in Britain to be set at £6 billion. Last week, Left Foot Forward highlighted the socially regressive nature of the £2.5bn tax which will mean banks contributing 50 per cent less than families (child [...]
http://rayhanhaque.wordpress.com/2010/11/18/osborne%e2%80%99s-banking-levy-falls-short-of-imf-benchmark/ Osborne’s banking levy falls short of IMF benchmark | rayhanhaque

[...] any banking tax in Britain to be set at £6 billion. Last week, Left Foot Forward highlighted the socially regressive nature of the £2.5bn tax which will mean banks contributing 50 per cent less than families (child [...]