Russell Taylor: Being rich is not a crime

Labour’s promise to reinstate the 50 per cent tax rate for people earning over £150,000 per year has been met by a predictable response from both sides of the political divide. The Right has pointed out that it will reduce government revenue and that cutting taxes will have the opposite effect. The Left, meanwhile, has laughed at the Laffer Curve, and made some empty-headed comments about the rich “paying their fair share”.

But these arguments are red herrings. Debating the optimum tax rate from a revenue perspective assumes that we want the government to raise and spend as much money as possible. When conservative pundits call for tax cuts as a means of raising revenue, they’re playing into the Left’s hands by tacitly approving of a big-spending state. They’re saying there is nothing wrong with the scope of the state’s current responsibilities, and that the only conversation to be had is about how we should find the money. Instead, they should be arguing for low taxation as an end in itself. They should be making the point that the money people earn belongs to them, and that the government should appropriate as little of it as possible to finance those services that can only be undertaken by the state.

There is a popular belief that ‘the rich’ were responsible for the recession and the bail-out of the banks, so they deserve to be punished by the taxman for their crimes. For starters, this is a simplistic analysis, which overlooks the role of the Labour government in encouraging recklessness by the banks and creating a structural weakness in the economy. But more to the point, the vast majority of people earning more than £150,000 per year had nothing whatsoever to do with the financial crash. They’re just successful people on a good income. Even the thickest Labour supporter must understand this, which tells me this has nothing to do with justice and everything to do with envy.

Our national debt is ruinous and the government needs to find a way of paying it off, but none of the major parties are taking any steps towards this. The money they raise from the public will continue to be siphoned into existing public services. Until the size of the state is radically reduced, it will continue to have gigantic financial responsibilities, requiring high levels of taxation. It’s a chicken-and-egg situation. As long as taxation is high, the government will collect enough money to justify the continued existence of services that require high taxation to finance them.

The Tories need to spell out why putting essential services in private hands will not leave the poor unable to afford them. Food, mobile phones, computers, televisions – they have all become better and cheaper thanks to free market condition. So why the love affair with piss-poor public services? The government isn’t a guarantor of service and value, and it never has been. Can you imagine if the state had a monopoly on something like computer manufacture in this country? We’d still be using ZX Spectrums and Commodore 64s, and loading software off audio cassettes. The reason that something like the NHS is so shoddy and so expensive to run is because it’s a state monopoly. With little competition, no risk of failure and no fear of public dissatisfaction, it is inefficient and profligate. There is no reason to think that if healthcare were in private hands it wouldn’t be better and more affordable than ever.

It’s an unpopular opinion in this day and age, but I reject the entire notion of progressive taxation. I see no reason why the rich should pay proportionally more than the less well-off. There’s the fact that they benefit least from government expenditure, of course, but my real beef with progressive taxation is the implication that there is something wrong with being successful: that it is a crime to be rich and that tax is the punishment.

I don’t understand how anyone can wail about poverty on the one hand, yet resent those who escape it on the other? Are they holding off from celebrating wealth until everyone can get rich at precisely the same time? If so, they’re going to have a long wait. As a country, we will never get anywhere until we learn to admire and mimic successful people, instead of ascribing their good fortune to wrong-doing for the sake of our own fragile self-esteem.

  • DanV

    And from personal experience, it’s a very liberating moment when you finally see that all that bleeding-heart, moral high-horse fetishistic egalitarianism that you have been fed all your life, causing you to question all your natural impulses towards improvement, achievement and success, and feel the need to apologise for any ‘getting ahead’ that you manage to do, is NOT morally superior at all, and is in fact no more than the relentless whining self-pity of emotionally retarded perpetual adolescents, so embittered by what they perceive as their own failings, that the mere thought that someone else may have done better renders them irrationally furious (though unfortunately not incoherently so – boy can they go on about it.)

    • Russell Taylor

      No one is really stupid enough to fall for that zero-sum guff that underpins lefty thinking. It’s just the rationalisation of envy.

      • DanV

        I agree that the minute you apply even a modicum of rationality, it all falls apart – but the constant relentless drip drip drip of lefty thinking does wear you down after a while. Even the most rational of us have the basic human need to feel like a ‘decent’ person, and when the society you are part of seems to have swallowed the arguments of the egalitarians wholesale, it becomes difficult to constantly be made to feel like some sort of moral leper, just because you don’t agree with the notion that some people are really poor, as a direct result of some other people being really rich. I guess I got a bit worn down by it all because I’ve spent my working life in the education sector, which really is as bad as people imagine when it comes to leftist groupthink.

