So a couple of days ago, the never-wrong-about-anything-even-if-facts-prove-otherwise shadow chancellor Ed Balls announced that, if a Labour government were to be elected at next year's general election (chas v'shalom), they would reintroduce the 50p top rate of tax. The one they brought in near the end shortly after they'd bitch-slapped the economy, prior to which it had been 40p, 5p lower than what the Tories have put it to now. Balls and Miliband love talking about the 'millionaire's tax cut' from Chancellor George Osborne, playing to the old stereotypes of the Tories being a party for the rich. This wouldn't bother me, were it not for the fact that the public is gladly consuming this bullshlachen. A recent YouGove Poll found that 61% of the public support the tax hike, with 40% supporting it regardless of whether or not it brings in more money.
Bringing in more money, however, is, in my opinion, the only respectable reason to support this nibble at the wealthy, even if I don’t agree. I could be boring and talk about Laffer, but I won’t. Instead, I’ll allow the (incorrect) assumption that tax avoidance never happens, and tax hikes don’t affect the efficiency and success with which people work, and therefore the total taxable income in a 50p world is the same as in a 45p world. Under these extremely basic and incorrect assumptions (although this doesn’t seem to stop lefties buying it), we’ll assume that in any one year, a 50p tax rate does indeed generate more than the 45p one. Now, let’s just remind ourselves who it is we’re taxing; it’s the employers and wealth creators. Yes, everyone’s favourite group, the 1%. Take more of their money, and two things are pretty much guaranteed; they’ll employ less people, and they’ll spend less money. Employment and spending, for those of you who’ve survived this long into this admittedly sluggish paragraph (the one later on is, sadly, even worse), are what grows an economy. Growth leads to more wealth, which leads to more taxable income. Higher taxes means slower growth meaning smaller rises in taxable income. So, within a year or two, the money left to tax in the 50p world is less than in the 45p world. And so, money raised from the highest rate of tax is higher in the latter, as you get a smaller slice of a bigger pie.
Even if it did generate higher revenues in the long term for the Labour government, would that be invested in materials for public services, like medicine or textbooks? Nope. What about infrastructure? Nah. Hey, maybe it’ll go towards helping the very poor? Doubt it. So where will it go? Maybe to the people who fund and control the Labour party; the ones who are solely responsible for appointing Ed Miliband Labour leader against the party’s wishes; the ones that are responsible for 75% of all Labour funding; the Nick Park of the political world; the people who’ve been responsible for me and thousands of other schoolchildren losing days of our education; the unions. Alright that was a bit theatrical, I know, but NYT audition this Sunday aside, the unions really do have more control over Ed and Eddy that most people realise. Increased revenue, in the hypothetical world where it did come for Labour, would not make anything better for the public.
Ok, so all that was a bit wearisome, but I wanted to get it out the way so I could ramble about the moral side. After all, what really angered me about the YouGove poll wasn’t actually the 61% support for the hike; it was the 40% support regardless of the money it brings in. A minority, yes, but one still far too big to go unnoticed and ignored.
This support for the hike must, presumably, mean that these people feel it is the morally right thing to do. As the leader of the ‘burn the rich’ movement, arrogant lefty drone Owen Jones, tweeted, “If you're a millionaire moaning about a tax rise that will leave you a millionaire while the poorest suffer, you are a terrible human being.”They will all be left millionaires, of course, won’t they? Well, of course, no, they won’t. The tax affects anyone earning £150,000 or over above the allowance, currently around £10,000 following the Tories’ decision to raise it to allow the poorest too keep more of their money (something Labour funnily enough aren’t so keen to remember) . The vast majority of these people are, unfortunately for Owen Jones and his fellow success haters, not millionaires. Indeed, given that the very rich millionaires are more likely to be able to avoid tax (something I’m not advocating), the main people this will hit are those earning between £160,000 and £500,000 a year. A lot of money, yes, but who, I hear you ask, are these people? The doctor who’s saving that old man’s life. The lawyer who’s just brought that murderer to justice. These, of course, aren’t the only people the tax affects. They aren’t even the majority of people it affects (although the majority of doctors and lawyers do earn somewhere in this bracket, with more being above than below). I just like to remember, in a country where those who earn more are consistently demonised, that not everyone who pays the top rate of tax is evil. In fact, more than this, the overwhelming majority are honest, hard-working, tax-paying people. But Owen Jones and Labour would never tell you that.
Beyond this, though, I have a much deeper problem with any tax hike, particularly to half of a person’s income. To me, that’s the government saying “Hey, so you know that money you just worked to get? Yeah, we’re basically responsible for half of it.” Sorry, (well, actually, I’m not) but that just doesn’t seem right. Lefties can drone on about fulfilment from your work and all that nonsense, and to an extent that isn’t completely wrong. But I believe, as basic animals, we work for rewards. Take away half those rewards, and we don’t work as well. I get the need for taxes and public services, but seriously, a hardworking person should, at the very least, hold a majority stake in their income.
All of this being said, I highly doubt most the people who said they’d support the hike regardless of the outcome on revenue have thought about it as much as I have. To my mind, this whole discussion highlights an even bigger problem with our society (is that as douchey as I think it is?) that envelops us; an obsession with other people’s money. We all want to know how much our neighbour is earning, or how much or teachers are, or how much Philip Green is. I remember a couple of years ago the main headlines as I turned on BBC News was “Bank Boss earns £6 million a year”. My immediate reaction? ‘Good for him’. Nothing angers me more than the fact that there are people that deem someone else’s wages newsworthy. If the story had been avoidance being exposed, I’d understand it being reported. But it wasn’t. It was just a story telling the jealous world how much this man had earned. You can argue that it’s about him seeing wage increases while others grit their teeth and bear the austerity that is saving our economy, but that’s total and utter garbage. It made the news because we as a society have decided we care, far too much in my opinion, about everyone else’s money. The support for Labour’s tax hike is merely another symptom of this sickness, but for me, it’s time we stopped spending so much time peering over each other’s shoulders at the cash machine.
I’ve been a Tory since I got interested in politics, and I plan to be one til I die (I’m not sure if political views carry on in the afterlife). This latest bit of economic illiteracy from Labour only reaffirms this.