Ritchie on top pay

First clear signals have to be given as to what is considered fair pay in the UK. This measure would deliver that message – and I defy anyone to say pay of above £265,000 is needed.

Hmm.

PS I am aware that this cap would not apply to rewards paid by owner directors as dividends in private companies – but then these are, in economic terms, not salaries but profit distributions and so are not the focus of the policy I am suggesting, which is meant to address excess salary payments.

Hmm hmm.

So I would predict a flight of business talent from publicly traded companies to private equity myself. Plus an exodus of talented foreigners from the country. But then what do I know, I’m not a retired accountant, am I?

45 comments on “Ritchie on top pay

  1. So I would predict a flight of business talent from publicly traded companies to private equity myself. Plus an exodus of talented foreigners from the country.

    The Taxfinder General will punish such miscreants harshly.

  2. In my occasional moments of despair, I’d love to spend a day around people like Big Dick.

    From dawn until midnight I’d be close at hand watching his every move.

    Every time he spoke or did something, I’d be there to restrain him.

    “No, Dick” I’d say, “don’t do that.”

    “Why not?”

    “I don’t like it Dick, I really don’t like it when you do that.”

    Mind you, I suspect that I’d be the one who eventually went round the bend.

  3. “First clear signals have to be given as to what is considered fair pay in the UK.”

    How about, “If it’s not your money, it’s none of your fricking business”?

  4. Well Ritchie doesn’t need all his money either. Since he sucks in 75K a year and the part time GP missus somewhere around 50-100K but they have little outgoings. No mortgage, state school, state health, modest car, no exotic holidays plus all his banked cash from being a “successful entrepreneur” he will have tons of cash spare. Since he doesn’t *need* it he can pass it over to the treasury surely.

  5. Is there any reason a small family can’t live in a £150k house?

    Why must the Murphys live in a house worth more than 2.5 times that?

  6. Where the **** does the figure come from?

    Need? Need?

    With £50 a week I can eat and drink (water). The state will give me a place to live.

    I defy anyone to say that pay above £2.600/year is needed!

  7. The article is the usual unsurprising mixture of bile, envy and historical ignorance.

    ‘Pay would of course, have to be widely defined- it would of course have to include salary bonuses, all benefits in kind’

    Thus again he reveals his lack of knowedge of the 1970s once again – hard to believe he was actually alive then. Additionally, I’m sure accountants must be salivating at th thought of Tolleys doubling in size for the second time in two decades….

    As a review of’the Curajus State’ on Amazon suggested, it sounds rather like Cuba with bad weather, and as Tim suggests, a mass exodus of talented people seems an inevitable consequence of the policy – could we see people attempting to cross the channel to Belgium on makeshift life rafts at some point in the future?

  8. Richard

    If you’re going to play that broken record yet again and define fairness as the income we ‘need’ (your opinion being the only one that counts of course) then at least try to work out what ‘income’ might actually mean. And while your at it, look up ‘fungible’ as well.

  9. pretty much all of the “bankers’ bonuses” that Leftards like the LTHD complain about are also profit distributions; most traders (the ones who make the big bonuses) are on a share of profit from the desk. If the desk makes less profit, their share goes down and if it makes a loss a significant number of them will get sacked, especially if it’s not a one-off.

  10. So no more footballers then. No more film stars. Etc. Etc.

    He is sooooo stupid he doesn’t even attempt to think.

  11. “Second, it stops the UK taxpayer subsidising these excessive rewards by giving tax relief on them”

    Or, if it works as you would wish, from taking a greater than 50% share of them in the form of Income Tax and NIC.

    Bell-end.

  12. Can’t we at least play along with the spirit of Ritchie’s witterings?

    And put a cap on the “needs” of the state?

    After all, if no one “needs” more than 265k then the next person no more “needs” it than the person actually earning it.

  13. More proof for my theory that when ever someone defines ‘the rich’ (usually for the purposes of demanding they pay more tax) they will inevitably define ‘rich’ as being one and a half times their current income. Giving themselves some wiggle room if they get a pay rise or promotion. The Murphy household most likely has a gross income of £160-180K, which multiplied by 1.5 gives £240-270K.

    Spot on I’d say.

    And also most likely chosen so that very few public sector figures (or union bosses) fall foul of it, as he wouldn’t want to antagonise some of his lefty paymasters.

  14. Take the case of professional footballers. A salary cap of £265,000 would mean a massive drop in the wage costs for top teams. Would prices drop? Not really, as demand for tickets exceeds suppy at many clubs. So what would happen is that the labour share of the profits would collapse, and the profits of companies running the teams (many of them owned by billionaires, some by hedge funds) would skyrocket.

