An alternative to a windfall tax on banks

The government is now trying to work out some sort of windfall tax on banks, which is a bit daft - they shouldn't have bailed them out in the first place, but we are where we are.

Now, as we all well know, people defend The Worst Tax Of All, i.e. VAT, by saying a) It is borne by the consumer and doesn't hurt the producer; b) It is simple to administer and c) It doesn't drive businesses abroad. All of this is completely wrong, but people will insist of believing things that aren't true.

So why not slap a quasi-VAT on banks? Ask them to increase the interest rates they charge by 15% and hand that over. The borrowers won't have any problem paying that extra, will they? Just like the consumer doesn't mind paying 15% extra on a car, a cinema ticket or clothing?

So that's all dandy. 15% of an average interest rate of 6% on outstanding household borrowings of £1,400 billion would mean revenues of about £12.6 billion.

What's not to like?