Companies avoiding 50% rate with pay schemes

“Britain’s leading companies are devising pay schemes that enable top executives to escape the new 50p rate of income tax for high earners that takes effect in April, the Guardian has learned.

“Some of the biggest companies in the country are constructing complex pay schemes that risk infuriating government ministers, who are determined to crack down on tax avoidance – more from Guardian.co.uk. Some of these schemes are “nakedly” intended to allow senior boardroom bosses to pay a tax rate of 18% instead of the 50% top rate, according to one industry expert.”

Shock horror

But why is anyone surprised? It was naive in the extreme to expect that these new tax measures would not be avoided.

We harp on about this until we, and anyone who reads us, must be bored stiff. There is only one tax which cannot be avoided or evaded. That is a tax levied on the annual rental value of land, as established by market evidence. Since most of these obscenely huge incomes are ultimately comprised of the rental value of land, and those who enjoy them spent much of this income on the acquisition of more land in the most desirable locations, the remedy is obvious. Tax the rental value of land and get rid of other avoidable taxes.

Now one would expect that those who gain from the present state of affairs to be opposed to this change, but one does not expect opposition from those who find the situation offensive. But that appears to be the case, and so nothing changes. A couple of times a year there is an ill-informed exposition of the case for land value taxation in papers like the Guardian, but it soon gets forgotten, probably because the underlying body of principles does not fit preconceptions.

Those who believe in “soaking the rich” are to blame as much as anyone. It seems that the radical left is unwilling to accept that it has been basing its ideas on a false picture, derived in large measure from Marx. Which is good news for what one poster on the Guardian’s Comment is Free described as “bottom feeding parasites” or “bottom feeding scum” (though scum rises). These are not good metaphors, since these people are actually getting the cream which ought not to be left floating around in the first place, there for the taking. That is what happens when taxation is based on “ability to pay”, where “ability” is equated with “income”, a term so vague that it cannot ultimately be tightly defined. This all goes to show how envy and anger cloud the judgement.