Monday, October 13, 2014
Pay Dirt ??!?
Declaring my views in advance, I nonetheless find the treatment heaped on Elliot and its un-named beneficiary in today's Guardian's piece today utterly assinine. Not because I think he's "worth" GBP38mm (or anyone else for that matter), but because The Guardian, rather than decrying money earned, should be rejoicing that the employee took it down in the UK (and presumably will be subject to UK income tax) and didn't [apparently] use any obvious manner of deferral or avoidance scheme. That Singer's management company paid GBP1mm in UK corporation tax, while having demagogic shock value, is irrelevant in such a global service business because it is ultimately taxed on its profits in the US, and should be be seen no differently than Silchester's Butt's large pay, who as founding principal of a similar service business, takes his down in the UK, to the benefit of HM Treasury. While one can certainly take aim at the relative merits of performance fees in fund management (the source of excess), or the wisdom of investors' fee arrangements with Elliot (a number of whom are likely UK public and private pension funds), Mr Singer's arrangement with one of his employees is ultimately a private affair, and should be of no more concern than what Mr Abramovich agrees to pour into Fabregas' bank acccount, Mr Beckham's privately negotiated endorsement fees, Elton John's stream royalties, or the price Steve Cohen is willing to pay to Damien Hirst for a lucite-encased shark, provided they are in line with rules set forth in law.
Perhaps the Guardian's Mr Neate has a point to make somewhere outside of his rubber-necking at the number of zero's contained in the filing - a point that might highlight the lack of social responsibility , in modernity, by today's beneficiaries, in a winner-take-all economy, or unprecedented windfalls to rentiers resulting from asset price inflation while the same macroeconomic consequences squeeze median purchasing power. Or perhaps he might focus on more pernicious systemic gaming of the tax code, or inelastic demand curves by privatized monopolies. Just gawking, however, serves little purpose at best, and in the absence of any constructive conclusions, may result in reactionary anger and envy-driven policies that would likely be very sub-optimal.