Monday, 1 October 2007

Swing Voter

A while ago, I pointed you, dear reader to Giles' blog, Swing Voter. He's a centrish type and I am interested in what he thinks, especially as he appears to have a genuinely open mind about which party he's going to mark his X against. In his most recent post he makes the assertion that

"I'm proud of the amount of Tax I pay"
That's what we're up against people. He used to work in the city, and therefore hopefully has some understanding of economics, but it is this conflation of tax and virtue is what really pisses me off about the centre. It's just so fucking smug - not to mention idiotic.

The left are honest. They want high taxes because they want to hurt the rich. They are envious and spiteful and don't mind showing it, because it plays well with the grockles in their constituencies, who really don't care that tax is like glue in the machinery of the economy - which, being either employees of the state or unemployed, doesn't really affect them.

The centre doesn't want to upset the aspirational, but thinks that some redistribution makes society better. I agree, up to a point. Redistribution beyond a safety net to prevent absolute poverty however, means the state actively subsidises catastrophic lifestyle choices to everyone's harm. The welfare state is a disaster for its "beneficiaries" who lose aspiration and self-respect and everyone else, who pays for it. Not just because of its cost, which is vast, but because of the opportunity costs of paying people to do nothing. That's before I make the assertion that much anti social crime is because of boredom by nihilistic unemployed people.

The welfare state makes the UK absolutely poorer, but uses sophistry to sell it to the population. Income inequality as defined by academics and the Labour party is not perceived as a problem by most of the population, who assume that poverty is defined as
"not having enough to buy basics like food and clothing"
"having to struggle to survive each and every day"
rather than
"having a lot less than everyone else"
The report cited polled in Canada, but I would be very surprised if the numbers were wildly different in the UK - just 1.8% opted for the relative measure of poverty.I am not against public services, but Everything the state does, it does badly and expensively. The exception is the Military, but they have had 450 years of continuous warfare and they either get it right or get a sucking chest wound. Incentives, you see. The state is at once malign and incompetent because everything it does is replete with monopolistic producer interest - the incentives in the system are counter productive to good, efficient public services.

Economics is the study of incentives and the search for maximum utility with scarce resources. I have no problem with taxpayer funded services like health and education, indeed I think in health particularly, the poorest need the most and would therefore have the highest premiums in an insurance based system, which is unfair; it is the monolithic nature of the NHS that is the problem. Break it up, and let the tax-money follow the patient. I also advocate a tax-payer funded voucher system for schools. Let those with the most at stake guide the flow of money. It's called the market and it works.

Which brings us back to the original problem: Tax as a moral issue. Funding of the public services is not the problem, especially after a decade of fire-hosing money at them - this is an issue more of delivery, which is shit. This is what most centrists use as an argument for higher tax: so that there can be "investment" (don't get me started) in the public services. What high taxes are actually being used for is to pay public servants over the odds and to create a client state of welfare recipients which includes more or less anyone with a family, to Labour's electoral advantage. Is this moral?

This huge sum of money is taken off poor people at source, swilled around several hundred thousand civil servants and some of it given back to them. Is this "fairer" than raising the threshold at which you pay tax, when someone working full time on the minimum wage faces 90% marginal tax and tax as a percentage of income equalling that of the higher rate taxpayer? (because the rich pay accountants to drop their rate and the poor spend more on petrol, booze and fags as a proportion of their income) Why take it off them in the first place?

I do not think high tax is immoral - wrong, inefficient and stupid certainly but taxes' utility is a debate worth having. What I have a problem with is sophilistic argument, smugness and general cuntishness of the Blair/Brown project, in particular the dishonesty of the Gordon Brown tax regime. If you're convinced that high taxes are the way forward, vote lib-dem. The Tories will cut taxes when and if they can, because it increases utility from scarce resources, whether or not it increases revenues. But I urge you not to consider it as a moral issue.


Cleanthes said...

I'm going to struggle to counter the argument that fear of a sucking chest wound is a powerful incentive...

Great post.

Mark Wadsworth said...

Jackart, great post, I agree with all of it, except the bit about "Tories will cut taxes", that's not the message that I am getting.

There's up to £100 bn of gummint waste per annum, that's enough to fund a whole load of tax cuts.

lost_nurse said...

"The exception is the Military..."

Where do QAs get their trauma and critical care expertise, eh?

Entirely understandable (& warranted) that - having served - you hold HM Forces in high esteem. But it's disingenuous to claim that nobody else understands the meaning of duty.

JayN said...

lost_nurse - I don't think the point is that the forces are the only ones that understand the issue of duty, rather that they are better at being efficient with their resources. Although it goes against common opinion, UK forces operate with a scarcity of kit, therefore it is incumbent on them to find the most efficient way to use it, otherwise their primary resource, trained men and women, die and have to be replaced. Something which it is hard, expensive and time consuming to do.

Of course, the MOD manages to be quite incredibly wasteful and inefficient, especially during the procurement process, but I think the general point, which might be recast as commissioned officers run their units considerably more efficiently than administrators run hospitals, withstands scrutiny.

Jackart said...

My point was however dutiful the sainted teachers and nurses are, they are still in thrall to producer capture.

Duty is not a powerful incentive.

Watching your mate drown in his own blood is.

lost_nurse said...

Not disagreeing, Jayn - most of my family are either 'in', or have been. It's just that in these debates, I sense a hefty dislocation between the idealised "healthcare market" and messy reality.

lost_nurse said...

"Watching your mate drown in his own blood is"

What, and watching (not watching, obviously) a patient bleed out is somehow different?

Spare me the "producer-interest" tag, ffs. Would you do my job? What do you think my day involves?

