Tim Worstall

Polly on Money in Politics.

La Polla makes an odd assertion:

The top people are now taxed hugely less of their income than the average and the bottom,

Really? I’ve had a quick look for the figures but can’t seem to find them. Not sure I know the correct word. Not tax rates, nor bands, but the effective? tax rate for each income decile? The actual percentage of income paid in tax for each income decile? I’m sure I’ve seen a table from what used to be the Internal Revenue which showed exactly that. %ge of income paid in tax by the lowest decile, next up and so on. This isn’t quite what I was looking for.

Anyway, as to her major point:

How does government stay safe from the dangerous seas of megamoney swilling about? Wherever there is power, there is money too.

Well, quite. When you have those with the power to dole out money making opportunities then those who wish to make money will suck up to those with the power. And they’ll buy them too, as Duke Cunningham showed recently in the US. And as Paul Drayson most definitely didn’t:

Paul Drayson, the biotechnology entrepreneur who gave the Labour party
£100,000 while successfully bidding for a lucrative government vaccine
contract, also gave it another £500,000 within six weeks of being made
a life peer, the Electoral Commission revealed yesterday.

The solution is simple. Those with the power should have less of it. That means smaller government. When there is no point in buying them, no one will buy them.

In

4 responses

  1. Matthew Avatar
    Matthew

    She means total taxation as a proportion of income. From the table you give the proportion of all taxes as a % of gross income is much the highest for the lowest decile, then it falls sharply towards the middle, and rises towards the end, though it never gets as high as for the poorest decile. This doesn’t take into account the fact that there are benefits in kind, nor does it address the issue that much of gross income at the lowest level is benefits, which can strengthen or weaken the argument, I think.
    Of course it is generaly argued by the right that much of the top deciles income is in fact hidden from the tax man due to our onerous tax rates, so this must overestimate tax paid as a %.
    In short I think she overstates the case, but I would have thought she might be right about the top 1%.

    Reply
  2. Andrew Paterson Avatar
    Andrew Paterson

    Sounds like she’d love flat tax…..

    Reply
  3. The Remittance Man Avatar
    The Remittance Man

    At 300 grand a time it’s hardly surprising only the rich can afford the services of tax avoidance consultants unless they’re married to one, of course. By the way, who’s going to be doing Tessa’s tax return next time around?
    I think this is grossly unfair. We should demand that tax-avoidance services are provided to all tax payers funded from general taxation and free at the point of delivery.
    On a more serious note, I agree with Tim that the only real solution is to make the “value” of politicians smaller. Sadly, if any government ever does really try to solve the problem, I suspect it will be with legislation, regulations and a massive bureaucracy that ultimately fails to achieve the desired result. That’s just how politicians think.
    RM

    Reply
  4. Mark T Avatar
    Mark T

    P J O’Rourke – something to the effect that when politicians decide what can be bought and sold the first thing that’s bought is the politician

    Reply

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