And you’re surprised because?
lankyphil:
And you’re surprised because?
Where do I express surprise? You posted because?
Maybe her taxes are paid for her 
Yeah, well… If I had a chance to not pay tax, I’d certainly take it 
Sarcasm. Nothing personal.
Directed at the fact that once again its one rule for them and a different one for the rest of us…
Ironically, the fact that’s she’s the head of the IMF means that you’d have thought she would have known better…
lankyphil:
Sarcasm. Nothing personal.Directed at the fact that once again its one rule for them and a different one for the rest of us…
Ironically, the fact that’s she’s the head of the IMF means that you’d have thought she would have known better…
My point exactly… 
The story has been misconstrued. Tax is paid - it’s just that the contractual salary entitlement is net of tax. The gross salary is made up to whatever is required to pay all the income tax due.
I believe ‘net of tax’ salaries are not that unusual in this type of job, where the incumbent could be of any nationality. This way, the ‘take home’ pay is identical, whether the employee is resident for tax purposes in a high or low income tax country.
djw:
The story has been misconstrued. Tax is paid - it’s just that the contractual salary entitlement is net of tax. The gross salary is made up to whatever is required to pay all the income tax due.I believe ‘net of tax’ salaries are not that unusual in this type of job, where the incumbent could be of any nationality. This way, the ‘take home’ pay is identical, whether the employee is resident for tax purposes in a high or low income tax country.
Yeah? What about the £90k expenses she doesn’t have to provide receipts for?
44 Tonne Ton:
djw:
The story has been misconstrued. Tax is paid - it’s just that the contractual salary entitlement is net of tax. The gross salary is made up to whatever is required to pay all the income tax due.I believe ‘net of tax’ salaries are not that unusual in this type of job, where the incumbent could be of any nationality. This way, the ‘take home’ pay is identical, whether the employee is resident for tax purposes in a high or low income tax country.
Yeah? What about the £90k expenses she doesn’t have to provide receipts for?
I wasn’t claiming what was happening with Lagarde’s remuneration package was morally or ethically right - more than this is a non story.
The Daily Mail article is either naive (the journalist doesn’t understand what he’s writing about), or, more likely, is manipulating people into believing something other than the truth. By saying “IMF boss condemns the Greeks for avoiding tax. But Christine Lagarde pays NOTHING on earnings of £350,000”, that is accurate, though not in the sense that most people will read it. Lagarde personally pays no tax on her contractual salary entitlement, if the article is to be believed. However, her gross salary will be higher by the amount of income tax due on the gross salary, leaving Lagarde with the money to pay her entire tax demand (to France, presumably, if that is where Lagarde is resident for tax purposes) and be left with her net salary entitlement.
The article sailed rather closer to the wind in the use of the world ‘untaxed’ in “Lagarde takes home £298,675-a-year untaxed” - that sum is taxed, but Lagarde does not need to put any of her contractual net salary entitlement towards this tax.
No tax is being dodged - it’s just that the contract is an unusual one where the salary entitlement is net of tax rather than the more typically gross of tax. There’s nothing stopping a haulage firm from employing a lorry driver on a ‘net of tax’ contract - it’s perfectly legal, but a pain in the rear for the employer working out exactly what extra salary is due. There’s also privacy issues, in that the driver may have to disclose financial circumstances far beyond their PAYE tax code to their employer or employer’s accountants for the correct gross salary to be deduced (as matters such as investment income will affect the employee’s tax position and therefore the tax due on the salary from employment).
I would also point out - again without agreeing on whether it is right - that, compared to the heads of major banks, Lagarde’s salary is minute. Quite a few senior banking executives will gross ten times Lagarde’s net salary entitlement. Arguably, Lagarde has a much more responsible, politically sensitive, diplomatically awkward and difficult job than the banking executives.
If you want my personal view, I’m in agreement with Wilkinson and Pickett’s contention in The Spirit Level (the link is to Amazon, other good bookstores are available) that pay differentials in the UK and USÂ are far too high. Wilkinson and Pickett make a good evidence-based argument that society as a whole would be better off without this extreme pay inequality. Of course, there is a counter-argument to the book - but I still recommend it as a worthwhile read. It’s no political polemic, nor is it argued from a socialist philosophical standpoint, though it inevitably takes a particular viewpoint.
