Goldman Sachs have decided to postpone paying their staff a bonus until after 5th April so that the government will only take 45% of it instead of 50%. The result is a cacophony of rage from the media. Even the Daily Mail, a supposedly right-of-centre paper, talks about a bankers' "plot" to delay the bonus until the 50% tax band is abolished, and its headline talks of "Taxpayers risk losing millions." Hang on a minute!
Firstly, we the taxpayers, are not losing millions. The Treasury might be, but so what? Why should we have any sympathy with George Osborne's men being a bit short of cash when they can't control government spending? When Labour were booted out in 2010, I looked forward to a drop in public spending. Some hope - it has gone up even more. There's plenty of scope for cutting it - no benefits for non-British citizens, cut the wasteful foreign aid budget (far too much of which ends up in the pockets of unsavoury third-world dictators), scrap HS2 (or get private industry to stump up the money), abolish QUANGOs, leave the EU...I could go on, but I think I've made the point.
Secondly, it's not as if Goldman Sachs' staff are going to put their bonuses in a bag and hide them under the bed. Just suppose you or I were given the average bonus of £250,000. What would we do with it? Perhaps we might move to a bigger house. In this case, we would require as a bare minimum the services of an estate agent, a solicitor, a surveyor and a removal firm. All these workers would be paying tax on the work they did for us. If instead we decide to renovate our existing house, the builders who did the work would be paying tax on their earnings and the building materials would be subject to VAT, so the government would get its cut with this option too. Even if we blew it on a flash car, the construction, delivery and sale of that vehicle has provided work for a few individuals who will be taxed on their earnings, although admittedly if that car happened to be a Porsche or a Lamborghini, as far as construction goes, it will be a foreign exchequer which benefits.
In all probability, quite a few of these privileged individuals will give some of their bonuses to a charity. I have met very few rich people, but I will say that in my experience, those with whom I have had some contact are generous souls who tend to keep quiet about their generosity. When you read about the wonderful response to this or that appeal, in many cases, some wealthy individual has made a very substantial donation indeed. To quote one example near to where I live, the Gloucestershire-Warwickshire Railway, a heritage line in the Cotswolds, found itself some £8,000 short of funds after an appeal to repair a collapsed embankment, one visitor to the line heard of their plight, and wrote out a cheque to cover the shortfall. He (or perhaps she) asked to remain anonymous.
Although the Bible informs us that the love of money is the root of all evil, this does not imply that rich people are somehow intrinsically wicked. Look at Abraham or Job, for instance. In reality, one of the worst manifestations of this "evil" love of money is an insane jealousy of wealthy people. Instead of being inspired by success, socialists want to penalise it, tax it, and in doing so, drive the most able and the most entrepreneurial out of the country. When François Hollande announced his plan to riase the top rate of income tax to 75%, a number of wealthy Frenchmen left the country. Some have come to Britain, and no doubt the decision to scrap the 50% top rate of tax made the UK appear a more favourable location for French exiles.
In only one area am I "jealous" of wealthy people, and here I am referring to the generous wealthy. It is their ability to choose where the bulk of their charity goes, as their private generosity may well top their tax liabilities. I wish I could likewise choose who could be the principal recipients of my generosity, rather than the state deciding for me.
Firstly, we the taxpayers, are not losing millions. The Treasury might be, but so what? Why should we have any sympathy with George Osborne's men being a bit short of cash when they can't control government spending? When Labour were booted out in 2010, I looked forward to a drop in public spending. Some hope - it has gone up even more. There's plenty of scope for cutting it - no benefits for non-British citizens, cut the wasteful foreign aid budget (far too much of which ends up in the pockets of unsavoury third-world dictators), scrap HS2 (or get private industry to stump up the money), abolish QUANGOs, leave the EU...I could go on, but I think I've made the point.
Secondly, it's not as if Goldman Sachs' staff are going to put their bonuses in a bag and hide them under the bed. Just suppose you or I were given the average bonus of £250,000. What would we do with it? Perhaps we might move to a bigger house. In this case, we would require as a bare minimum the services of an estate agent, a solicitor, a surveyor and a removal firm. All these workers would be paying tax on the work they did for us. If instead we decide to renovate our existing house, the builders who did the work would be paying tax on their earnings and the building materials would be subject to VAT, so the government would get its cut with this option too. Even if we blew it on a flash car, the construction, delivery and sale of that vehicle has provided work for a few individuals who will be taxed on their earnings, although admittedly if that car happened to be a Porsche or a Lamborghini, as far as construction goes, it will be a foreign exchequer which benefits.
In all probability, quite a few of these privileged individuals will give some of their bonuses to a charity. I have met very few rich people, but I will say that in my experience, those with whom I have had some contact are generous souls who tend to keep quiet about their generosity. When you read about the wonderful response to this or that appeal, in many cases, some wealthy individual has made a very substantial donation indeed. To quote one example near to where I live, the Gloucestershire-Warwickshire Railway, a heritage line in the Cotswolds, found itself some £8,000 short of funds after an appeal to repair a collapsed embankment, one visitor to the line heard of their plight, and wrote out a cheque to cover the shortfall. He (or perhaps she) asked to remain anonymous.
Although the Bible informs us that the love of money is the root of all evil, this does not imply that rich people are somehow intrinsically wicked. Look at Abraham or Job, for instance. In reality, one of the worst manifestations of this "evil" love of money is an insane jealousy of wealthy people. Instead of being inspired by success, socialists want to penalise it, tax it, and in doing so, drive the most able and the most entrepreneurial out of the country. When François Hollande announced his plan to riase the top rate of income tax to 75%, a number of wealthy Frenchmen left the country. Some have come to Britain, and no doubt the decision to scrap the 50% top rate of tax made the UK appear a more favourable location for French exiles.
In only one area am I "jealous" of wealthy people, and here I am referring to the generous wealthy. It is their ability to choose where the bulk of their charity goes, as their private generosity may well top their tax liabilities. I wish I could likewise choose who could be the principal recipients of my generosity, rather than the state deciding for me.