Look into the table. Tell me what you see

Ben Chu

This table published in a blog by the Spectator’s Fraser Nelson is, I expect, a political Rorschach test: people will see in it what they are predisposed to see.

nelson Look into the table. Tell me what you see

Nelson sees the table as evidence that cutting marginal tax rates is “progressive”. He argues:

“The highest-paid 1 percent will generate 23 percent of income tax collected in the UK in the year before the 50p tax. And spot the correlation between the top tax rate, and the burden shouldered by the richest and the poorest. Which are the most progressive – the figures on the right, or the figures on the left?”

I suspect most progressives will see in the table evidence that income inequality has exploded in the past three decades. They would argue that the reason the top five per cent are paying a greater proportion of the income tax take now is that their incomes have grown at a much faster rate than the rest and have been taxed accordingly.

I think Nelson is probably justified in arguing that the Thatcher era reductions in marginal income tax rates helped to make Britain a wealthier nation overall. But his implication that Britain is a more equal country because of those reforms, or that they somehow made the tax system more progressive, does not convince.

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  • iRadar

    Nelson has obviously not properly considered cause an effect. Quite right that what he has seen is what he wanted to see. This data would only be relevent if shown along side the proportion of the wealth controlled by each income level.

  • pilsden

    why did you leave the bold print point one out of the quote that preceded the table and quote ,

    “We may hate to admit it but the British tax base, and our chances of reducing the deficit, are heavily reliant on a handful of very rich people.”

    you also have chosen to ignore the fact that the IFS suggests the 50% tax will lose tax revenue.

  • Oscar Weird

    Yes, richer people will pay more income tax. Poorer people will pay less. Under the Rusty Lady and NAff Labour the difference between rich and poor vastly increased. It is no surprise therefore that the rich pay more tax based on income. The idea that they want to, or they are worthy for so doing, is hilarious.

    I can already here the nice but dumb morons on the right saying that a) it is the rich that make us prosper, and b) they should be rewarded by paying less tax. Chybagger hints at this with his comments about Thatcher and marginal rates of tax. How much are you paid for this, Ben, old lad?

    I tend to regard the rich as either a gang of silver spoon inheritors or profiteers. I would admire your average successful businessman with the same degree of approval as the average Somali pirate.

  • LancashireLad

    I can see a woolly mammoth balancing on it’s trunk.

  • Office Space

    The highest-paid 1 percent will generate 23 percent of income tax collected in the UK in the year before the 50p tax” – agree so much!!!

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