Written by Sam Bowman | Wednesday, May 25th, 2011 | Estimated reading time: 2 minutes
There’s a small club of musicians and actors who’ve protested against absurdly high tax rates. The classic is George Harrison’s Beatles song, Taxman – "Should five percent appear too small / Be thankful I don’t take it all". (That wouldn’t sound out of place in most debates about tax today, sadly.) And, of course, there’s Michael Caine’s explanation of the Laffer Curve – "I left for eight years when tax was put up to 82 per cent. The newspapers said: "Michael Caine’s leaving: let him go, the stupid, overpaid, loudmouth idiot, who cares where he goes?" Well, you didn’t get 82 per cent tax from me for eight years."
The newest member of this elite club is Adele, whose (rather good) song "Rolling in the Deep" you’ve probably heard ad infinitum in Radio 2. She’s not pulling any punches:
"I’m mortified to have to pay 50%. Trains are always late, most state schools are s*** and I’ve gotta give you, like, four million quid? Are you having a laugh? When I got my tax bill in from [my album] 19 I was ready to go and buy a gun and randomly open fire."
A bit extreme, but I can’t blame her for being frustrated. The Guardian is a lot sniffier – how dare she resent paying half her earnings for inefficient state services!
Suppose that among the members of this [equal] society is Wilt Chamberlain, and that he has as a condition of his contract with his team that he will play only if each person coming to see the game puts twenty-five cents into a special box at the gate of the sports arena, the contents of which will go to him. Suppose further that over the course of the season, one million fans decide to pay the twenty-five cents to watch him play. The result will be a new distribution, D2, in which Chamberlain now has $250,000, much more than anyone else.
Is it just to take half of Chamberlain’s earnings in this example? Why should the state interfere in simple and just exchanges like this? Nobody could claim that Chamberlain doesn’t deserve the money – people want to give it to him because they want to see him play. But, as with George Harrison and Adele, he’ll end up much richer than any one person in the audience. There are lots of people out there who wonder why they have to cough up so much of the money they earn just to pay for late trains and bad schools. Welcome to the club, Adele.