steepholm

Simply obscene! :o(

And the answer the tories have for this?

Screw the middle classes even harder..................

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It's worth noting that neither David Tepper nor Tiger Woods are British, nor do they live in Britain, so they wouldn't be affected by changed to British tax law in particular.

Indeed, it's interesting that the BBC chose to start their large-scale income comparisons with people whose income has no direct affect on this country.

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The context of the article was the gap between high earners and low earners in general, rather than in this country particularly. However, they certainly might have extended the diagram in the opposite direction, showing how vastly more a nurse in Britain earns than, say, a field worker in Zimbabwe. But then, they'd still wanted to include Tepper, they'd have needed something like this.

A side issue is that, while Tepper's income has no direct effect on this country, it has a very strong indirect one, since the reason bankers invariably use to justify their large salaries is that they must take account of the going international rate, or else have their brains drain away like in a zombie movie.

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owlfish

That's exactly why I used "direct" there. It may well have other indirect effects, if he regularly buys expensive products from here, for example. Or hires British nationals to work for him in various capacities which retain their residency and thus their taxability in this country.

I was more specifically responding to the idea that the current UK government needs to do something about taxing someone not under their jurisdiction. (Much as, for governmental income purposes, they might wish he were.)

Brain drain: I'm struggling to imagine the U.S. as a giant zombie. (But that might just be me.) Perhaps more a collector of brains-in-a-jar?

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lamentables.livejournal.com

In the context of an article about hedge fund managers, entitled 'Masters of the universe: meet the world's best-paid men' the comparisons make complete sense.

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owlfish

I agree! (Not that all hedge fund managers are anywhere near that rich.)

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He might go elsewhere if we don't pay him.

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Let's hope he is paying plenty of tax to the US IRS.

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lamentables.livejournal.com

'wad-blob' perfectly encapsulates the obscenity of it all

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kalypso-v.livejournal.com

The top salaries are all about dick-measuring, aren't they? I just wish they'd think of some other means of measurement.

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I suppose they could measure their dicks.

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A hedge fund manager is not really a banker in the strict sense. He invests people's money and makes a huge profit for his clients as well as for himself. He is probably working on commission and not on a salary as we would understand it, so the whole of his salary would depend on his performance. If that is a reasonable cut of what the hedge fund is making, what is he supposed to do with it?

He could be giving a big cut to charity, we don't know. He could be acting as a business angel to new start-up companies that are providing jobs to people like us. We don't know. That figure does not say. No doubt what he does is of more use to the world than what a golfer or a footballer does.

The media is prone to simplifying.

Edited Date: 2011-02-03 02:37 pm (UTC)

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I don't really see the big difference between what you describe and what an investment banker does, except perhaps in the method of remuneration and the proportions of salary/commission (or salary/bonus, in the case of bankers). In both cases the performance-related part often dwarfs the basic salary.

I've written before about why I think this is an unreasonable system, as currently operated, so I won't repeat that now. As for the other point, though - yes, all these rich people can give money to the poor or use it to create jobs, etc. (I don't know that hedge fund managers are actually more likely to do this than sportsmen, mind.) And some of them actually do it, on a grand scale. Nevertheless, in general the trickle-down model of redistributing wealth has been proved an utter failure over the last twenty years, if we measure it (as seems reasonable) in terms of the increasing gap between rich and poor. Given that, I'd have to say that there's something more fundamentally wrong with the system than is likely to be cured by hoping that men who have devoted their lives to making themselves extremely rich will start giving it all away.

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OK, so you don't like the system we have now (I am not SO keen myself). What would you do to change it, and what do you think the "unintended consequences" might be?

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Historically (I'm a historian for my sins) the rich paid no taxes and the burden fell entirely upon the poor (in the absence of anything like a recognisable middle class before say the mid 17th century-perhaps it's no accident that the first recognisable 'revolution of the bourgouisie' according to Marxist theory, can be said to occur with what is generally knowen as the 'English Revolution'.

The burden now appears to be falling ever more heavily on the middle with a reaonsable enough recognition that the least well off should receive help. The real scare as an unintended consequence will be when the middle classes decide to take the view 'why should we bother?' Otherwise, they begin to take the posturings of the far right seriously as was the case in Holland for a time up to the death of one particularly charismatic rightist leader.

It does leave the wealthy increasingly looking as if they are not pulling their weight.

Someone once said: 'Fight poverty. Eat the rich'.

Maybe they had a point? :o/

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Two things. One is obvious: reform the tax system so that exponentially high earnings are offset far more than at present with tax rates that reflect the work they actually do. (As rule of thumb, I don't think that anyone in an organization should be taking home more than 5 times what anyone else in the organization does.) Secondly, I would rein in the whole bonus/commission culture, and expect bankers to work (as most people do) primarily for wages. No one seems to think that I, as a teacher, need a bonus in order to be persuaded to turn up and do the job for which I'm paid professionally and conscientiously: I don't see why bankers should be considered incapable of this. Again, when I earned my university a £175,000 grant from the EU a couple of years ago, there was no suggestion that I should be given a cut. It would have been nice, of course, but I didn't expect it as my due. Getting grants like that is part of my job.

