More fun with marginal tax rates

Here’s Felix Salmon Justin Fox standing in for Felix Salmon, on the economic impact of the socialist Truman government’s evil confiscatory tax policies:

During the Korean War, Congress enacted an excess profits tax meant to keep military contractors from, well, profiteering. In its infinite wisdom, Congress defined excess profits as anything above what a company had been making during the peacetime years 1946-1949.

Boeing was mostly a military contractor in those days (Lockheed and Douglas dominated the passenger-plane business), and had made hardly any money at all from 1946 to 1949. So pretty much any profits it earned during the Korean conflict were by definition excess, and its effective tax rate in 1951 was going to be 82%…

It being 1951, Boeing instead sucked it up and let the tax incentives inadvertently devised by Congress steer it toward a bold and fateful decision. CEO Bill Allen decided, and was able to persuade Boeing’s board, to plow all those profits and more into developing what became the 707, a company-defining and world-changing innovation.

(I’ve deleted some of his sarcastic commentary about how a government enacting a similar measure today would be described, so that mine sounds cleverer.)

No, it’s not your bleedin’ money

Money and property rights are both creations of the state. If the state were abolished, neither would exist. The ‘money’ point is obvious, but the same applies to property: the fact that you happened to own a nice house would be irrelevant, because someone bigger than you would come along and tell you to get out of it or he’d kill you [*].

In other words, when people complain about the money that the state takes off them in taxes, comparing it to their pre-tax paycheque, they’re talking complete and utter nonsense. The correct figure for comparison is the amount of money that they’d have in Hobbes-world. Which, apart from musclebound psychotic thugs, would be vastly less than they’d have under any plausible liberal-ish-democratic-ish society.

Now, I’ve met a fair few right-libertarians, and I can’t help notice that they generally fit better into the “amiable geek” mould than the “musclebound psychotic thug” mould. So, all things considered, their take on life is a bit weird.

I wonder if the popularity of the belief “I’d do better in a world with no state”, despite its falsehood for the vast majority of people who believe it, is down to the same kind of overestimation of personal ability that makes people on modest incomes oppose taxes on the rich because, against all evidence, they believe that one day they’ll be in that group?

Or perhaps it’s even more primal than that, going back to playground fantasies of ninjas and sword-battles. Which could possibly explain why libertarianism is rather more popular among men than it is among women…

Probably worth signing off with the obligatory disclaimer that I’m arguing against a specific ideological position about property and taxation, not for a society where the most extreme counter-position holds. Obviously, I don’t think it’d be a good idea for the government to levy tax at a level that left people at [the same level of income they’d have in Hobbes-world + delta], because that would be a terrible idea from the point of view of maximising overall welfare.

[*] what would actually happen, based on historical evidence from all eras, is that eventually people would get pissed off with Hobbes-world and support whichever appalling violent thug was willing to enforce some basic rules that meant they wouldn’t just be murdered and robbed at will – i.e. a hugely authoritarian government. But let’s assume that Hobbes-world is some kind of sustainable equilibrium, for argument’s stake.

Data point on taxation and labour mobility

From Financial News:

Not a single trading team from Tullett Prebon, the London-based broker which told employees they cold move abroad for tax reasons in one of the clearest signals of an exodus from London has moved, almost a year after the offer was made. It is the second development in a week that suggests fears over core talent leaving the City were overblown.

So *nobody at all* at Tullett thought that they would be better off paying less tax to work somewhere that wasn’t in London.

I suppose some people might argue that although not emigrating, Tullett’s brokers are working-to-rule and deliberately ensuring they aren’t eligible for big bonuses, because they’d rather have 100% of nothing than 50% of a lot. This doesn’t seem entirely convincing, given the personality traits of the trader-y types that I’ve encountered…

Just, worth putting out here

Since I’ve already tweeted that it annoys me, as a left-wing kind of person, that some people in the 1980s hated Mrs Thatcher so much that they opposed the most reasonable and fair war that the UK has ever fought, I thought I’d make clear on my blog that anyone who opposes it is pretty much evil.

I mean, seriously.

