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If he has any sense he will quit his torture chamber - By Kitty Miv, Editor

Kitty Miv, Editor
02 February, 2012

Should rich people pay more tax? It's today's question, and amid a blizzard of polemics and statistics, sorting the wheat from the chaff to arrive at instructive answers is next to impossible.

Fact: the richest 1% of Americans pay 38% of income tax. By simple arithmetic (let's not besmirch the numbers by calling them statistics) this means that the average top 1%-er pays 62 times more income tax than the average 99%-er.

Fact: all over the place, (some) rich people are saying that they ought to pay more tax. Of course that's dead easy for them when they know it's not going to happen. Why don't they just send a check to the IRS?

Fact: the British government (or at least its socialist half) is trying to reduce the pay of top company executives, which will have the perverse effect of reducing its tax receipts, of course, since the executives would pay 50% on their marginal income, while the retained earnings of their companies will be taxed at 28%. That same supposedly business-friendly British government has this week also forced the ceo of its biggest bank to forgo his contractual bonus and has stripped his predecessor of his knighthood. For those that don't know, knighthoods in the UK are not awarded solely for making money, either for yourself or other people, they are earned to a major extent by charitable and non-profit activity. I carry no torch for Fred The Shred, who seems to have been foolish and incompetent in his stewardship of RBS, but this shameful act is a slap in the face for everything that is good and honourable about public life and is a dramatic testimony to the moral bankruptcy of government.

If Stephen Hester (the boss of RBS) has any sense he will quit his torture chamber and get a job as a hedge fund manager, where he will be able to torment governments instead of having to allow them to torment him.

Anyway, I digress.

The historian Thomas Macauley said that: "There is no sight more ridiculous than the British public in one of its periodic fits of morality", and his observation has now been globalized by the current tidal wave of hysterical propaganda against wealth and rich people in general.

The excuse one can offer for the unemployed and angry protesters in their igloo at Davos, on the steps of St Paul's, and in Central Park, is that governments are patently failing to address the problem of unemployment, preferring instead to try to save their parasitic banks. There are no excuses for the media, though, which enjoys whipping up the frenzy. They are happy to ride a band-waggon bound for hell, as long as they get paid for doing it.

In today's world, a country that forgets to reward its wealth-creators or to protect its underdogs (both tasks are vital) is one that is destined to fail. At present, this description fits Europe only too well, and the UK in particular. In the US, the situation is obscured by the electoral dust-cloud: we should hope that reb-blooded capitalism is still alive and well in the canyons of New York, that morality is still alive and well in the Capitol, and that the next administration will have time for both of them; but we won't know for sure until November. It's a long time to have to wait!





About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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