Finance minister rejects new tax on top pay

A new top tax rate for very high earners is not the best way to stop the rise in corporate pay packets, finance minister Wouter Bos told MPs yesterday. He has called on managers and supervisory board members to exercise ‘moral restraint’ on pay.

Speaking during an emergency parliamentary debate on top peoples’ pay, Bos said a tax rise would only force up salaries and bonuses in compensation. ‘It will only make the problem greater,’ said Bos, who is also leader of the Labour party (PvdA).
The debate was called following the commotion over hefty pay rises for top executives at companies such as specialty foods firm Numico, ING bank and publisher PCM.
GroenLinks and Socialist Party MPs have called for the introduction of a new top tax rate. But Labour MPs say the issue should first to be discussed by employers and unions. A new tax bracket could be introduced if they fail to find a way to moderate pay rises for senior staff. ‘We still believe that a tax on very high salaries is an option,’ said Labour MP Paul Tang.
During the debate, Bos said the ‘core problem’ was not necessarily that company bosses earned so much, but that the difference between their salaries and actual performance was so wide. ‘Society are not so opposed to the vast sums earned by football players and artists,’ he pointed out.
ChristenUnie MPs were surprised at the minister’s call for moral restraint on pay. ‘What is he going to do? Calling on industry to do something is not the end of the matter,’ said MP Ernst Kramer. He proposed that the cabinet looks at ways of giving shareholders more say over pay policy. Bos agreed to do so.
Bos is coming under increasing pressure from his own party to step down as Labour leader because this conflicts with his role as finance minister. A survey carried out by TV programme EenVandaag showed that 52% of party members think Bos should quit now that he is in the cabinet. And 57% said the party’s leader should be an MP.

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