Interesting article about the rich

I do fear that the 'in my experience' line is being used far too often by those with a very narrow frame of reference to justify opinions that are objectionable.

Hmmm, are you saying that because you can afford more you should pay more for services FC.

For instance, we have a gardener and a cleaner. We approached both for a quote and they came and told us the cost. We pay that cost. If we were richer, do you think we should have said, "look, we can clearly afford it so heres double what you are asking"?

How do you know they were making these purchases to fill a void of loneliness though FC? That's my point really.

Baron, if the libertarian party could get its act together............ I'm not sure the tories want me anymore (skeletons etc ?).

I'm not particularly well off yet Mrs Greenback has loads of handbags that she's never used. Is she lonely? ?

Incidentally, I find that people who might be considered 'tight' simply watch their outgoings so they can preserve their existing financial position and improve upon it. I don't see what's wrong in negotiating down in a free market.

Neither do I, Baron. There's nothing "tight" about it. Evy seems to be implying that anyone well off should treat their staff and less wealthy friends as some sort of charity. It's very odd.

The line in the sand is a difficult one to draw Lannie, and as the economy expands and contracts it reuiqres to be monitored and redrawn as necessary. I remember reading earlier this year when Frank Field proposed a mega-rate for the 'super-rich' (or rather, those of the 'super-rich' that didn't donate a certain amount to charity) that there are around 30,000 people earning more than £500k , average income of this group being circa £1.1m. My problem was that I didn;t agree with his definition of super-rich (he thought 150k, I'm more inclined towards upwards of 500k) and I didn't agree with the proposed percentage increase (he was talking about 10%- I find this punitive).

Of course, a massive prob is that the uber rich are generally non-doms who don't pay tax in the UK anyway.

Fairyclown- there's no point in going round circles on this one when you are so clearly right, having qualified your conclusions by reference to your personal experience. <removes tongue from cheek>

Henry is a driver of policy or legislation though - through the very nature of his work. The influence of the City over any government is enormous and Henry's ability to shout loudly in the 'right' ears about welfare etc is much greater than the person in the bottom 10% of incomes. I fully agree with your / Baron's later point re taxation though.

I've also realised that I've clearly missed a trick somewhere. Mr Boop leaves the house around 6am, gets home around 9.30, works every weekend and doesn't take a full day off each week, hasn't taken any leave since our skiing holiday in January, and would miss things like giving birth if it clashed with particular events and doesn't earn enough to even put him in the top tax bracket. Bugger ?

I think the solution may be to introduce more graduation in the tax bands rather than have a rigid 2/3/4 band system. No idea whether this is workable or not within the existing technical constraints but it does avoid punitive measures against the wealthiest tax payers (after all, they've done well to get to that level of income so why on earth should they be taxed into oblivion?) and means that theoretically everyone should be paying their fair share. The tax system in this country is utterly bonkers though - I think Knownowt pointed out a few weeks ago that we don't get taxed enough to make our public services class leading and likewise we're taxed too much to feel that we're getting value for money.

I think part of the problem Lou is how the money is earnt in the first place. If its standard PAYE, then that individual will always claim they pay more by definition.

My H for instance takes a very small salary and the rest of his income is derived from dividends paid. Because this is dealt with via an accountant, H makes him look for ways to pay as little tax as possible (things like diverting profits to pension funds etc.) which is not right but is an accountants job.

I for one think we should pay more than we do as percentage wise, we pay relatively little in comparison to an average earner when you measure it against your total income.

Just to add to the above, we're now in a system that relies far too much on indirect taxation to fill the government's coffers, which is far more of a burden on those on low incomes.

I've just looked at the higher rate of income tax (40%) is for salaries over £34,800.

That is a joke - I thought it was over £40K. There definitely needs to be a higher band.

I totally agree with this.

By the time you take into account the tax free alllowance then it pretty much is 40K - still too low though.

