Britain will not copy President Barack Obama's tax on banks that were bailed out by the taxpayer, Treasury chief Alistair Darling said in an interview published Saturday. Obama is proposing a tax of 0.15 percent on the liabilities of large financial institutions in a bid to recoup at least $90 billion spent rescuing the sector from collapse. Darling told The Scotsman newspaper that Britain was not considering a similar plan.
"No, we are not," he was quoted as saying. "The Americans are doing something different." Instead, Britain is imposing one-off 50 percent levy on bank bonuses above 25,000 pounds ($40,700). It has also introduced a new 50 percent tax rate for top earners.
The British government took stakes in the banks it bailed out, forking out some 850 billion pounds in taxpayer money, substantially more than the cost of US intervention. Darling said Britain would recoup the money by selling those stakes at the right time though he acknowledged that was "some years" away.
On Friday, London Mayor Boris Johnson warned that thousands of high-earning bankers would flee London because of the government's tax on bonuses. New York Mayor Michael Bloomberg said Obama's tax plan poses a similar threat to Wall Street. Prime Minister Gordon Brown acknowledged Saturday that the levy on bonuses "has caused us huge difficulties because people then say 'well, why shouldn't I move to another country?"'
He called on other countries to implement a similar bonus tax to make the policy more effective. "What we are trying to do is make sure that we do not pay anything and this is the same as Obama for the rescue of the banks," Brown told a conference of the center-left Fabian Society.