Friday, June 13, 2014

Tax the Rich?

Just want to make it clear I haven't become a Tory but, but, but...

I read an article in the Telegraph today, an organ I only peruse on holiday, and came some way towards understanding a flat tax policy. I have Fraser Nelson to thank.

In his piece he points out that the grand plan in France, to tax the highest earners at 75%, on which Francois Holland was elected, has quite simply resulted in lower revenue. They have discovered that '...high taxes redistribute people, not wealth.'

So well done to the coalition, and especially to the Liberal Democrats, for balancing the debate on lower taxes with the idea of moving a larger portion of people above the tax threshold altogether.

The problem for all governments is that their wealthy are not all setting up Gates Foundations. Wealthy people are as selfish as the rest of us. Which means that if they don't like a country's tax regime they will get in the yacht and move elsewhere.

So if we overtax the rich we lose their tax altogether.

Now I don't trust the Tories on the NHS or education so I am not running into the blue camp just yet, and even later the Woodspring Fox camp as Atlanticist, Thatcherite, Euroscpetic Unionists are not really me.

But one cheer for an idea I now get. You have to keep your rich happy or they bog off. Selfish of them, but hands up anyone who doesn't vote with their feet if given half a chance.


Uncle Walter said...

A couple of points:

1) Mr Nelson's argument is a little simplistic. It is possible to tax rich people without imposing a 75% income tax rate.

2) Also, there is at the heart of this despicable government the paradoxical thinking that poor people deserve less money as an incentive to work harder and rich people deserve more money as incentive to work harder.

If it were true that removing money from people incentivesed them to work harder, the 90% Super Tax rate imposed by the Wilson government would have led to an outbreak of entrepreneurship.

Steve Tilley said...

Thanks John. I'll get a grip. I was hesitant in my appreciation I hope you agree.