Joe Salmon, 17 March 2024, Tags:
Okay, this is going to be something quick on economics. Income tax is mental. Here is the video version of this
https://www.youtube.com/watch?v=z85invK8jZg
OVER £125,000 is the top band, but salaries go way higher.
10 Of The Highest Paying Jobs In The UK In 2024 | Morgan McKinley
A really simple fix would be to increase the overall tax burden by bringing in higher rates for these higher earners, thus better funding our public services, but then also reducing the tax burden on those least able to pay by increasing the personal allowance threshold.
The immediate counter to this is twofold. Firstly the laffer curve https://en.wikipedia.org/wiki/Laffer_curve is an argument put forward. If you want to really get into the economic weeds on this check out https://www.sciencedirect.com/science/article/pii/S031359262200008X#sec6, I personally think you can have tax rates right up into the 80%, and that insights from behavioural economics filtering into the field are well overdue to inform those debates. The second rather closely linked argument is that of the loss of skilled workers and the very wealthy.
This doesn’t bear any resemblance to reality though. Any of us who have worked in a large organisation know that if someone is on a six figure salary chances are they don’t do much actual work. Look at the job titles in the article on the highest paying jobs, none of those are real jobs. Almost every single person occupying that position will be utterly dependent on a team of others who actually carry out the heavy lifting, they’ll simply oversee things. These people take on the role of corporate soothsayers, removed from the actual work and labour they instead interpret mystical high level data that only they can interpret and explain in a way to dazzle the congregation of investors and shareholders, even if they did once genuinely understand the sector they now oversee.
The loss of these people would be no disaster, and the warping effect their consumption and hoarding has on things like inflation, luxury goods and the housing market would be welcome.
That’s it. It’s dead simple. Just sort the tax brackets out. You know me I’m all evidence based, and if you read through the paper I’ve got on the laffer curve you’ll know that from where I sit now as a bloke in his living room ranting I don’t know enough to confidently go “here are the correct income tax brackets” like some wonderful stone tablets that I do know enough to see these rates are mental.
Anyhow, that’s it for today. I was going to cover my theory of change etc, but honestly after I hit 2000 words and was starting to rehash the arguments in the spirit level I realised I should stop and just get something simple done.
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