Category Archives: Bit of politics

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.

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.
Continue reading Just, worth putting out here

Taxes on the rich clearly aren’t too high

There are lots of countries in the world that are tax havens. They are short of skilled labour. Anyone earning enough to pay higher-rate tax in a Western country has a skillset that would easily land them a job doing something similar in a tax haven.

Instead, they’ve chosen to live where they do. Definitionally, this shows that they believe the tax is a price worth paying for the quality of life they enjoy there. If they didn’t, then they’d have moved to a tax haven already [*].

So while some rich people might complain that they think taxes are too high, they clearly mean this in a “it’d be nice if this thing was cheaper, but I’m still going to buy it at the price it’s on sale for” way (rather like people buying Apple products), and therefore we can discount their protests.

Taxes on unskilled workers, who don’t have the same advantages when it comes to free migration, are a different story: the poor can’t be deemed to have agreed to the deal in the way that the rich clearly can.

So the morally best way to reform the tax system would be to remove the working poor from the tax net, while ensuring that those wealthy enough to have a choice bear more of the cost. This is even before you consider the massive benefits (on virtually all measures) of having a more equal society.

[*] there is a pragmatic argument that “we’ll be stuffed if all the talented people leave”, and there is presumably a level of tax at which this might be true. However, evidence from the 1960s and 1970s (when marginal tax rates on very high incomes were above 90% in the UK) suggests that the proportion of talented people leaving even at that rate was low enough as to be irrelevant to overall economic growth.

Good answer to a rhetorical question

On a fairly standard CiF article about the death penalty (the Americans are planning to execute a woman who was involved in a plot to kill her husband, but who was demonstrably too stupid to have led it; everyone sane disapproves; everyone evil and vindictive approves strongly), the standard liberal joke question came up:

i’ve never understood how someone can be pro-life and in favour of the dealth penalty.

Obviously, lots of right-wing idiots came up with failed answers. But a liberal commenter called LinearBandKeramik (no relation) actually came up with an excellent one:

Pro-life individuals are not primarily opposed to abortions because of a concern for the unborn child. It is more about maintaining a social structure in which women’s independence is circumscribed by their ability to give birth. If the choice to give birth or not isn’t fully under the individual control of the women concerned then it allows others (other women, men, the church etc.) to have greater power over them. In other words they’re not really pro-life, they’re pro-control.

Such individuals simultaneous support for the death penalty flows partly from a lack of compassion and also from a belief that violence should be the remedial option of first resort, regardless of the problem.

Pretty much 100% on, there.

Easy answers to simple questions, #423

From the comments on Charlie Brooker’s excellent Guardian piece on the insane fuss over the not-a-mosque not-at-ground-zero:

How many Saudi’s would object to a Church being built in one of their cities if they were asked and polled? How many Americans object to a mosque? How many in Switzerland recently voted against minarets? Are they are all reactionary, sexist, homophobic, racist, xenophobic, nationalist, fascist, intolerant bigots?

Yes.

Well, except for the ‘sexist’ and ‘homophobic’ bits – while those are closely correlated with the other attributes listed, they aren’t directly relevant to the case in hand.

Bonus extra stupidity:

One never knows, there is a definite possibility that an Islamist atrocity may once again occur on UK soil and also an outside chance that a member of Charlie’s family is in the wrong place at the wrong time. I wonder if Charlie, or any of the others supporting this prospective mosque near the Ground Zero site, would have such a positive attitude to this proposed development, if this came to pass.

Yes I bloody would. Because I’m not an appalling, stupid bigot, I’m fully aware that moderate Sufis would have had absolutely nothing to do with such an attack, that Islamist extremists hate moderate Sufis even more than they hate America, and that the best way to combat the ideology that created Al Qaeda is to build bridges with moderate Islam.

Digressionally, Cordoba House would have been a good name for the mosque, given that the Andalusian caliphate was the most religiously tolerant government the European world had ever seen at that time (or indeed, at any point before the 19th century). It was replaced by the genocidal mania of the Spanish Inquisition – a welcome reminder that anyone claiming Islam is inherently less liberal than Christianity is deeply, deeply stupid.

Supreme Court (UK edition) for the win

Lord Rodger, yesterday:

Just as male heterosexuals are free to enjoy themselves playing rugby, drinking beer and talking about girls with their mates, so male homosexuals are to be free to enjoy themselves going to Kylie concerts, drinking exotically coloured cocktails and talking about boys with their straight female mates.

Great ruling, though. And nice to see the government welcoming it, in a weird departure from precedent and stereotype.

