Saturday, September 01, 2007

Tax and Fat Cats

John Grieve Smith has an interesting article in Friday's Guardian. He makes several points:

  • The Labour Government has "stemmed the growth in inequality inherited from the Thatcher years, but not reversed it".
  • Many of those entitled to tax credits do not claim them (18% in 2004-05).
  • The tax system considered overall is not "progressive": if indirect taxes are taken into account "people pay much the same proportion of their income in taxes all the way up the income scale".
  • The system could be made more progressive by (a) raising the top rate of tax to 50%, (b) reinstating the 10% starting rate.
  • There is likely to be "considerable public support for curbing the excessively high salaries and bonuses of company directors and managers by making it obligatory for companies to have employee representatives on their remuneration committees".

This comes on top of a report by Ashley Seager in Thursday's Guardian which tells us that Giles Thorley (chief executive of Punch Taverns) earns 1,148 times the average salary of his employees. And: "The average boss-to-worker ratio across the FTSE is 66:1 based on salary alone or 98:1 with share options and other incentives". Tesco's boss gets 415 times the salary of the average shelf-stacker. New Labour was, famously, "seriously relaxed" about this kind of thing (as Mandelson put it); but my guess is that most Labour voters find it quite obscene.


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