        • Russell Taylor

          A good point, well made. As you say, we all want to be ‘good’ and we will generally define ‘goodness’ according to the values of our peers.

    • Kevin Ronald Lohse

      Are you a fan of Joseph Conrad? Boy! what a sentence. Liked the sentiment though.

      • DanV

        Hadn’t even realised that was just one sentence. I guess I can go on a bit myself…

    • Q46

      Blimey… and all in a single sentence. Impressive… true enough too.

  • smithy

    Labour politicians consider that the money you have earned belongs to the State. They think they are being generous in letting you keep 50% (out of which you then pay consumption taxes). You are a vassal, a slave of the socialist State.

  • therealguyfaux

    Important not to conflate that which is produced and owned and traded– “wealth,” with the method for keeping score of that product– “money.” Money, as we know, can be jiggery-pokery’d with in so many ways that I could not even begin to list them. Wealth, however, exists independently of the means used to measure it. Since a pound note is worth one hundred pence only because the State says it does, and is good for all debts, public and private, as legal tender only because the State says it is, the State DOES own the money, and you are rich “monetarily” only to the extent they let you keep it and not tax it from you. The State does not YET own all that is produced and owned and traded– the Wealth. But they mulct people who produce and own and trade– with taxes.

    Justice Holmes’s dictum of taxes being the price of a civilised society begs the question that it is a price based either on intrinsic worth, or else in instrumental worth arrived at through negotiation– and this is far from the truth of the matter. If we must pay a price for any good, we should be able to dicker with the vendor as to how much of the product we actually want and are willing to pay for. But such a view gets one branded as some sort of heretic, headed straight for the stake, I’m afraid.

    • Q46

      It would however be nice to have the freedom to try a society. without taxes. We only have Justice Holmes word for it that society would not be civilised without them.

      And apparently he overlooks that taxes primarily were needed to fund the King’s/tyrant’s household and territorial ambitions… the latter being one of the reasons for Magna Carta… and today taxes fund primarily the comfort and political and ideological ambitions of the ruling claque… so no change there.

      • therealguyfaux

        Justice Holmes was also a bit of a cynic, whose famous advice to the graduating class of Harvard Law School one year was never to confuse what’s legal with what’s ethical. His famous thought experiment was the Massachusetts Bad Man– who cares not two straws for what the law was, or should be, but rather, what he is likely to get away with if a case is ever sought to be brought against him– as that’s what the nub of it all actually is. Holmes’s take on contract law, as an overarching doctrine being worked out by Professor Christopher Langdell of Harvard in that era, was that it was and should be fairly well devoid of moral consequence, i.e., how much does it cost to break a contract versus to keep it, and to award that difference to the non-breaching party, and there’s an end of it without recrimination.

        Holmes no doubt in his heart of hearts probably believed in some sort of State above the minarchist level, see, e.g., the Lochner case of 1905, but one gets the feeling HE regarded taxes, and the State, as a necessary evil, perhaps more of an evil than Hobbes did, but sadly just as necessary.

      • Rocco

        Tax is the price we pay for not living in a civilised society.

        (That’s the theme of my post “How come you’re not an anarchist?”, as it happens.)

        We might also note that a man whose livelihood depended upon the existence of taxation singing the praises of taxation is nothing special.

  • tmitsss

    You shall not covet … anything that is your neighbor’s.

  • silverminer

    So long as you earned the money honestly, Russell, I agree with you. If you accumulated the wealth through fraud and deception then you need, not to be taxed, but brought before a court and tried for your crimes and, if found guilty, do time and have 100% of the ill gotten gains confiscated.

    Which brings me to my favourite subject, the Banksters. Banks misrepresent their business model as that of lending out money, that they have borrowed from savers, at interest, credit inter-mediation, and I’d have no problem with this if this is what they were actually doing. But it’s not! There is no “money” and hasn’t been since we left the Gold Standard. The money (i.e. the gold) has been stolen and we’ve been left with the receipts for the stolen gold. A “promise to pay” is not payment.

    What banks are doing is creating credit, more promises to pay, on the back of your “promise to pay”, i.e. a loan agreement, and lending it back to you at interest. They are charging interest on nothing and pretending that they’re lending something that has value! The fact that the State has issued them with a license to commit fraud makes no difference. Statute Law does not override Common Law. Fraud is fraud and these people should be in court.

    Banking in it’s current form is a parasitic activity that performs no useful social function. Banks are devices to put the people, and governments, in a state of permanent debt slavery for the benefit of a few. The people running these organisations don’t deserve a single penny of what they’re paid as it represents the proceeds of crime and should be returned to those who have been defrauded.

