Jimmy Carr, Hiberno-English comedian, only has to pay a penny in the pound or so in income taxes, despite being a member of the global elite of very wealthy individuals. And despite the fact that the market for his product is almost entirely concentrated in the UK and Ireland.
The scheme is fairly simple to understand: all the money he gets for his comedy apparently goes to a Jersey company, which then loans him money. It's classed as a business loan and thus exempt from many taxes.
A quick look at wikipedia confirms what most people would have guessed: there is no precise, agreed-upon definition of income. The wikipedia article itself mentions three different schools of thought on how to define income from the point of view of academic economics. It also mentions a separate definition from the International Accounting Standards Board. It does not state whether the tax authorities of Ireland or the UK have their own variation of the concept. Income - Wikipedia, the free encyclopedia
Quite apart from expert definitions, I suspect that most of us would not consider Jimmy Carr's money to be anything other than income, even if it is classed as something else according to tax regulations.
So clearly, if you're honest, talk about "income" should really be very clearly marked as to what definition you're using, and if you don't specify a definition, then the "common usage" definition should suffice.
Constantin Gurdgiev writes in the latest Village:
"the top 23% of income earners (defined as those on incomes in excess of €50,001 per annum) had a combined income of €46.1bn, accounting for 55.8% of the total income in the nation". 46.1bn divided by 55.8 is 826 million, implying that total income would be €82.6 billion in 2011.
Problem: GNP is given as US$221bn in 2011. I'm using $1 = €0.74 as my yardstick for a rough calculation of the exchange rate. That still gives you a GNP level of €163.5bn.
So whatever it is that Constantin Gurdgiev means by "income", and there are at least three different definitions to choose from, it appears to exclude almost half of GNP!
Of course, not all proximate economic actors are physical people. Some are sovereign governments. Some are fictional persons, usually called companies by you and me. All companies are owned, ultimately, by physical people, though.
So what the blue fsck is going on with the €80bn of GNP that Constantin Gurdgiev does not label as "income"?
Wikipedia again: "GNP is the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country."
I strongly suspect that a lot of that €80bn is, in fact, what you and I would call income/wealth/sponds/moolah/dosh/bucks. I also VERY strongly suspect that no more than 20% of that €80bn of GNP that does not get counted as income is under the effective de facto ownership or control of the bottom 50% of Irish individuals.
In what context was Constantin Gurdgiev talking about total income being half of GNP?
You've guessed it: to bolster his argument that we can't tax the rich any more than we currently do.