Canadian Finance Minister Jim Flaherty Says ‘No’ to Proposed International Tax on Bank Bonuses

The Finance Minister of Canada, Jim Flaherty, is rightly rejecting proposals from some leaders of the G8 for an international tax on bank bonuses, as he’s not interested in ‘punishing’ those who work in a highly profitable Canadian industry.

Referring to the misguided decisions by British and French officials to tax bank bonuses at a 50 percent rate, Flaherty told reporters, “We want to grow Canada as a financial center, so we don’t want to impose punitive taxes on anybody.”

As a matter of fact, for some reason the Wall Street Journal allowed its pages to be used to promote this anti-business drivel, as highly unpopular British Prime Minister Gordon Brown and French President Nicolas Sarkozy wrote an article in the publication trying to press other countries to also impose this draconian tax on bankers in their countries as well.

The reason why they are ignorantly doing this is because the stupidity in making the decision in the first place puts banks within their countries at a disadvantage, as top employees will migrate to banks and other financial institutions which don’t implement the foolish tax.

In other words, they’ve screwed themselves by trying to gain domestic political brownie points, and now they’re attempting to salvage their own banking industries by pressuring other countries to follow suit.

The European duo said in their pathetic article that banking reform must be done globally in order to succeed. What they mean by that is other countries need to implement the outrageous tax in order for them not to stand out as economic morons. There’s no nice way to put it, they’re ignorant and trying to ride what they perceive as a populist wave to further their political careers.

Gary Townsend, a former federal banking regulator for fifteen years agrees with this assessment, saying that Brown and Sarkozy have no interest in fixing the compensation practices at banks, but in only building up political capital domestically. “I hope we understand that we have politically motivated politicians who fear they’re going to lose their jobs in 2010,” said Townsend.

Canadian banks have actually been quite healthy, and haven’t received any bailout money from the taxpayers, showing other governments had no need to do it either. Now that they have, they’re attempting to create penalties for bankers in order to draw attention away from their horrendous policies and interference in markets.

Thankfully Canada and other countries are standing against this outrageous behavior.