As usually happens when hard line Socialist utopias are created, Jeremy Corbyn’s maximum pay plan would help the rich not the poor.
That is because when employees reach the maximum, other ways would be found to reward them which would increase inequality and reduce the tax take from the rich.
In Soviet Russia access to the splendour of the Bolshoi Ballet was a perk for the wealthy. The poor weren’t helped, and no tax was collected on the perk.
So it would be if Corbyn got his way. Employers would pay bonuses, perhaps in shares or profit share, when they can’t pay extra cash. The thing is, shares or profit shares, when sold, are liable to Capital Gains Tax, not Income Tax as wages are, and the capital gains tax rate is lower than the income tax rate above £140,000.
The other option is to give a higher amount of renumeration as pension contribution. It’s not in your salary for Corbyn to tax, but you will have a happier retirement than a poor person, and the government get less tax than if you take it as salary.
So if I were rich, I know what I would choose. I would vote Corbyn, not Tory, because I would be better off.
Other benefits in kind would be even harder to collect the tax on, whereas just having the income through PAYE would mean the government have a greater chance of collecting the tax.
Closing some of the loopholes I described above (and there are hundreds of others), would do much more to achieve the aims of reining in excessive pay, but they are more iterative and less headline-grabbing, so no use to politicians of the Corbyn kind.
* David Thorpe was the Liberal Democrat Prospective Parliamentary Candidate for East Ham in the 2015 General Election