    Well done Richie.

    It is ironic that the Left hate footballers so much. The vast majority of them are working class lads ‘done good’. They create the product and they get their rightful share of the profit. Why then are they hated so by the Left? Is it just snobbery?

  15. @ Jim
    I was thinking “yes, that’s right” then a fraction of a second later “No, the working class do *not* think like that”; the working class think of people with a stately home, or a yacht, or a Rolls-Royce, as rich. It’s the Guardianistas who do that trick.
    Incidentally Murphy pocketed £12k tax-free when he dissolved Tax Gap Ltd in 2012 in addition to his taxable £65k from Tax Research LLP and his pension/investment income and Mrs Murphy’s ? (average GP gets £105k and Murphy says he does the school run so is she full-time). A single-earner family with a mortgage and contributing to a private sector pension scheme on £265k has less spending money than the Murphys.

  16. John77

    I’m with Jim on this one. In my experience the salary level at which taxes should rise is just above what I personally can aspire to.

    Rob

    Spot on, but not only footballers. Try Citu boys working for and making profits for banks. Envy it seems is blind to class.

  17. Note that I have never seen an author used by the Left as an example of “the rich” to be pilloried and pillaged, even though they may write best sellers and have an annual income in the millions.

  18. @Rob

    All that would happen is that all the top Premiership footballers would move to European or Latin American clubs who would continue to pay them millions a year.

    Most of them aren’t British anyway so have no familial ties to the UK.

  19. Rob

    I’ve seen Graun articles criticising Dan Brown’s income, mostly because of the “poor quality” of his books* but you’re right – wealth acquired by authors and artists is seen as more virtuous.

    (*I’ve not read any of his books so can’t comment, but even if they are crap then his sales/income are none of my business)

  20. @ GlenDorran
    Someone told me that I *must* read the Da Vinci code. On page 3 Apollo is declared to be female. I used that as an excuse when I gave up after finding half-a-dozen bits of similar complete nonsense stated as facts in the first 50-60 pages.
    @ Ironman
    When I was earning (and I *was* earning, not just getting paid) above the surtax/higher rate threshold I used mortgage interest & covenants/Gift Aid to avoid/reclaim the surtax/higher rate tax. I twice suggested to Murphy that he should tithe and encourage his readers to tithe – he flatly refused, demonstrating that his claims to be a christian are hollow PR pretensions.

  21. No public sector wage of more than £40000 per year and no PS pension of more than £25000 pa. Both are well above the pay due given the performance of the senior civil service.

  22. John77

    Murphy is one of “Christians” who picks up the Bible when it suits, puts it down again when it suits, quotes from liberally but never, EVER, more than one line at a time. Thus Jesus always agrees with whatever our Ritchie happens to be saying today. But then, as I’m sure Jesus is well aware, to do otherwise, candidly, would be crass and neoliberal.

    As for tithing: well now you’re talking about HIS money and, politely, you, me and the Almighty can keep our noses out.

  23. “Thus again he reveals his lack of knowedge of the 1970s once again – hard to believe he was actually alive then.”

    I suspect he has thought it through, for once, or just got lucky, but he did include benefits in kind.

    In the 1970s the work around to pay controls was the company car which at the time didn’t count as a benefit in kind. I remember, vaguely, a stories of even the post boy getting a car as a way round government pay freezes. But even if that is mis remembered it certainly did trigger a culture of company cars and not just for salesmen.

  24. “Note that I have never seen an author used by the Left as an example of “the rich” to be pilloried and pillaged, even though they may write best sellers and have an annual income in the millions.”

    Unless they supported Maggie: step forward Fredrick Forsyth.

  25. Footballers are a bad example. Their employers, in the main, do not pay tax.. as they are highly unprofitable. Where they do, it’s a small fraction of the wage bill. As such, Murphy’s proposal (which is not a cap on wages, just on tax relief thereon) will make no difference at all.

    Outside of financial services, where there are hefty numbers of people earning that much in companies who need to deliver an after-tax distribution, I’m not sure exactly where it would have any effect.. let alone what that effect would be. If a FTSE company has a dozen or so people on that kind of wedge then the loss of tax relief will barely tickle the roundings.

  26. The Thought Gang:

    Football clubs spend almost all their income on wages. Murphy’s proposal would make deny tax relief on the majority of a premier leagues wage bill (since most players make 10 times Richey’s cap). Therefore, Richey’s proposal would probably impact premier league clubs more than any other industry.

