The 90% bonus tax lives

It's happened. Following the furore after we divulged that AIB was planning to pay bonuses it had withheld since 2008, the Irish government has succumbed to pressure and is again planning to tax all bonuses at banks in receipt of government support at a rate of 90%.

Earlier this week the Irish bonus tax proposals were

shelved in order to pass the finance bill quickly. However, as of yesterday the Guardian says they've been revived.

This isn't the first time a 90% bonus tax has been floated. In early 2009, US Congressmen proposed a 90% tax on bonuses at banks receiving TARP payments. In 2010, US senators proposed a 50% tax on bonuses at TARP houses. Neither came to anything.

If, as now seems likely, the 90% tax goes ahead in Ireland, it could set an unfortunate precedent for people campaigning for similarly punitive taxes elsewhere.

Bonus taxes are politically very popular, but so far only the UK has introduced one of any weight. Needless to say, that 50% tax expired last year. Ed Miliband is campaigning for its reintroduction. Events in Ireland may encourage him to do so more enthusiastically.