You Can’t Stand Still for Higher Taxes
There’s a lesson for the UK (and Scotland) from people who’ve left New York for Florida. Incentives matter.
Welcome to Scotland: It’ll cost you.
Photographer: Epics/Hulton ArchiveHow much tax do the rich pay? More than you think. The share of income tax paid by the top 10%, 5% and 1% of the working population have all gone up in the last 10 years (under a conservative government constantly being accused of letting the rich off scot free). In 2010 they paid 54.9%, 44.8%% and 26.5%%, respectively. Now they pay 62.3%%, 50.3% and 28.3%. This isn’t because they are earning a larger share of income overall (income inequality in the UK has not been rising). They aren’t.
As independent economist Julian Jessop points out, the percentage shares of total income for each percentile group have not really changed over the last decade. The top 1% made 13.9% of income in 2010. Last year it was 13.1%. The top 5% were on 26.4%. Now it is 26%. This is not about an income grab by the rich. It is about them paying a higher percentage of their total income in tax. You might think that is totally fine. They have the money: those with broad shoulders and so on. But it is worth remembering that almost everyone is driven to some extent by financial incentives. Ask too much — in absolute or relative times — and you might end up with less.