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Talk about missing the point that Gary Stevenson was making. The point he was making was not that the tax policy of the 50s,60s, and 70s meant the rich paid a b

by mempko 1y ago

Talk about missing the point that Gary Stevenson was making. The point he was making was not that the tax policy of the 50s,60s, and 70s meant the rich paid a bigger share of the income tax in aggregate, or that the income tax brought in was a higher percentage of the GDP. The point Gary was making was that inequality (wealth and income, but especially wealth) was much lower back then and has been growing ever since. The data in the article proves Gary's point. Not only is income tax brought in less now, but more taxes are VAT (sales taxes) which are regressive. In other words, the poorer people in society are taking on a bigger share of taxes. They are transferring them from a progressive tax system (income and wealth taxes) to a regressive one (sales taxes and VAT). Talk about missing the whole point of Gary Stevenson's argument. The point was that inequality was less back then and the tax system was one reason why. Now inequality is high and keeps getting higher. So yes, we want to go back to the tax system of the 50s, 60s, and 70s not because of getting extra taxes, but because it slows down and may reverse the rise in inequality.

RhysU 1y ago
> Now inequality is high and keeps getting higher. Gramm et al's book, or at least the first couple of chapters, are worth reading on this topic. Oft-quoted official statistics neglect taxes and transfer payments. There is definitely a large uptick at the top 5% but the spread across the lower 80% isn't as strong as it often is stated, according to Gramm and his co-authors. https://en.wikipedia.org/wiki/The_Myth_of_American_Inequality https://en.wikipedia.org/wiki/The_Myth_of_American_Inequalit...
- deleted 1y ago
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- jollyllama 1y ago
  That doesn't necessarily negate the point that inequality is high and keeps getting higher. It all depends on what your definition of inequality is. Ironically, it is the transfer payments which Gramm decrees that wind up enriching that top 5% the most, they are basically farming the lower classes to line their pockets at the expense of the middle and upper middle, who pay a disproportionate share of the taxes.
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- mempko 1y ago
  Robert Ekelund, one of the authors, wrote pro-smoking articles for the tobacco industry. It's hard to trust someone like that and any data they present. It would take a lot of work to read those chapters and not only confirm the data they present, but also find data they aren't presenting, or deliberately omitting to make their case. Is there another book making the same argument that doesn't have this baggage?
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  - RhysU 1y ago
    Yes, one such book is Thomas Sowell's "Basic Economics" 5th Edition. Page 209 says... > A simultaneous rise in rewards for work and a growing welfare state that allows more people to live without working virtually guarantees increasing inequality and earnings and incomes, when many of the welfare state benefits are received in kind rather than in money, such a subsidized housing or subsidized medical care, since those benefits are not counted in income statistics.
    - mempko 1y ago
      So he's arguing that inequality increases with the welfare state? Doesn't that contradict the claim made earlier? Or am I misunderstanding the quote?
      - RhysU 1y ago
        Sowell's arguing that neglecting to include welfare transfers makes inequality look worse than it is. Especially when there are stark differences in earnings as a consequence of working. If you earn $5 and the state gives you $45 in assistance, you practically have $50. If I earn $200 and the state taxes me $100, then I practically have $100. The income inequality is 40x but the practical inequality is 2x. Current common metrics would report 40x, in this contrived example, is the point Gramm and Sowell both make. Their observation that transfers and taxes are neglected when measuring income inequality is self-evidently true and frequently overlooked. Be careful with income inequality conclusions. The first chapter of Gramm's book calls out that difference between the hours worked in the various income quantiles is large. Sowell makes the point that the age demographics vary considerably across the quantiles with very young and very old people working less and therefore frequently in the lower quantiles. Sowell further points out that different US demographic groups have different mean ages so that one can explain some seemingly-demographic-related inequality by age differences. Both books are recommended.
malone 1y ago
> The data in the article proves Gary's point. Not only is income tax brought in less now, but more taxes are VAT Does the article data show that? Looking at the tax % graph the ratio between Income+NI and VAT+Stamp duties has been pretty constant (apart from a brief time in the 70s) https://taxpolicy.org.uk/wp-content/uploads/2025/05/image-1.png.webp https://taxpolicy.org.uk/wp-content/uploads/2025/05/image-1.... > In other words, the poorer people in society are taking on a bigger share of taxes. Seems unlikely. The article shows that high earners are paying are far greater share of income tax. Poorer people would need to be buying a crazy amount more stuff to offset that with VAT. The UK is in a fairly unique position where its GDP per capita has been stagnant for decades. Which means it's slowly sinking under inflation. It's been going on for so long that the people at the bottom of the boat are now drowning (which I agree is deeply unfair). But no amount of redistributing people between the decks is going to actually fix the problem.
- gruez 1y ago
  >The UK is in a fairly unique position where its GDP per capita has been stagnant for decades. Which means it's slowly sinking under inflation. No it's not. The charts showing "stagnant" GDP have already adjusted for inflation, which means it's not "slowly sinking under inflation". https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=line&country=~GBR https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...