Of course, the Sun had to spoil it: Gay illegals can stay. Err, no, you bigoted idiots, they aren’t illegals, they’re legitimate refugees – that’s exactly what the Supreme Court ruling has just determined…

Depressing but probably true

From the Rodent:

It would’ve been wiser and more useful in military and diplomatic terms; more humane, productive and billions of pounds less expensive if the US and Britain had responded to 9/11 by crashing two planeloads of US marines into the centre of a randomly-chosen Afghan city at 700 mph and executing 300 randomly-chosen British squaddies by firing squad.

Conjecture on Mr Weisenthal’s Centre

Any self-professed ‘human rights group’ that criticises a decision to, erm, respect someone’s human rights is not actually a human rights group, so much as an opportunity for a bunch of vindictive tossers to further hone their already highly developed sense of victimhood and entitlement.

Eggscerable reporting, or ‘no, the EU won’t ban eggs by the dozen’

The latest insane euromyth, as faithfully invented by the Daily Mail, is that the EU is planning to ban the sale of eggs by the dozen or half-dozen. As usual, the Littlejohn Rule applies here: if the story sounds like something you “really couldn’t make up” (thanks, Mr Dale), then somebody doubtless has made it up.

The main thrust of the Daily Mail’s story is that under proposed EU legislation, it will be illegal to print “six eggs” on a box of six eggs. Instead, the quantity of eggage will have to be listed solely in kilogrammes. This is simply – and really really obviously – false, and if you believe it then you’re doubtless someone who’s checked whether the word ‘gullible’ is really in the dictionary.

Here’s the actual legislation, proposed by the European Parliament. The quote that the press have misunderstood (or, more likely, lied about) is:

1. The net quantity of a food shall be expressed, using litres, centilitres, millilitres, kilograms or grams, as appropriate:
(a) in units of liquid in the case of liquids within the meaning of Council Directive 85/339/EEC of 27 June 1985 on containers of liquids for human consumption ;
(b) in units of mass in the case of other products.

In other words, all food that is sold in the EU will need to list either its volume (for liquids) or its mass (for solids) in metric units on the pack. Note the absence of anything banning the use of other indicators on the pack, such as “number of eggs”, “mass in pounds”, “number of moles of hydrogen atoms in the packet”, etc. Anyone who wishes to do so can advertise any or all of the above, as long as the metric unit of volume or mass is clearly marked. See: a pint of milk.

So the more outlandish claim, that the legislation would ban the sale of eggs in packs labelled as ‘six’ or ’12’, is obvious, total nonsense.

The only thing substantiating the piece at all is the Mail’s quote from an unnamed source at the UK’s Food Standards Agency, “Retailers would not be allowed to put ‘Six eggs’ on the front of the box.“. Whether the Mail has grossly misquoted the FSA spokesman, or whether the FSA spokesman is an idiot, is not clear. Either way, the quote is wrong.

A more sensible criticism of the proposed rule comes from The Devil’s Knife – that the change would cost food packagers money for very little benefit, wasting everyone’s time and resources:

Well, I would imagine that selling a 500g box of eggs that does not, in fact, contain 500g of produce is illegal under Trading Standards. So now the egg producers are going to have to weigh each and every box, and stamp the exact weight on each box. Not only will they have to buy the stamping equipment (because you can bet your bottom dollar that just writing the weight on is not legal: they even have to stamp each individual egg now, for fuck’s sake) but it is also labour-intensive.

Well, this would be true, except that eggs are already graded by weight – e.g. a ‘large’ egg weighs 63-73g – which requires them to be weighed. And under EU labelling rules, positive errors are allowed on packaging, as are negative errors of 3% (for a package that weighs 300-500g, like six large eggs).

So if the new rules do come in, an egg producer who wished to comply with them at zero cost could just add ‘weight 385g’ to all their boxes of large eggs, and otherwise carry on as before.

Meanwhile, an egg producer who wanted to emphasise the fact that their large eggs were super-large could put the actual weight if they chose, based on the grading by weight that they would have done anyway. Obviously, this would require more complicated software for labelling; whether the producer views it as worthwhile or not depends on whether they reckon it’ll help them make money. Like, erm, most commercial decisions…

Update: John Harrison of Allotment.co.uk has helpfully clarified the (current and not planned to change) rules for small producers in comments:

It’s currently perfectly legal to engage in farm gate sales (or front door sales for backgarden chicken keepers) so long as you do not grade the eggs and provide a use-by date.

This means the box sold at the door of six eggs will be various sizes, which is actually quite useful when cooking. Some things a small egg is perfect for and you can hardly use ‘half a large egg’. The useby date is generally just a matter of adding 30 days to the laid date.

Home producers do not need to stamp the eggs etc. It’s when you supply shops etc that the weight of regulation comes in.