Interesting reading and viewpoints.
However, I am unable to find any link to our profession so wonder why it is in this forum. 
It still amazes me that people believe what they read in papers!!!
djw:
44 Tonne Ton:
djw:
The story has been misconstrued. Tax is paid - it’s just that the contractual salary entitlement is net of tax. The gross salary is made up to whatever is required to pay all the income tax due.I believe ‘net of tax’ salaries are not that unusual in this type of job, where the incumbent could be of any nationality. This way, the ‘take home’ pay is identical, whether the employee is resident for tax purposes in a high or low income tax country.
Yeah? What about the £90k expenses she doesn’t have to provide receipts for?
I wasn’t claiming what was happening with Lagarde’s remuneration package was morally or ethically right - more than this is a non story.
The Daily Mail article is either naive (the journalist doesn’t understand what he’s writing about), or, more likely, is manipulating people into believing something other than the truth. By saying “IMF boss condemns the Greeks for avoiding tax. But Christine Lagarde pays NOTHING on earnings of £350,000”, that is accurate, though not in the sense that most people will read it. Lagarde personally pays no tax on her contractual salary entitlement, if the article is to be believed. However, her gross salary will be higher by the amount of income tax due on the gross salary, leaving Lagarde with the money to pay her entire tax demand (to France, presumably, if that is where Lagarde is resident for tax purposes) and be left with her net salary entitlement.
The article sailed rather closer to the wind in the use of the world ‘untaxed’ in “Lagarde takes home £298,675-a-year untaxed” - that sum is taxed, but Lagarde does not need to put any of her contractual net salary entitlement towards this tax.
No tax is being dodged - it’s just that the contract is an unusual one where the salary entitlement is net of tax rather than the more typically gross of tax. There’s nothing stopping a haulage firm from employing a lorry driver on a ‘net of tax’ contract - it’s perfectly legal, but a pain in the rear for the employer working out exactly what extra salary is due. There’s also privacy issues, in that the driver may have to disclose financial circumstances far beyond their PAYE tax code to their employer or employer’s accountants for the correct gross salary to be deduced (as matters such as investment income will affect the employee’s tax position and therefore the tax due on the salary from employment).
I would also point out - again without agreeing on whether it is right - that, compared to the heads of major banks, Lagarde’s salary is minute. Quite a few senior banking executives will gross ten times Lagarde’s net salary entitlement. Arguably, Lagarde has a much more responsible, politically sensitive, diplomatically awkward and difficult job than the banking executives.
If you want my personal view, I’m in agreement with Wilkinson and Pickett’s contention in The Spirit Level (the link is to Amazon, other good bookstores are available) that pay differentials in the UK and USÂ are far too high. Wilkinson and Pickett make a good evidence-based argument that society as a whole would be better off without this extreme pay inequality. Of course, there is a counter-argument to the book - but I still recommend it as a worthwhile read. It’s no political polemic, nor is it argued from a socialist philosophical standpoint, though it inevitably takes a particular viewpoint.
Thanks for your reply, makes interesting reading. My general point, is that the well off are the biggest tax dodgers of the lot so it makes my blood boil when they come out with this rubbish and castigate the little man when he has a lot less room for manoeuvre when it comes to taxes. Do as I say not as I do. Madame Lagarde may or may not be worth every penny of her salary. I would offer the opinion that she is not as she seems not to grasp the reality of the situation that Greece and everyone else are suffering through the actions of the wealthiest and greediest in society. The bankers. Not the Greek plumber working for cash! Advice from Madame Lagarde and other such well off individuals is neither welcome nor valid. The French (once more) had the right ideas about how to treat them…
OnlyAlan:
Interesting reading and viewpoints.However, I am unable to find any link to our profession so wonder why it is in this forum.
You don’t pay taxes?
Whirlwind:
It still amazes me that people believe what they read in papers!!!
You use whatever ammunition you can find…
and your only ammunition is copy and paste from a newspaper that doesn’t do journalism.
