I'm not sure I agree with the conclusion. One can agree with the existence of a black hole while disagreeing with government's plan to close it. It's not inconsistent to think that government borrowing is too high but that it can be reduced by soaking the rich, for example.
Neither is it inconsistent to think that government borrowing is too high but that it can be reduced by drying the rich, making them more free, along with those who aspire to be. For example, Saez and Diamond show the revenue maximising income taxation on the highest earners is in the 51-57% range. The top rate in the UK (all 3 main types of income taxation) is 68.5%. Slash that to 48.5% and all the people who've planted their taxable income in the high 90,000s might take on more work.
What's the other one apart from income tax and NI? They only collectively get you to 48.25% (or 43.25% for those under 150k). Sounds like it's a little bit under that optimal range. What am I missing here?
(Also in general I think it is a mistake for economic right-wingers to make Laffer-curve-type arguments, since quite apart from being unsupported by data, the Laffer curve idea ultimately rests on the notion that the purpose of the tax code is to maximise government revenue - Marx would approve!)
The two types of NI are employees' NI and employers' NI, the second of which for employed people is 13.8% in the range we're talking about. Employers' NI is incident on the worker as it reduces the total compensation that can be paid to the workers so I'm including that.
But even leaving out the two types of NI, the top rate of income taxation is 60% and applies in the income range 100k - 125k.
Laffer curve arguments are useful as they make government consider behavioural changes. The tax cut that more than pays for itself is the Holy Grail for classically liberal minded people.
I'm not sure I agree with the conclusion. One can agree with the existence of a black hole while disagreeing with government's plan to close it. It's not inconsistent to think that government borrowing is too high but that it can be reduced by soaking the rich, for example.
Neither is it inconsistent to think that government borrowing is too high but that it can be reduced by drying the rich, making them more free, along with those who aspire to be. For example, Saez and Diamond show the revenue maximising income taxation on the highest earners is in the 51-57% range. The top rate in the UK (all 3 main types of income taxation) is 68.5%. Slash that to 48.5% and all the people who've planted their taxable income in the high 90,000s might take on more work.
What's the other one apart from income tax and NI? They only collectively get you to 48.25% (or 43.25% for those under 150k). Sounds like it's a little bit under that optimal range. What am I missing here?
(Also in general I think it is a mistake for economic right-wingers to make Laffer-curve-type arguments, since quite apart from being unsupported by data, the Laffer curve idea ultimately rests on the notion that the purpose of the tax code is to maximise government revenue - Marx would approve!)
The two types of NI are employees' NI and employers' NI, the second of which for employed people is 13.8% in the range we're talking about. Employers' NI is incident on the worker as it reduces the total compensation that can be paid to the workers so I'm including that.
But even leaving out the two types of NI, the top rate of income taxation is 60% and applies in the income range 100k - 125k.
Laffer curve arguments are useful as they make government consider behavioural changes. The tax cut that more than pays for itself is the Holy Grail for classically liberal minded people.
Oh this is an effective marginal tax rate due to the removal of the personal tax allowance, right? Got it.
("The tax cut that more than pays for itself" is indeed the Holy Grail for classical liberals, but, also like the Holy Grail, it doesn't exist.)
Unbelievably depressing how the media continues to beef up the argument that suits their narrative.
Is there any newspaper actually giving an objective view?