Saturday, December 24, 2011

Tax aversion

Many people try to turn tax rates for the richest sector of the population into a political argument but it isn't, it is about straight forward inequality, ego and greed.

The same arguments for under-taxing the rich crop up again and again:

1. They help to promote our country abroad which brings in income. I heard Michael Caine using this argument. To raise taxes for people like him, he said, was a mistake as they had already generated huge amounts of income and prestige for the country with their work.

I admire Michael Caine immensely and on the face of it this sounds reasonable: somebody raises the profile of the UK all over the world, surely it is wrong to demand extra tax from them as well?

OK, but someone is going to have to decide which individuals or jobs promote our country enough to offset the extra tax. Maybe a league of top celebrities who, just by being famous enough, inevitably bring benefit to the UK. Or everyone could declare on their tax return how much they considered they were worth in increasing the global reputation of the UK. It could work: if a pop or film star was watched by X million people this year that could give them a tax rebate of X percent. The other side of the coin would be those who damaged the reputation of the UK abroad...

This leads to the situation where the celebrity is being taxed less but all the people who make or sell the records, DVD's, t-shirts, run the cinemas, tours etc. continue to pay the same tax as before.

2. They provide jobs and boost the economy.

Fine, but so does every self employed person (they provide a job for at least one - themselves).

3. If you raise their taxes they just move abroad.

The law does have to be pragmatic: there is no use having laws which are unenforceable as they just cost money paying for people to chase shadows. But it doesn't sit easy with many people that because somebody is in a privileged enough position to do something they should get away with what less privileged people cannot. We know it happens in all kinds of things - top criminals get away while those who work for them end up in jail etc. but it shouldn't really form the basis of policy.

If Michael Caine is right, then all those tax exiles are still contributing to UK Inc. through their status anyway.

He says that raising extra tax on the rich and successful is a half-think: it doesn't consider the value of the person to the country already. Actually, he is guilty of half-think: he is not considering the hospitals and schools that cannot be funded because he is holding on to the extra money. He is making choices about what to do with that money (maybe better ones than the government - who knows?) but he is unaccountable for those choices. If he thinks the government should spend his tax money differently he is much better placed to get his point of view across than most of us so why not pay the tax and be vocal in his opinion on where it goes?

4. Having higher tax rates for higher earners disincentivises their working at all.

It seems very unlikely that Michael Caine continues to work in order to earn money. At some point that he may not have been aware of he stopped earning a living and started doing what he does simply because he loves doing it. Some people may be driven purely by the love of accumulating wealth but they are in a very small minority if you believe what rich people say. Money itself is a proxy for power and, as I said above, they have power through their own status.

Some people argue for flat tax rates and this would be fine if wealth and income were normally distributed - that is the graph of people's wealth looked like the graph of people's heights for example. If you taxed everyone one inch out of every six inches of their height you would get a workable (if arbitrary) system. However, because the graph of wealth is shaped like the infamous hockey stick of global warming, a flat tax rate has the direct effect of squeezing the majority on the near horizontal part down while the near vertical stick (the top few percent most rich people) is pushed higher and higher with nothing to hold it back. It is regressive with a capital R - it promotes inequality with vigour.

Seems to me you have two choices: get rid of tax altogether and run everything on a mixture of charitable donation and free market competition, or have a proper sliding scale of tax which goes some way to reverse the trend for the rich to get richer at the expense of the poor. Anything else is unsustainable in the long run.

Saturday, December 17, 2011

singularity 2011

To quote Ripley: I hope you’re right; I really do.

It is not that I don’t believe that we are on an increasing gradient of technological development: the two things that worry me are its fragility due to short sighted political dogmatism and the gross inequality of access.

I suspect that yes, “we” will have lots of the things in your article but who the “we” will be and who will be making that decision is the big issue for the first half of the 21st Century.

To put it another way, if one person can replace their organs when they pack up while another is dying of diseases that have been curable for decades we really haven’t hit anything I would accept as a singularity.

We don’t like the idea of technology that shapes our own attitudes and behaviour and that may be the make or break on our future as a species.

Wednesday, December 14, 2011


If somebody is a rationalist and doesn't believe in any kind of spirituality, do they consider that one bag of dirty water is equivalent to another even if one is a living thing and the other is not?

sophisticated consumers

Although our urge to communicate is clearly core to our being, it is probably more of an enabler for civilisation rather than a driving force towards its development. A major driving force seems to be our urge to develop the things we use or consume to be ever more sophisticated.

We developed tools for many everyday tasks tens of thousands of years ago and really, apart from a few refinements, these are as good as they need to be - a hammer, an axe, a knife, even clothing - there's not a lot of ways these can be improved. The need for refinement seems to have come from us rather than the environment. The first indication of this is decoration. This is very ancient and means that our ancestors were already diverting effort away from improving function and into making an item more desirable for other reasons. We can see that status within a community and relative status of a community compared to others was linked to the sophistication of their possessions.

Communication was the way in which ever more sophisticated designs and techniques were carried forwards through the generations. Observation and mimicry and verbal instructions (show and tell) were followed much later by written and drawn instructions. If you look at the history of an object, e.g. the sword, it appears that there has been an endless search for individual uniqueness, that all possible materials, all manufacturing methods, all design templates were explored over and over. No two cultures have the exact same solution to the sword problem and yet for the most part these difference do not give a significant advantage in terms of use.

These days we tend to accept that each time we replace something it will be with something more sophisticated; it is built into our belief in progress. Yet, for most of our human history progress is very patchy, occurring for some periods in some places but for the majority one lifetime was much like the last dozen or hundred. But there was still an accepted hierarchy of sophistication in almost all communities - certain types of thing were for certain levels of society. There are exceptions of course: highly respected and revered classes of people who shunned sophisticated objects and lived as simple a life as possible. But mainly, the link between status and sophistication has been powerfully and often violently enforced; in medieval times it was against the law for peasants to wear certain fabrics and even certain colours of clothing; we have an inbuilt prejudice against people who own things 'above their station' and if you have something that has been superseded by a more sophisticated version you are labelled an outsider.