Bankers Bonuses …….

OK I can’t avoid it any more here we go – bankers, bonuses, and all that …..

I don’t intend to get into the discussion about the morality of all this except to say that it appears that the accepted wisdom is :

To make the poor work harder pay them less – to make the rich work harder pay them more – THIS IS WRONG.

Now I would like to make two suggestions, They are a bit radical, and I’m sure people will say they are impractical, but I’m not so sure. For what they are worth, here they are. By the way I have sent them to the government but they have yet to comment.

1 – An income tax rate of 90% on salaries higher than 52 x the minimum wage.

At current rates this would represent a salary of about £650,000 per annum. Now that is pretty good pay by most people’s standards, though it is much lower than some people earn, The link to the minimum wage has important consequences.

Firstly it means that the rich and powerful would have powerful incentive to raise the earnings of the poorest in society instead of abandoning or ignoring them.

Secondly it means that those who want to make more than that have to be happy to say that “A week of my life is worth more than a year of yours” or perhaps even more telling “A year for me is worth more than your entire life!”

I should point out that I don’t think this should apply to GENUINE entrepreneurs. Those people risk their own money on investments. If it goes wrong they actually lose money. The bankers also invest and gamble, but with our money, if it all goes wrong they lose nothing. Even if they get sacked they will probably leave with a huge payout for the severance of their contract. They are in fact on a one way bet.

One of the usual arguments against these sort of ideas is that these people will just go abroad. Thats where idea number two comes in

2 – If you are a UK citizen you should pay UK income tax – wherever you happen to live or work.

A few words about how this might work. Say you are working in the UK and earning about 50k and you get offered a job in Dubai at 250k. Under the proposed system you would live and work in Dubai, pay your local Dubai taxes, and then pay UK income tax on the rest. This might seem a bit unfair but, presumably, at some point you intent to return to the UK and enjoy all the benefits of citizenship. Also, think about a couple of the things we you pay taxes for.

The NHS – The NHS often pays for treatment abroad and if you return to the UK for treatment it would still be free.

The armed forces – if you get in trouble where you are the diplomats and armed forces will move heaven and earth to get you out. The war in Afghanistan is being fought on all our behalfs wherever we live (whether you agree with it or not)

Some will say it is impractical and would be expensive to administer. Rubbish all that is required is that people do an annual tax return which is as easy to do from abroad as it is from home.

If you don’t want to pay the tax then give up your UK citizenship and when you want to come back we’ll see how you stack up against the criteria for immigration!

OK I’m sure none of this will ever happen but I am really just making a couple of points of principal

  • While there are people who think one of their years is worth more than another man’s whole life we will never be “All in this together”
  • British citizenship is a great privilege and the least we, who enjoy it, can do is pay our taxes, willingly and honestly, wherever we are living and working for the moment
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