Here is an article on how the UK-based artist, Tracy Emin, wants to leave Britain because of the upcoming new 50 per cent top income tax rate. It kicks in by the start of next April and once changes to pension and national insurance are taken into account, the effective marginal rate is nearer to 65 per cent. The tax will be on annual earnings of 150,000 pounds and above. That sounds a huge salary to someone like yours truly, but the sort of entrepreneur we need to fuel an economic recovery is likely to make that sort of money if things go well. A marginal bite of 65 per cent is likely to force such entrepreneurs to cut back on the necessary risk-taking that such ventures require. And as the article I linked to suggests, the additional revenue that officials claim will be raised will be just 2.5 billion quid – and arguably, the disincentive effect of the tax hike will reduce revenues. And never mind just the utilitarian arguments against steeply progressive taxes. As FA Hayek memorably put it in the Constitution of Liberty, there is no objective rule that would allow anyone to decide why a person who earns, say, X per cent more than the median income should pay, for example, 50 per cent on earnings, or 60 per cent, 70 per cent, or whatever. One might as well toss a coin. The “principle” of progessivism should be seen for what it is: legalised looting.
It tells you everything you need to know about Britain’s plight that people are now thinking of going to live in France because its taxes are, at least in some respects, lower. Given all the other benefits of living in France, such as the greater land area and fabulous food, the idea of heading south across the English Channel has a lot to recommend it. And I am typing these words in Malta, where the weather is – mostly – miles better than in England, although ironically we had a massive storm on Thursday evening – the same one that has hit southern Italy. But the place is economically quite lively now, judging by the sheer racket from the construction sites everywhere.
Oh, by the way, my blogging activity has been slack these past few days but I have the excuse of having done my PADI scuba course, which was successful. We haven’t yet worked out how to blog under water. Not even scuba enthusiast and internet maestro Glenn Reynolds seems able to do that.
