Here’s a nice postscript to Christine Lagarde’s attack on the Greek people for their problems. You remember that Lagarde said she didn’t sympathize with Greeks as much as she did, say, African children, because Greeks got themselves into their own mess by not paying their taxes. This has a kernel of truth, as the Greek tax collection system is basically hopeless. That’s true more for the rich in Greece than the poor, who are bearing the brunt of the suffering during the depression, however. And it appeared to be an unnecessarily cruel thing to say, as evidenced by Lagarde walking back the comments on Facebook after making them.
Now here comes the punchline. Christine Lagarde, as head of the IMF, doesn’t pay any taxes:
As an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes […]
Lagarde, 56, receives a pay and benefits package worth more than American president Barack Obama earns from the United States government, and he pays taxes on it.
The same applies to nearly all United Nations employees – article 34 of the Vienna convention on diplomatic relations of 1961, which has been signed by 187 states, declares: “A diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal.”
According to Lagarde’s contract she is also entitled to a pay rise on 1 July every year during her five-year contract.
I suppose we can have a discussion about why international organization employees shouldn’t pay taxes, including for those at what amounts to the executive level (the claim is that these organizations must offer big salaries to attract talent from the private sector, but practically all of the appointees end up coming from the political realm). But the bigger issue is that Lagarde surely knew at the time of making comments about evil tax evaders that she paid no tax on her salary. This reeks of the attitude of one system for the little people, and one for the elites, which characterizes elite discourse in this day and age. That’s especially true because Lagarde’s initial point was that one group, the poor, should suffer because another group, the rich, didn’t pay their taxes.