What Exactly Is Your Fair Share?

Samuel Hooper2 Comments

Tax Fair Share Flat Tax

 

As every British taxpayer knows, this week the coalition Conservative/Liberal Democrat government will announce its budget for the coming fiscal year. And as usual, there is much speculation about what bold, eye-catching new initiatives will be announced, which favoured groups will receive the best and most insulting handouts (10p per week increase for those on the state pension, anyone?) and which of our cherished vices such as smoking or drinking will be slapped with the biggest tax increases to raise money to pay for it all.

But probably the biggest pre-budget story at the moment concerns the speculation that the government is poised to repeal the last Labour government’s spiteful, punitive, ugly and counterproductive 50% top marginal rate of income tax which they imposed just before being booted from office, either eliminating it entirely in a stroke or reducing it to 45% as the first step of a phased elimination.

Cue much indignation, huffing and puffing from the British left, who talk all the time of the importance of “the wealthy” or “the rich” paying “their fair share”.

Their fair share. What exactly does this phrase mean? It is grotesquely overused in British political and fiscal discussions at the moment, by both left and right. It is used by the left as an attack – “taking benefits and tax credits from hard working people while never asking the rich to pay their fair share!”-  and by the right as a defence – “ensuring that we are all in this together, and that those who can afford the most pay their fair share”.

So what is fairness when it comes to tax policy?

You could argue that since we all live in the same country and benefit from the same infrastructure, public services and national defence, the total bill for government spending should be divided equally between all people of a working age in this country. We can all avail ourselves of the public schools, the National Health Service and the roads in this country, so we should all pay the same toward their continued existence. So what if you’re on minimum wage and your tax bill for the year is greater than your income? Well, everyone has to pay their fair share, so better get a second, third and fourth job if you want to pay your tax bill and still eat. Otherwise it’s not fair to everyone else.

You could argue that some people use certain public services a lot more than others, and that aside from the national umbrella of national defence it is not fair to make any two people pay the same amount if they use different services, and that the best thing to do is to abolish the majority of taxes and move toward a pay-per-use scheme. So what if you’re on minimum wage and you don’t have the money you need to see the doctor? Too bad, you’ll have to make your own arthritis medicine yourself out of pressed flowers and tree bark.

You could accept that those who have been financially successful and/or fortunate should shoulder a greater burden of government spending in real terms, but that to ask them to pay a larger proportion of their incomes just because they are rich is offensive and unfair, and in this case you would support a flat tax system, where everybody pays the same rate. Everyone then gets access to the public services that they need, and everyone pays the same percentage of his or her income to support those services. Perfectly fair, no?

Alternatively, you could accept the premise that those with greater incomes should pay a higher proportion of that income in tax, in addition to paying more purely in real terms. And that’s pretty much the system we have in place here and pretty much everywhere else in the western world, a stepped, progressive tax system. If you earn little to no money you pay little to no tax either in real terms or as a percentage, and as your income grows, so does your tax liability. A lot of people think that this is fair.

My point is that each of these solutions can be described on one way or another as being “fair”. The word doesn’t really mean anything on its own, it is only given meaning through the context in which it is used, which is entirely based on your political beliefs. But in British political discourse it is always used to mean, in some general fuzzy way, that “other”, “richer” people more prosperous than us than us should pay more to cover all the bills. It is used lazily to impart a pious aura of nobility to demands for what are already significant transfers of wealth from the rich to the poor in this country at best, or counterproductive and demotivational daylight robbery at worst.

Under the present tax code in Britain, if you earn more than £150,00o in income in a given year, each additional pound you earn above that level to infinity is taxed at 50%. The income you earned between about £40,000 and £149,999 was taxed at 40%. And this doesn’t include the other huge tax-in-all-but-name, National Insurance, which means that many people earning much over £70,000 pay marginal tax rates greater than half of each additional pound that they earn. A yearly salary of £70,000 may sound like – and be – a lot of money, but if you are a family on a single income with several children, living in the South East, you’re not exactly the Monopoly Man. What’s fair about asking for more than half of that person’s hard-earned pay rise in additional tax contributions?