  27. The Thought Gang

    I think that paying huge salaries that are themselves subject to IT& NIC is actually paying a lot of tax. In fact gov’t revenues are far higher from PAYE, NIC and VAT than from CT. So football probably still stands up as an example.
    I would also point out – because Ritchie is a master of the wriggle out of the hole he digs for himself – that his case is built upon what level of salary is ‘fair’, which in turn is based upon his view of ‘need’. So his proposal is intended to reduce top-end salaries, or what’s the point?

  28. You’ve not quite grasped the proposal. Clubs, yes, they make losses because of the vast wages they pay. Murph would say that those vast wages are not counted as expenses when calculating profits. So, the clubs would continue to make the accounting losses but they would be profits for tax purposes. So they would then lose even more money as they were charged tax on the taxable profits.

  29. There’s an interesting experiment going on in Rugby Union. English Premier League teams have a lower salary cap than French teams and we do see a drain of talent. It is constrained by the rule that to play for England you must play in England so we only see the players on the periphery or at the end of their international careers moving, Toby Flood being the latest.

  30. I suppose some companies might choose to relocate their head offices, to Luxembourg or Ireland maybe.

  31. Actually Tim I think we have grasped the proposal and, yes, it is simply to limit the tax deduction on salaries rather than ban them outright. The intended effect though is to limit the salaries that employers pay. The references to ‘fair’ and ‘need’ lead us there.

    As I wrote earlier in this thread “..if it works as you would wish..” Then the Treasury does lose more than it would gain and his ‘subsidy’ isn’t reclaimed at all.
    However, as Bloke with a Boat et al point out, it won’t work that way at all.

  32. The Thought Gang

    In the unlikely event that you actually do suffer from low self esteem: no you’re not an idiot at all. You are a thoughtful and valued contributor to our debates.

  33. I actually think we’re going to have to live through some of this bollocks at some point, just so they can see how it pans out. Maybe my grandchildren will benefit, if I have any.

    That said, the way they write the history of yesterday, never mind yesteryear, who can say whether people will even appreciate the way things pan out is different from how they might have been or were?

    @BWaB re Rugby Union, yes, though Sarries seem to be finding ways around it, and the French contigent are mostly but not all at the ends of their careers – I’d like to see have seen Steffon Armitage in our back row (or at least available for) for some years!

  34. I am surprised no one else has said this but if you want to live in a house like Tony Benn did you need to earn a lot more than £265,000 p.a.
    Should people like him pay a massive tax (far more than the mansion tax) on their houses?

  35. If we had a real Tory government instead of the sorry apology we actually have, they could enact a voluntary Socialism Tax, whereby every taxpayer would be asked if they wished to pay an extra income tax (for schools’n’hospitals’n’poverty etc etc), complete with swinging rates, say 30% for basic, 60% for higher rate, 80% for the top rate, and see how many of the Left put their money (which is usually someone else’s money to be fair) where their mouths are. And everytime Polly Toynbee or RM was on Newsnight demanding more taxes on the rich, they could be asked if they were paying the voluntary Socialism Tax. Might concentrate a few minds.

  36. (*I’ve not read any of his books so can’t comment, but even if they are crap then his sales/income are none of my business)

    His books are Godawful tosh, and it is an absolute mystery to me how he has managed to become one of the most popular author the world has ever seen, but I hold a sneaky admiration for his coming up with a story people wanted to read and making himself a colossal fortune in the process.

  37. Jim

    Read John77 earlier in this thread on the tithe. Ritchie has no bloody intention of paying more tax himself.

  38. @Ironman: yes I know that. But the Socialism Tax could be wheeled out every time someone like him got on their hind legs demanding we all pay more. If all it took was one phonecall to HMRC to switch over to the higher rate system, no-one could say it was too complex (as it would be nowadays, there being no official system for voluntary tax payments). It would raise the square root of fuck all, but it would be a powerful tool to waive at the hypocritical. And of course it would be a fixed decision for (say) the life of a Parliament. Otherwise you could swap in, safe in the knowledge if you got that big pay rise, or new job, you could swap out again.

  39. They won’t be put off:

    “So you’re against private education Ms Abbott”
    “Absolutely”
    “But you sent your son to a very expensive school”
    “Aah but the Tories were in power. Now we’re in power I wouldn’t need to. Just a pity he’s already left school and at Oxford really.”

  40. @Intersted

    Both brothers are playing very well from what I’ve seen recently and would at least make the England squad, I reckon.

  41. @BwaB (in case you drop back)

    Yes, I agree (though we’re shorter of a good 7 than a good 15, and Delon has had his issues in the past!).

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