Madame Lagarde DOES pay tax and probably a lot bloody more than you will in your lifetime ,She may be using loopholes be wouldn’t we all if given the chance.
So i’m wondering , as i do on all you copy and paste posts , why does it worry you , whats your angle . Get back to attending that steering wheel 
There is a football tournament about to be played, In that tournament is a large amount of players that play in this country , They all use a loophole to pay less tax , But it’s funny that nobody is writing stories about this , and that because papers like thhe daily fascist would loose readers ,so they only print about people that aint popular.
Whirlwind:
and your only ammunition is copy and paste from a newspaper that doesn’t do journalism.
Madame Lagarde DOES pay tax and probably a lot bloody more than you will in your lifetime ,She may be using loopholes be wouldn’t we all if given the chance.
So i’m wondering , as i do on all you copy and paste posts , why does it worry you , whats your angle . Get back to attending that steering wheel
Here you go, just for you…same story! If you can’t work out my angle you’re as thick as I think you are!
I believe ‘net of tax’ salaries are not that unusual in this type of job, where the incumbent could be of any nationality. **This way, the ‘take home’ pay is identical, whether the employee is resident for tax purposes in a high or low income tax country.[/**quote]
I understand that and agree it is fairly logical, but the other side of that argument is wether one should be paid less because they live in a cheaper home economy.i.e. cheaper housing, food, energy etc.
I imagine that “take home” pay of, eg. £100k would offer quite different standards of living in the various countries represented on the IMF.
It seems that, as usual, they wish to use the same argument when it suits them but ignore it when it doesn’t.
del949:
djw (highlight by del949):
I believe ‘net of tax’ salaries are not that unusual in this type of job, where the incumbent could be of any nationality. This way, the ‘take home’ pay is identical, whether the employee is resident for tax purposes in a high or low income tax country.I understand that and agree it is fairly logical, but the other side of that argument is wether one should be paid less because they live in a cheaper home economy.i.e. cheaper housing, food, energy etc.
Residence for tax purposes and domicile can be two different things. The head of the IMF inevitably spends a lot of their time in Washington DC, where the IMF headquarters are, and, especially at the moment, some time in Paris, where the IMF Europe office is.
The resulting tax liabilities may well be complicated, especially if Lagarde is treated as having diplomatic status (though, unless my memory is faulty, her predecessor failed in his claim of diplomatic immunity in the US criminal courts). She may well have tax liabilities in both the US and France.
del949:
I imagine that “take home” pay of, eg. £100k would offer quite different standards of living in the various countries represented on the IMF.
You’re quite right, though living costs are incurred wherever you are, not where you come from. Still, relative buying power is a consideration when it comes to matters such as the value of a pension.
del949:
It seems that, as usual, they wish to use the same argument when it suits them but ignore it when it doesn’t.
I would hope the underlying message in what Lagarde said to the Greeks is clear. They cannot survive as a nation on debt bail-outs now that they, to all intents, can no longer sell sovereign debt to the markets because the interest rates requested are completely unaffordable. Part of the reason the Greek economy has been something of a basket-case is that tax avoidance is supposedly endemic.
Nobody likes taxes and nobody wants to pay more than they are legally required to do. However, public services have to be funded, which makes taxes essential. Whilst there is a spread of political opinion on the correct size of the public sector and the matters the public sector should address, some jobs will always be essential.
We don’t like our private bills either - water, electricity and, for many of us, gas all have to be paid for. We typically have one or more phones (landline or mobile), at least one method of connecting to the Internet, and often have a multi-channel TV subscription. All these things have to be paid for - we wouldn’t expect them for free, much as we pay the asking price grudgingly.
It’s the same for public sector services - we need at least some of them, the only supplier is the government, so we have no option but to pay the asking price (taxes).
DJW, you misunderstood the last part of my post that you quoted. I wasn’t referring to the comments re greece and taxation, but to the IMF apparently usung an argument to justify tax free pay and then failing to take into account the different living standard costs incurred by their members.
Seems a bit like all drivers everywhere getting “london weighting”.