In order to win Liberal Democrat approval to cut the top rate of income tax down from the punishingly high 50% level, the Conservatives will doubtless have to make a number of concessions. Some of these may yet be sensible, such as moves to shift the burden of tax away from earned income (i.e. more ‘productive’ money) and more toward unearned income and wealth. This would help to ensure that income is reinvested in the economy, though whether it is the role of government to meddle in this way is not entirely clear. Some of the other concessions will doubtless take the form of yet more envious, baseless pokes at the rich. It is probably worth the government’s while taking most of these jabs in good humour in order to ensure the repeal of one of the highest marginal tax rates in the western world, a huge dampener on British competitiveness.

But whether the top rate drops down to 45% or back to 40% where it has been since Margaret Thatcher’s day, prepare for a lot of noise from the left and a lot of opportunistic point-scoring from the Labour Party. Be assured that these talking points have already been written and are waiting to be deployed as soon as George Osborne stands up at the despatch box in the House of Commons to read his statement. We will hear that he cares only about looking after his rich friends and is not concentrating on doing anything for the poor (because, of course, the government can only ever have one priority at a time, the rich OR the poor, and a policy that ostensibly benefits the rich could never also benefit the economy as a whole, and therefore everyone who works in it – and no, I’m not talking about “trickle-down economics”). We will see every rhetorical trick under the sun being deployed to convince the population that now is the wrong time to be focusing on “the wealthy few” when “the hard-working majority” are suffering. So expect all of this, and more. But regardless of the merit of these individual arguments, they all miss the point by a country mile.

Are there a myriad of loopholes in the current tax code that need to be closed? Absolutely.

Do further efforts need to be made to clamp down on tax fraud, and make tax avoidance more difficult? Sure.

Do we need to look again at tax rules for non-domiciled individuals, in terms of their income and property taxes? Almost certainly.

So let’s press for the government to include such measures in the upcoming budget.

But please, let us separate these issues – and the plight of the multi-millionaires and billionaires and bankers and premier league footballers that we hear about in the newspapers – from the doctor or accountant who maybe earns £200,000 a year and who now doesn’t want to take on that extra patient or new client because she is worn out, working hard trying to get ahead and to pay her “fair share” to an insatiable country.

On Grover Norquist And Ideological Headlocks

Samuel HooperLeave a comment

From The Boston Globe, an interesting long-form profile of Grover Norquist, the founder of Americans for Tax Reform  and promoter of the famous (or infamous) “Taxpayer Protection Pledge”:

http://articles.boston.com/2012-03-18/magazine/31199550_1_pig-farm-rocky-ledge-speech

The article is well worth reading, if for no other reason than the fact that we should all better understand the man who works quietly in the background in Washington and across the country to squash any efforts to raise additional government revenues, and who effectively owns the political souls of the vast majority of the congressional Republican Party. At the present time, an astonishing 238 members of the House of Representatives and 41 Senators are signatories to “the pledge”, including 97.5 percent of the entire Republican congressional delegation.

Few other special interest groups – even lobbying powerhouses such as the National Rifle Association – can boast such levels of fealty from elected representatives.

The only problem is that Americans for Tax Reform is obsessed with treating only one of the two symptoms of America’s fiscal malaise, and couldn’t care less about the underlying illness (the structural deficit). Seeking to cap the revenues that government can collect is all very well and good, but there is nothing bold or patriotic about doing that while doing nothing, or in some cases, actively thwarting efforts to make a serious effort at reducing expenditures, such as those outlined in the Bowles-Simpson committee proposal.

The following passage from the article lays bare, once again, the automatic, unapologetic contradictions at the heart of today’s GOP:

Jon Golnik, a Republican pledge-signer who was unsuccessful in his 2010 bid to unseat Democratic congresswoman Niki Tsongas, tells the crowd he’s running again and rails at the out-of-control spending of the Obama administration. He rattles off a host of statistics about the implications of the national debt that are so sobering they might give even a Keynesian pause.

When Golnik begins taking questions from the audience, the first comes from a North Shore man named Edward Purtz, who asks with furrowed brow: “We’ve seen the Navy cut to levels it hasn’t been since the 1800s. How do you stand on these defense cuts?”

Without missing a beat, Golnik replies, “I oppose them.”

I would point out that, as frequently said by Ron Paul, it is entirely possible to actually increase spending on national defence while cutting overall military spending by extracting America from costly foreign entanglements. I could further point out that comparing the number of ships in the US Navy in 1800 and 2012, noting a fall and interpreting this as a decline in relative naval power is about as stupid as it is possible to be, given the fact that any modern frigate or destroyer could make short work of the entire 19th century fleets of every naval power and not suffer a scratch, but again this is rather beside the point here.