Having said that, I'm not entirely against bonuses and incentives, if they really do reflect good work and not, as often seems to be the case in banking, the underlying state of the economy (it's easy to make money in a bull market). But, as I argued in the post I linked to earlier, bonuses should not be a proportion of the money that you have "made", any more than particularly productive bakers should have their bonuses paid in bread - but rather a proportion of salary, or a fixed amount.

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I blogged on this too. http://veronica-milvus.livejournal.com/328349.html

The problem is that any such rules would have to be world wide or the bankers would just up sticks and relocate to another jurisdiction which was less draconian. Then we would lose all the tax revenue they provide.

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That is indeed a problem, but I'm actually quite sceptical as to how much of one. First, part of the problem is that these individuals don't provide that much tax revenue (a 50% top tax rate is ridiculous, and a good accountant and a well-structured bonus package can reduce it further). Also, I'm not convinced that they are quite as irreplaceable as they would like us to believe. (To take up the Premiership footballer analogy, the time was when Eric Cantona was seen as irreplaceable. Also, Ruud van Nistelrooy, Jap Stam, David Beckham, etc etc. None of them was.)

But of course, the banks as a whole could up sticks. Perhaps some would. But, while it would be a painful cold-turkey to reduce our dependence on the City, I believe it was historically a huge mistake to let either the banks as institutions or the bankers as individuals get to a position where they could hold the rest of us to ransom, as they have been doing for these last few years. An addiction's not an easy thing to break, in the long run it's generally healthier.

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It has been estimated that between 11% and 25% of CORPORATION tax in the UK is provided by companies in the Financial sector. (Income tax doesn't matter too much because there are actually not so many people on £1 million bonuses, maybe a few hundred.)

Besides, we own a couple of banks so it is in our interests for them to do well.

You are right about the need for UK PLC to diversify away from Financial Services. Mrs Thatcher et al believed that we could never make money out of manufacturing as long as the Chinese could make things cheaper. It seems not to be particularly true.

In fact "diversify your portfolio" is the first rule of investment.

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It has been estimated that between 11% and 25% of CORPORATION tax in the UK is provided by companies in the Financial sector.

Did you happen to catch this headline today? It would seem to cast pretty serious doubt on that estimate.

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Yes. Their argument was that this was an atypical year in which they made very little of their profit in the UK. A more normal contribution from them is between £1 billion and £2 billion.

They are of course taxed in other countries on the profits they make overseas.

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There was a documentary on BBC World Service a couple of weeks back which concluded that, in fact, they were pretty unlikely to relocate and so far few of them have. (lack of vacancies elsewhere was one issue, language barriers another, the general hassle of relocating, but it was about three in the morning with my trying to get to sleep rather than listening and taking notes. I wish I could remember more details.)

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The company I work for is relocating to Switzerland for tax reasons. I lose my job on June 1st. so, sorry if I don't buy your argument.

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I'm sorry to hear that about your job - I only report what a business documentary said.

Although there is also a difference between companies moving head office - presumably minimising corporation and business taxes - and individual bankers/fund managers moving location to a place where they individually paid less tax.

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It isn't generally about personal income tax, it is about rates of corporation tax, that what drives these companies overseas.

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And my feeling would be - if they did relocate - good riddance, I'm afraid. Partly due to the ongoing dubious investments, but also I suspect that there's an easier access for them to offsetting tax and avoiding it.

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... and they don't need vacancies to go to. They just move the entire office and do what they did in London, but somewhere else.

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karinmollberg.livejournal.com

Nurses must not be paid to generously. They may come to think they would work for money and lose all their altruism.

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endlessrarities.livejournal.com

Oh, dear. After nine years of dedicated study, I don't even make it onto the diagram!!

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Come on, you're obviously not trying hard enough!

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endlessrarities.livejournal.com

I'm not SUPPOSED to be in it for the money. Being a devout aesthete type was great when I was in my twenties. Unfortunately I've grown out of this mindset, but it's a bit late now, isn't it???

Archaeology. A career in ruins, alright.

Look on the bright side... I actually benefit from the Condem's tax changes in April. WOW!!!

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Aye! Nobody ever got rich researching and writing history either!

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Well, there's David Starkey... *ducks*

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Hmmmm.......bloody royalist!

Thinks....where's me axe?

Maybe I should have said academic history rather than popular history :o)

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And to think he was raised a Quaker....

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Yup! Quite disgraceful- a betrayal of all James Nayler stood for. A propos, It's nice to see him still quoted in QFP even though there are Friends who find him somewhat embarrassing! :o)

If you've not read William Brittles' 'James Nayler' or Leo Damrosch's: 'The Sorrows of the Quaker Jesus' I'd recommend them.

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