As the U.S. debates the “Buffett tax” the LibDem party conference here in the UK is generating a series of proposals to address wealth inequality, from the inspired to the woolly-headed.
Inspired: (not least because it’s so blinking obvious). Danny Alexander suggests hiring more Treasury auditors who are devoted to ensuring that wealthy people who evade tax start paying up. Enforce the law for the wealthy as it is for everyone else. Hard to argue (though some will try).
Not so much: Business Secretary Vince Cable’s suggestion that companies be required by government to report what each individual executive and manager has done to merit their compensation. We have a mechanism that works better than government to punish companies that overpay incompetents. It’s called the free market (Presuming no bailouts, in which case all bets are off and executives can ethically be put on the GS payscale like every other federal worker). How could a government that apparently struggles to get people to pay tax they legally owe make judgements superior to the market on the inner workings of companies, employee by employee, as to whether each person’s contribution was appropriately rewarded? If some idiot executive is overpaid and evades the tax on his bonus, then the public sector should go after him (it’s usually a him) full throttle. But if some idiot executive is overpaid but ponies up the appropriate tax on his ill-deserved wages and bonus, that’s the company’s problem, not the public’s.