Today we have a Republican Party caught in an ideological headlock by the likes of Grover Norquist and fired-up tea partiers, all of whom talk incessantly about cutting and balancing the federal budget, but all of whom reflexively oppose cutting their own pet projects, or those large parts of the non-discretionary budget that account for the vast majority of spending.

The interviewer in one passage asks Norquist that, given the fact that government spending as increased in real terms every year since the 1960s, has his personal crusade not been a complete failure?

Following our lengthy discussion about runaway spending under Bush, Norquist stresses that ATR’s “ultimate goal is to reduce the size and scope and cost of government as a percentage of the economy, so we want to spend less and not raise taxes.”

“So,” I ask, “that has been a complete failure, right?”

“No,” Norquist replies and begins to speak extra slowly. “The line in the sand on taxes has been very successful.”

And there we have it, folks. Defending the line in the sand – no new taxes, ever – is what matters, the only thing that matters at the moment to those on the tea party-hijacked right. They won’t look for additional revenues anywhere, under any circumstances. They talk loudly about slashing the budget but single out their pet projects for exemption and fail to seriously engage on the topic of cutting spending in the key areas which drive the federal budget deficit. And still they call themselves the party of fiscal responsibility.

Truth Or Snobbery?

Samuel Hooper3 Comments

Steve Silverman today lets rip in The Daily Telegraph on the subject of British classical/crossover singer Katherine Jenkins, in a very amusing and persuasive tirade:

http://blogs.telegraph.co.uk/culture/stevesilverman/100061641/katherine-jenkins-hasnt-got-the-voice-or-the-technique-to-sing-opera-so-why-does-she-pretend-that-she-can/

For those without the time or inclination to click the link, I can assure you that the article’s title – “Katherine Jenkins hasn’t got the voice or the technique to sing opera, so why does she pretend that she can?” is about the kindest line in the whole thing.

Silverman takes objection both to Jenkins’ niche in the market (classical-sounding music rendered with heavy studio effects, and pop ballads sung in Italian to add gravitas) and to what he considers to be her outrageous claims to be be a “classical singer”.

He writes:

“As it happens, I would be surprised if anybody were actually to begrudge Jenkins the fame and wealth she has acquired from her career as a crossover artist. As a performer of middle-of-the-road ballads and pop songs (often translated into Italian for added gravitas) delivered in an innocuous pseudo-classical voice, she is inoffensive and even preferable to many who ply their trade in this section of the market. It is in allowing herself to be promoted as an opera singer that she has earned the scorn of those who care deeply about that particular art form.”

And goes on to say:

“Opera singers are unique among those who have made their careers in the performing arts. They study for many years in pursuit of developing voices that are beautiful, resonant and seamless across a range that can be more than twice that of any other type of singer in Western music. They learn how to use their instruments to convey, in at least four different languages, every possible emotion that a human being can feel. And the miraculous thing is that, without the aid of any electronic amplification, they do all of this over the top of a large orchestra in spaces big enough to hold thousands of people. As if that were not sufficiently remarkable, they also create fully-rounded and widely varying characters during evenings that last for several hours, often while wearing uncomfortable costumes and negotiating their way around awkward sets.”

This latter point is very true. To attend a really good operatic performance is to be amazed at the technical skill of the performers, in their ability to master their voices in such a way that makes people like me (far better suited to belting out semi-in-tune songs during pub karaoke nights) sit and listen in open-mouthed amazement.

Silverman offers an excellent compare-and-contrast of two performances of the same area – “Una voce poca fa”, from The Barber Of Seville – one by Jenkins, and another by Elīna Garanča.

First the Jenkins:

 

And then the Garanča:

 

There is no comparison between the two. One (the Jenkins) is a heavily muffled and amplified performance betraying a weak and untrained voice that is totally unequipped for the demands of the piece, and the other (the Garanča) is…well, the polar opposite of that.

Mean as it sounds, Silverman is not wrong when he writes of the Jenkins performance:

“This is a ferociously difficult piece that shows off the technique of a good singer, and shows up that of a bad one. It is immediately obvious which category she falls into, as the demands of the aria elicit from her the response of a deer in the headlights. The rapid runs are beyond her, with notes being either smudged together until they are indistinguishable from one another or omitted entirely; she repeatedly loses her support and vocal placement; and the two terrified screams at the end that pass for high Bs are less at home in the theatre than they would be on a labour ward.”