by mempko 1y ago

RhysU 1y ago

> Now inequality is high and keeps getting higher. Gramm et al's book, or at least the first couple of chapters, are worth reading on this topic. Oft-quoted official statistics neglect taxes and transfer payments. There is definitely a large uptick at the top 5% but the spread across the lower 80% isn't as strong as it often is stated, according to Gramm and his co-authors. https://en.wikipedia.org/wiki/The_Myth_of_American_Inequality https://en.wikipedia.org/wiki/The_Myth_of_American_Inequalit...

deleted 1y ago
[deleted]
jollyllama 1y ago
That doesn't necessarily negate the point that inequality is high and keeps getting higher. It all depends on what your definition of inequality is. Ironically, it is the transfer payments which Gramm decrees that wind up enriching that top 5% the most, they are basically farming the lower classes to line their pockets at the expense of the middle and upper middle, who pay a disproportionate share of the taxes.
- deleted 1y ago
  [deleted]
mempko 1y ago
Robert Ekelund, one of the authors, wrote pro-smoking articles for the tobacco industry. It's hard to trust someone like that and any data they present. It would take a lot of work to read those chapters and not only confirm the data they present, but also find data they aren't presenting, or deliberately omitting to make their case. Is there another book making the same argument that doesn't have this baggage?
- deleted 1y ago
  [deleted]
- RhysU 1y ago
  Yes, one such book is Thomas Sowell's "Basic Economics" 5th Edition. Page 209 says... > A simultaneous rise in rewards for work and a growing welfare state that allows more people to live without working virtually guarantees increasing inequality and earnings and incomes, when many of the welfare state benefits are received in kind rather than in money, such a subsidized housing or subsidized medical care, since those benefits are not counted in income statistics.
  - mempko 1y ago
    So he's arguing that inequality increases with the welfare state? Doesn't that contradict the claim made earlier? Or am I misunderstanding the quote?
    - RhysU 1y ago
      Sowell's arguing that neglecting to include welfare transfers makes inequality look worse than it is. Especially when there are stark differences in earnings as a consequence of working. If you earn $5 and the state gives you $45 in assistance, you practically have $50. If I earn $200 and the state taxes me $100, then I practically have $100. The income inequality is 40x but the practical inequality is 2x. Current common metrics would report 40x, in this contrived example, is the point Gramm and Sowell both make. Their observation that transfers and taxes are neglected when measuring income inequality is self-evidently true and frequently overlooked. Be careful with income inequality conclusions. The first chapter of Gramm's book calls out that difference between the hours worked in the various income quantiles is large. Sowell makes the point that the age demographics vary considerably across the quantiles with very young and very old people working less and therefore frequently in the lower quantiles. Sowell further points out that different US demographic groups have different mean ages so that one can explain some seemingly-demographic-related inequality by age differences. Both books are recommended.

malone 1y ago

> The data in the article proves Gary's point. Not only is income tax brought in less now, but more taxes are VAT Does the article data show that? Looking at the tax % graph the ratio between Income+NI and VAT+Stamp duties has been pretty constant (apart from a brief time in the 70s) https://taxpolicy.org.uk/wp-content/uploads/2025/05/image-1.png.webp https://taxpolicy.org.uk/wp-content/uploads/2025/05/image-1.... > In other words, the poorer people in society are taking on a bigger share of taxes. Seems unlikely. The article shows that high earners are paying are far greater share of income tax. Poorer people would need to be buying a crazy amount more stuff to offset that with VAT. The UK is in a fairly unique position where its GDP per capita has been stagnant for decades. Which means it's slowly sinking under inflation. It's been going on for so long that the people at the bottom of the boat are now drowning (which I agree is deeply unfair). But no amount of redistributing people between the decks is going to actually fix the problem.

gruez 1y ago
>The UK is in a fairly unique position where its GDP per capita has been stagnant for decades. Which means it's slowly sinking under inflation. No it's not. The charts showing "stagnant" GDP have already adjusted for inflation, which means it's not "slowly sinking under inflation". https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=line&country=~GBR https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...