I agree with you about the excesses of the welfare state, mind. Curb it big style.

Jackart said...

Mark Wadsworth. Yes. They. Will. Cut. Tax. When. Possible.

What part of "Share the proceeds of Growth" do you not understand. For fuck's sake.

Jackart said...

Yes, but the NHS doesn't trust nurses. It's the administration that's the issue. A more decentralised system would trust the Doctors and Nurses.

I'm not saying that nurses don't do a good job, But hospitals are run badly.

lost_nurse said...

"Yes, but the NHS doesn't trust nurses. It's the administration that's the issue."

Fair enough - & well said. You just caught me on a sour day... :)

C4' said...

Please read this Mr. Jackart

Giles said...

By the way, and not wishing to risk a sucking chest wound I will leave it at this, I did not mean by "proud of the taxes I pay" to mean "jolly glad we have a high-tax system pointlessly subsidizing criminality at the bottom and waste in the Civil Service", though no doubt through a red mist the two can look uncannily similar.

I meant: a great many in my class see it as their personal duty to avoid tax and somehow confuse libertarian arguments with a justification for this. I think: given the system we are lumped with, efforts to dodge taxes by the wealthy mean the same amount going to the Treasury, and therefore going from the low earners (the 90% marginal payers you refer to). I would like the system to be changed, but avoiding taxes would not have helped. And the byzantine complexity of the system is to some degree caused by the ingenuity exercised by wealthy taxpayers.

It was not a particularly political point. Taxes should be lower, at least at the bottom end where the incentives really kick in. What do you think of the 16% standard rate the LD's propose?

Jackart said...

Giles, you've got it arse about face. The ability of the wealthy to avoid tax is a result of a byzantine tax system.

I am a flat taxer, but am happy with progressive taxation, if the complexity, loopholes and reliefs are removed.

Simon Jester said...


As I have pointed out before, "Sharing the proceeds of growth" sounds like a commitment to redistributive taxation. Which part of the word "Sharing" do you not understand?

Simon Jester said...

Giles, I don't know whether I am someone in your class. (And it's not clear whether you're conflating class with income group.)

However, when you say that a great many "see it as their personal duty to avoid tax and somehow confuse libertarian arguments with a justification for this", I think you may have failed to understand libertarian arguments.

Involuntary taxation is normally deemed immoral by libertarians. As such, any reduction in the amount taken without consent is therefore an improvement; on this ground alone, there is a libertarian argument for avoiding tax.

Additionally, tax raised will probably be used to curtail the freedoms of others (although this is more of a consequentialist argument than a "pure" libertarian principle.)

Also, I think you are being naive when you assert "efforts to dodge taxes by the wealthy mean the same amount going to the Treasury, and therefore going from the low earners". The government invariably spends as much money as it can get its hands on; raising more money from the higher earners doesn't reduce taxation on the lower paid, because the government just spend the extra cash.

Jackart said...

Simon Jester

I have been through the fucking Sharing the proceeds thing before.

If you can't see that "Sharing the proceeds of growth between TAX CUTS on the one hand and public services on the other" is a growth rule (ie grow spending slower than the economy) then I'm afraid you're fucking stupid at best and a Labour fifth column traitor willfully stirring things up at worst.

Which is it - stupid or malign?

Simon Jester said...

Jackart, neither. I just don't trust Dave.

Giles said...

Simon Jester

Not sure I am doing any favours keeping this one going but:

I am not sure governments spend basis the receipts they get. I think spending budgets are set, and financial income is anticipated, and then the balancing item is the borrowing, which swings around as economic cycles, unanticipated fraud, etc change matters. Lower receipts -> higher borrowing -> someone else paying. Otherwise, one might hope the massive VAT fraud going on right now is a GOOD thing.

I am also sceptical that I could be said to be in the right if I simply said "By the way, I'm a libertarian and didn't approve of this particular tax, so to be moral I'll avoid it somehow (conveniently avoiding immorality AND keeping rich)". I've signed up to the laws that get passed, including the ones I think are f***ing stupid, which includes a surprising amount Tories would agree on.

I think the current tax system has to be taken as a given, the correct way to change it is via the democratic process, as Tory Dude et al are undoubtedly trying to do.

Whereas a mass-evasion of the tax would not result in low-tax nirvana, just speed up the cat-and-mouse game. Though governments as a practical fact ought to realise that the more they pass that is resented, the more they undermine faith in the system itself.

Jackart said...

Agreed. Politicians are lying scumbags. Tory politicians just cost you (a bit) less.

Simon Jester said...


In the comparatively short term, spending budgets aren't directly determined by current receipts. However, over a slightly longer period of time, they effectively are. It's quite difficult to continue borrowing when there's no prospect of the loans ever being paid back, although some third world nations seem to manage it.

"I've signed up to the laws that get passed, including the ones I think are f***ing stupid," - I haven't, although I may choose to obey them - "which includes a surprising amount Tories would agree on" - and I don't consider myself a Tory per se, although I may vote for them.

"I think the current tax system has to be taken as a given" - talk of avoiding tax (as distinct from evading it) does take the current system as a given*.

"Whereas a mass-evasion of the tax would not result in low-tax nirvana, just speed up the cat-and-mouse game" - it's difficult to be certain, as the one thing governments tend to be fairly good at is plundering other people's pockets - if they can't do it directly (by taxation), they'll do it indirectly (by debasing the currency, ie. inflation). However, the point of these posts was whether it is moral to pay / avoid tax.

* - of course, the distinction between tax avoidance and tax evasion can become blurred, as measures undertaken solely for the purpose of tax avoidance have been classed as tax evasion since the mid 1970s...

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