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Updated: December 10, 2009 15:55 IST

Brown and Sarkozy call for global tax on bonuses

DPA
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A file photo of Gordon Brown
The Hindu A file photo of Gordon Brown

French President Nicolas Sarkozy and British Prime Minister Gordon Brown on Thursday called for the imposition of a global tax on the bonuses banks pay to its executives and traders.

“We agree that a one-off tax in relation to bonuses should be considered a priority, due to the fact that bonuses for 2009 have arisen partly because of government support for the banking system,” the two leaders said in an editorial published in the Wall Street Journal.

The bonus is to be imposed within “a long-term global compact” between the banks and the societies they serve, “that will encapsulate both the responsibilities of the banking system and the risk they pose to the economy as a whole.” Among other proposals, this compact “ensures financial institutions cannot use offshore tax havens to negate the contribution they justly owe to the citizens of the country in which they operate,” the two men wrote.

The economic crisis has led to the awareness that the economy is global, not national. As a result, Mr. Brown and Mr. Sarkozy said, “it is clear the action that must be taken must be at a global level.”

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