Wednesday, January 28, 2009

More on Wall Street Bonuses

New York State has presented this chart to highlight the massacre that was also known as bonus season. Silver lining (not for NY) - banks wont have to pay taxes "for years to come" due to $31.4 billion in tax credits.

Some other points from the report:
  • The average bonus declined by 36.7 percent to $112,000 in 2008. The decline in the average bonus was smaller than the decline in the bonus pool because the pool was shared among fewer workers as the industry shed jobs.
  • The reduction in Wall Street bonuses will cost nearly $1 billion in personal income tax revenues for New York State and another $275 million for New York City. Before the start of the financial crisis, business and personal income tax collections from Wall Street activities accounted for up to 20 percent of State tax revenues and 12 percent of City tax revenues.
  • Employment in the securities industry in New York City declined from 187,800 in October 2007 to 168,600 in December 2008, a loss of 19,200 jobs, or 10.2 percent.
  • At the beginning of 2008, there were seven major financial firms headquartered in New York City. Since then, two have been acquired, one failed, and two converted into commercial banks.
  • A review of the 2008 year-end statements of the major financial firms headquartered in New York City (the Merrill Lynch acquisition was completed in 2009) showed a tax credit of $31.3 billion for 2008, which will reduce the firms’ future tax payments for years to come.
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