This is unlikely to work out well this idea. That a social psychologist brought in to aid the Scottish Government on coronavirus policy is to be used to set tax policy. This is going to work out about as well as using a butcher to set tax policy. The two sets of expertise – a butcher being an expert in some things, as we must assume a social psychologist knows summat about somthin’ – don’t quite map over tax policy.
Strangely, in these times, we might actually get better coronavirus policy if we did use tax experts to decide it. Because one of the things the tax people know is that when incentives change people change their behaviour. Something not coded into that Ferguson model of what people do in the face of a pandemic.
Still, this is not how to do it:
Scottish Government adviser backs 70 per cent tax rate to aid fight against coronavirus
Well, adviser in what?
Reicher, a social psychologist at St Andrews University, was announced as one of the experts on a Scottish Government group set up to understand the potential impacts of covid-19 on Scotland.
Hmm, well, what’s his application of his expertise here?
He told the Record: “My argument is based on the fact that social cohesion depends upon a sense of equity. The problem is that pandemics generally increase inequality and that in turn can lead to social disorder.
Ah, no, he doesn’t know what he’s talking about. We’re in a recession, oh boy are we in a recession. Recessions reduce inequality. For richer people gain a higher portion of their income from profits than do poorer. And what is it that tumbles the most, among the classes of income, in a recession? Good, well done, profits.
This is not, by the way, some controversially neoliberal kite flying about the effects of recession upon inequality. It’s simply a fact.
As to the actual proposal:
“Johnson’s message yesterday was full of war-talk. Well, remember, to ensure everyone played and paid their part in the war effort, top-rate income tax went up to 99.25% in the UK and 90% in the US during WW2. I’m not suggesting we go that far this time. 70% would be fine.”
70% income tax is well above the peak of the Laffer Curve. That is, it’s a tax rate which reduces revenue collected. Quite why collecting less tax revenue aids in paying for government expenditure is an exercise left to the student.
Or, of course, anyone else who knows what they’re talking about.