Sadly a wholesale reorganisation of the tax system would be political suicide, not least because I don't think the average voter could get their head around paying more through PAYE even though petrol, household goods etc. would be cheaper. A sad legacy of the current government who wouldn't dare to be seen to raise taxes for fear of alienating the middle class voter base they won from the Tories in 1997.

Exactly - I think it's pretty blinkered to believe that someone working at the top of the City has not even an indirect influence over policy and other things that affect plebs (I'm a pleb by the way if anyone is taking offence!).

Maybe I've got entirely the wrong end of the stick here but perhaps if more people in top finance positions had a better understanding of the average salary and average spending power then we wouldn't have, for example, the subprime mortgage problems and the current credit crunch. Of course, no one Henry is responsible for the world's economy but surely all the Henrys together are making decisions that flow down to high street banks and ultimately consumer lending?

Or does Henry really work in a total bubble?

no you peasant. "wealthy" is totally non-u

I think if Henry (and apologies if it offends anyone that I've seized on this particular name- I happen to love it!) was a captain of industry or an entrepreneur, who would have an impact on job creation or sector development, then yes, I take Zeb and Boop's points. However, the people interviewed in these articles were certainly not members of bilderberg- they seemed to be your average magic circle lawyer or investment banker/ corporate financier. Sure, by their spending habits they no doubt influence the retail economy and property sector, but they aren't drivers of policy per se, they're too busy earning cash (at least that's my experience of these types- did you see that quicky Evy-esque caveat there! ?) The credit crunch point is interesting- in a way, what you say is right, but overwhelmingly what caused the surprise element of the subprime crash was not so much an understanding of how 'poor' people service their debt, as a lack of transparency as to what was actually comprised withint the financial securities products which were being flogged around the world (which were effectively a mishmash of 'sliced and diced' loans, some of them subprime).

Henry does work largely in a bubble though- he's often been in that bubble from birth and ended up where he is via Eton and Oxford, although of course some Henrys have a less privileged route (but they would not have been helpful interview candidates for the author's 'study', of course ?).

I sort of agree with you Zebra but sadly there is always the element of corporate greed & the drive to make more & more money for the company that will always influence/affect all the Henrys. Sub-prime mortgages are so called because there always was a high risk of the borrowers defaulting on their debt. So the top decision makers were aware of the risk they were taking, there was just too much money to be made & the banks got greedy. (In a very tiny nutshell)

Zebra can i ask you what it is you think city people actually do?

That article is so typical Toynbee. She has a world view (which in this case mainly seems to be in this case how DARE people make lots of money) and is going to stick to it come what may. Yawnarama. FWIW I deal daily with an awful lot of top end lawyers and bankers in London and whilst some couldn't tell you how much a pint of milk cost to the nearest pound, the great majority are not like that.

LouM, Magnolia, thanks for the replies. It's very interesting.

I admit that I find the whole loan business and the credit crunch very confusing; I just find it hard to believe that banks giving excesive loans are not being influenced even a small amount by the Henrys who earn millions and work in billions and have no clue what the impact of a 200K mortgage has on a worker earning just below the average salary...

It's good to know I'm not entirely deluded?

but zeb, those people are not directly connected to those who approve/offer mortgages. its not the same thing. and can you answer my question please? ?

Hmmmm, interesting article (ignoring the 'tone' of it). I am another that didn't realise you needed to earn over £40k to be in the top 10% of earners, although I was aware that the median salary was in the region of £22k (although did think that latest research had increased it to nearer to £25k). I am an accountant as well, so have had quite a bit of exposure to salary levels at clients etc. I think the problem with this though is that some 'super earners' actually skew the data somewhat.

I think as well that you will find people in all types of role that are clueless as to wages / cost of household goods etc. I know that my Dad (while still married to my Mum) couldn't have told you things like the price of milk etc, but that is because he didn't need to know - someone else looked after those things for him. I am sure that is a similar case for some of the super earners in the article - they don't 'need' to know. When you are dealing with billion £££ deals on a daily basis, it can be difficult to readjust to worrying about a pint of milk going up pennies.