I hate Mrs Thatcher’s domestic policies. And she frequently gets slated for the Falklands War. But the former involved a concerted attempt to destroy the working class – which is a bad thing, and which is the thing we should hate her for. The latter is not – it’s one of the most reasonable wars the UK has ever fought.

The Falklands War involved defending a strange, odd outpost of people who spoke English, had red telephone boxes, and did A-Levels (obviously, they didn’t do university, because an island featuring fewer than 10m people isn’t going to have a good university….), and who’d been there for 150 years, and were unanimously convinced that they were all British and not Argentinean, from a dictator who was based in a country 100km away who thought that the island in question ought to be part of his country because, erm, it was nearby. Even though the Falklands had had British settlers on them for longer than his country had even existed.
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Secularists Go Silly On Halal

I’ve always found halal slaughter less unpleasant than regular industrial animal slaughter. As anyone who’s ever cut themselves with a properly sharp blade knows, cutting yourself with a sharp blade doesn’t hurt at all until about a minute after the event, by which point the animal is already distinctly dead. You might prefer your animals to be shot in the head with a bolt-gun first; whatever floats your boat.

There’s no strong evidence to support either view – the only thing it’s fair to conclude is that it doesn’t make much difference [*], that both methods are almost entirely painless and instantaneous, and that slaughter is probably the least problematic aspect of the entire industrial meat supply chain from an animal welfare point of view.

Anyway. Apparently a sizeable proportion of the meat on sale in the UK is killed halal-style, along with nearly all frozen lamb imported from New Zealand (the latter because the Gulf is New Zealand’s largest meat export destination). Now, I can see that if you were some kind of hardcore religious type, you might be opposed to eating halal meat, because a prayer was said to the wrong imaginary sky fairy when it was killed and so your imaginary sky fairy might be cross. In which case, fair play to you – I disagree, but it makes sense in your worldview.

But much more baffling is this response from the National Secular Society:

We suspected that meat killed by the halal and kosher methods was being used for general consumption but we never imagined it was so widespread. It is disgraceful that ­people aren’t being told if the food they are being served is from meat that has not been stunned prior to slaughter

This is a witless quote, for two reasons.

The biggest is that the NSS spokesman’s “if” clause is wrong: 90% of halal meat sold in the UK is pre-stunned, including all NZ meat and all meat sold to supermarket chains and major foodservice companies – which is what the article in question is talking about. The only difference between this sort of ‘halal’ meat and non-halal meat is that it’s been killed by a chap who said a prayer when he cut the animal’s throat. If you object to that for any reason other than “I’m worried my god will punish me”, you are purely and simply a bigot.

But even boycotting the other 10% of halal meat, killed in the traditional style (you’re unlikely to find this on sale outside of dedicated halal butchers shops, takeaways and curry houses), is still jumping to silly conclusions about animal welfare based on your own personal sense of ‘ewww’.

If you are, genuinely, so concerned about animal welfare that a possible, unproven, small difference in possibilities of consciousness between stunned and unstunned slaughter affects your purchasing decisions, then you shouldn’t be eating randomly sourced meat in the first place – the suffering that industrially farmed animals undergo compared to compassionately farmed animals is several orders of magnitude greater than anything that happens in the slaughterhouse.

So unless you’re veggie, or you stick solely to meat that’s been produced under a recognised ‘compassion in farming’ certification scheme (or a local farm that you know follows the same principles, of course), then you should probably shut up about halal meat already. Otherwise, people might start to think that you’re just in the ‘bigot’ camp too…

[*] people have been known to argue against halal slaughter from an animal welfare point of view. However, these people tend to be arguing from prejudice, not evidence: there have been surprisingly few scientific studies done on the topic, not least because working out how much an animal has suffered during slaughter is pretty much impossible. The most comprehensive study, carried out in Germany, found that ritual slaughter was painless for sheep and calves. There is some evidence to suggest that cows, being large, take show some signs of brain activity (which doesn’t necessarily mean suffering or pain) when killed by halal/kosher slaughter – there is none to suggest the same for chickens or sheep. The Farm Animal Welfare Council report that’s usually quoted on the subject by anti-halal/kosher types ignores the evidence on either side in favour of proof-by-assertion, which is a distinctly poor show (paragraph 195).

What I’ve been up to, week ending 2010-10-03

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