    By the way, can someone please explain to me how a bank can ever make a loss? If a bank creates £10k out of thin air and “lends” it to someone at 10% interest and they don’t pay it back, how has the bank lost anything? You started with nothing and ended with nothing, so you’ve lost nothing! What I think is happening is the banks are selling the loan on at, say, an 8% yield for £12.5K and booking the £2.5K as profit. Then when the borrower defaults the bank, or their insurer, has to make good to the buyer of the loan and then show the £2.5k as a loss. Bonuses have been paid on the profit and the tax payer, or pretty soon the depositor, picks up the losses. Nice work if you can get it and you’re not fussed about being a criminal operating a fraudulent business model.

    This is what Henry Ford was on about when he said “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”. Get the word out.

    It
    is well enough that people of the nation do not understand our banking
    and monetary system, for if they did, I believe there would be a
    revolution before tomorrow morning.
    Read more at http://www.brainyquote.com/quotes/quotes/h/henryford136294.html#0gHyyQAQMEkha3VY.99

    It
    is well enough that people of the nation do not understand our banking
    and monetary system, for if they did, I believe there would be a
    revolution before tomorrow morning.
    Read more at http://www.brainyquote.com/quotes/quotes/h/henryford136294.html#0gHyyQAQMEkha3VY.99
    It
    is well enough that people of the nation do not understand our banking
    and monetary system, for if they did, I believe there would be a
    revolution before tomorrow morning.
    Read more at http://www.brainyquote.com/quotes/quotes/h/henryford136294.html#0gHyyQAQMEkha3VY.99

    • John McEvoy

      ” Banks are devices to put the people, and governments, in a state of permanent debt slavery for the benefit of a few. ”
      Not quite. Banks are devices to put cash into the hands of ‘government’, and ‘government’ then reciprocates by forcing wage slaves to give up large proportions of what they earn in order to ‘finance the loans’ and provide a return on the conjured-up cash to the banksters. They’re all in it together. It’s a conspiracy against the tax-payer. Why do you think every radical politician invariably toes the line when they get into office? They are told how it works – or else.

      • silverminer

        But governments don’t need banks to create currency, John. Sovereign entities can print their own “promises to pay”, they have no need to borrow it from banks at interest (Bradbury Pound, Greenback, Guernsey experiment). Under a fiat system (which I’m not in favour of BTW) there ought not to be any “national debt”. It was different when we were on gold as it can’t be printed, hence deficits can only be covered by borrowing gold. The fact that there is a national debt gives you an indication of who has the whip hand in the relationship, the banks or the governments.

        The banks are allowed to perpetuate their fractional reserve fraud against the people and the governments do nothing about it, in fact they sanction it by issuing a restricted number of banking licenses. They aren’t allowing this because they need the banks to create currency for them, they can do this themselves, so it must be, as you say, because they are told that’s the way it is or else. Those who don’t comply get the bullet, literally.

        In the end the bankers own the world, bought with fictional money they create from nothing and lend out at interest. When we can’t pay, they seize the assets. Notice how that works, they start with nothing but made up ledger entries on a computer system then end up with the real assets, property etc. If it wasn’t so diabolical, I’d have to tip my hat to them for coming with such an audacious plan.

  • Q46

    But ‘the rich’ don’t work so marginal income tax rates do not affect them.

    Mostly theirs is unearned income from investments and capital gains, and they employ squads of tax lawyers and accountant to ensure they don’t pay anywhere near the marginal rates of people who pay income tax at whatever salary level.

    This is why from time to time we hear bleating from the Left that Mr Fatcat is paying a lower tax rate than a nurse (boo hoo) or a factory worker.

    And the same Labour politicians who yap on about ‘fair share’ are among those who have written over the years a complex tax code to enable them to do so, because they know otherwise, ‘the rich’ would foxtrot oscar to Switzerland or the Caymans and they would lose all those luverly campaign contributions, junkets on yachts and in villas in warm places, plus of course the play dough they provide by paying tax.

  • Mots

    Much less frequency of blogs in BP these days – are we running out of Bogpaper ?

    • Russell Taylor

      Must be the weather, Mots. We’ll be back up to speed shortly. Keep the faith.

  • John McEvoy

    ‘imagine if the state had a monopoly on something like computer manufacture in this country? We’d still be using ZX Spectrums and Commodore 64s..’
    .
    No – we’d all be using Amstrad PCW’s because the fabled Labour Peer with his Social Justice Network would have used insider influence to sign a monopoly contract with the State.