Ouch.

Which I suppose brings me to the point of this piece: I find myself thoroughly in agreement with the premise of Steve Silverman’s article. And probably like many other classical music fans, I feel a slight sense of shame in admitting it. Why? At least partly because of the “snob” factor that hangs around the neck of the classical music and opera worlds like an albatross. The “you just want to keep classical music the exclusive preserve of you and your Waitrose/Whole Foods-shopping middle class friends and hate the idea that it be dumbed down in any way for the masses to enjoy” argument that is often brought to bear against people who push back at crossover’s claims on legitimacy in the world of classical music.

This argument is wrong. Well, aside from the second part. I shop at Asda, the UK subsidiary of Wal-Mart these days. And I want everyone to be given the opportunity to enjoy classical music (as I wrote in a previous blog post, I became a Patron of the London Symphony Orchestra several years ago to help support this very objective), though of course many people freely choose not to listen to it. But I do hate for classical music to be dumbed down. And while I believe crossover artists such as Jenkins have every right to do their thing, and to become rich and successful in the process, I don’t believe that they deserve to be compared to those musicians who take the time and the effort to truly master their instruments in order to do justice to the music as it was written, and not as it was dumbed-down and cheesily reorchestrated by the writers of such TV reality shows as “Popstar to Operastar”.

I used to receive Classic FM TV as part of my Sky TV subscription. God knows why I ever watched it, but I sometimes would, sitting through endless hours of Jenkins-genre performers belting out well-known arias, often with a synthesised orchestra and a gentle drum rhythm in the background (gotta have a drumbeat these days, what was Verdi thinking forgetting to include a lively drum kit solo in the middle of “Gia nella notte densa”?!) in place of the original orchestration, waiting for the rare occasion when a performance by a “serious, classically trained” musician that I liked would come on. Looking back at it now, I’m glad that someone recently threw a stone at my satellite dish, knocking it out of alignment, so that I can no longer view this channel even if I lost my mind and attempted to do so again.

At this point, a disclaimer is necessary: I am in no way a classical music traditionalist. My favourite classical musician is the late pianist Glenn Gould, who was about as unconventional as they come in terms of many of his interpretations of the major piano repertoire. Glenn Gould was, for a time, the most famous classical pianist in the world, particularly lauded for his recordings of Bach’s keyboard music, which (if you compare them to older recordings) are revolutionary and sound as though someone has flung open the windows to a dark, stuffy room that has been locked shut for years, allowing new light to shine in for the first time in centuries. Many fine Gould performances are easily searchable on YouTube, and I encourage those unfamiliar with him to look. The difference between the Glenn Goulds of the world and the Katherine Jenkinses is that legitimate classical music “superstars” achieve their fame by illuminating the music, combining ‘mere’ technical mastery (which abounds in the graduates of many of the best music conservatoires) with another, hard to define quality, the ability to shed new light on a well-known piece, or to bring a fresh perspective and interpretation to bear on their chosen repertoire. The pretenders cloud the music rather than illuminating it, hiding either the composer’s original intentions, or just the true complexity and beauty of the music.

For this reason, I also happen to believe that to some extent the success of the crossover genre may be actively preventing rather than encouraging people to learn more about classical music, providing the newly curious with a reassuring set of water wings (armbands), enabling them to float comfortably in the shallow children’s pool of pseudo-classical music rather than discovering the riches and intellectual and emotional pleasures that can be found in the olympic-sized pool of the entire classical repertory. I’m not saying shut it down, or that crossover artists are evil – as this blog makes clear, I am a firm believer in the free market. Let’s just call it a significant negative externality.

So my Springer’s Final Thought for this post: Good luck to Katherine Jenkins and those many others in her genre. Jenkins seems to have a huge chip on her shoulder about not being taken seriously, which is a shame. Because she should be taken seriously and afforded all due respect, in the genre in which she operates. It’s just that this genre is not classical music. And when she (and others) try to perpetrate the story that they are in any way equivalent to classically trained musicians, unfairly looked down upon by the elite because of their good looks and material success, they simultaneously misrepresent themselves to the public, and do a great disservice to those countless musicians who are infinitely more talented, many of whom will work in obscurity and poverty for much of their careers, in service to their art.