Sunday, April 17, 2011

Progression - the good, the bad and the uhm, I'm not sure...

On Friday I wrote post that praised the philosopher Jamie Whyte for his clear thinking and rigorous logic. I cited, as an example, his recent interview on Radio Four, during which he made the case that progressive taxation was a unfair. Since then I've had a number of emails asking me to explain more.

What follows isn't just about tax, it's about our tendency to accept commonplace values without asking the question: why do we think that? I'm sure that to many of you it will also be a good example of why philosophers can be irritating.  For the few who get to the end, it might just show how difficult it is to justify much of what we take for granted.

Now back to taxation - don't fall asleep yet please. 

Over recent months, politicians and the media have been full of claims that this or that policy is regressive or progressive. The general iimplication is that progressive is good, and regressive is bad. In the context of tax, Progressive Taxation is the idea that the more you earn, the higher percentage of your income you should pay. And it's the 'higher percentage' bit that is offensive to Whyte. 

Whyte isn't arguing that the better off shouldn't pay more tax. What he questions is the accepted wisdom that says they should be obliged to pay an even higher percentage of tax. To put this into context, in the UK the standard rate of income tax is 20%; it increases to 40% for incomes over £37,500; it rises again at £100,000 (because at this point people begin to lose their personal allowance) and again at £150,000, by which point the tax rate is 50%. 

Whyte says this approach is a punishment for success.  He argues that a fundamental aspect of fairness is that we treat people the same, but in this case we are arbitrarily saying 'because you are successful you not only have to pay more - you have to pay disproportionately more.' He says there is no moral justification for this approach - and in no way can it be described as fair.

On radio last week, his interviewer challenged this, saying the system treated all rich people the same, and therefore it did not treat people differently. Whyte replied with incisive logic that this was equivalent to levying a tax on bald people or black minorities and saying it was fair because we treated all bald or black people the same. No, it isn't enough to treat all 'better of' people the same, we have show why it is reasonable that they should pay disproportionately more than others. 

His interviewer challenged again: but aren't richer people lucky to be earning more than others?  Isn't the roll of life's dice such that they have their income by good fortune?  

Whyte argued that this was not so; the vast majority of higher incomes result from a mixture of skill and application.  Success was not a lottery and this is why we encourage education, and reward hard work. And most of us intuitively agree with this - for example, not many headmasters, doctors or company managers would concede that they are where they are, as a result of luck. No, the argument of 'good fortune' is not strong enough justification.

So why then, do not more people and politicians question progressive taxation? 

Whyte went on to argue that the system is actually bad for the economy, because it creates a disincentive to work harder. In making this point, however, he acknowledged it was a practical argument rather than anything to do with fairness. 

And perhaps that hints at an answer to the earlier question. Politically, progressive taxation makes sense - the alternative, of putting taxes up by a smaller amount for everyone, is hardly a vote winner. And frankly, where else are we going to get the money from?  Progressive ideas also make for good soundbites, such as David Cameron's aphorism that, 'those with the broadest shoulders should carry the biggest burden'.  

But none of these are arguments for fairness. Neither are statements you might just be thinking now, such as they can afford it or it would be a nice problem to have. We might feel like that when we hear of bankers' bonuses or footballers' wages, but they are not a coherent argument for fairness. They also ignore the reality that higher tax rates kick in at a fairly low level; for example, most heads of department in a secondary school will hit the 40% threshold. 

So if, like me, you still feel there is something not quite right with Whyte's argument, then what is it he is missing? Why exactly do I think it is right that the better off not only pay more tax, but pay disproportionately more?  In a moment I'll give you my answer. But before I do, I'd acknowledge that my arguments are not very strong; they rely to large extent on unprovable assertions and probably to an even greater extent on a desperation not to share the same views as reactionary Tories.  

Perversely, this is why I like Whyte so much; he makes me think; he makes me question my views and come up with real hard reasons in support of them. 

So why is Whyte wrong?

Actually, I don't think he is. I think his arguments are logically consistent and if you hold to them rigorously they are beyond my skill to dismantle. But I do think he gives too little weight to the idea of society and the economy as whole. 

While it is true that most people who are 'better off' achieve this through skill and application; they also need a flourishing wider society to make this possible. Skill and application will not get you very far if you are alone on a desert island! There is also a historic inheritance upon which all successful people build - today's engineers owe a debt to the past, as do our doctors, teachers, writers... everyone. In other words our success, however great or modest, is almost never entirely our own work. 

I'd argue that those who benefit the most from the existence of the wider society and the achievements of the past, should fairly contribute a greater amount to its upkeep. I'm sure that Whyte would argue, that they would already be paying more - and he'd be right - but then we get into the realm of value judgements. I think it is not unreasonable that better off people pay a higher percentage as well as higher total amount. 

How much more, and whether the thresholds of forty and fifty percent are reasonable, is another issue - in fact, I'd agree with Whyte that our tax system is very poorly designed and that the use of sharp thresholds creates real disincentives. We also, quite bluntly, tax too much - but that really is a different matter.

Enough from me. What do you think?  Is Whyte an insightful maverick or plain wrong?  Should we all pay the same rate or should the rich pay even more? Either way, let me know your reasons.

Friday, April 15, 2011

Chalk and cheese

Image from Google Images
David Willetts, minister for universities and science, is fast becoming the most irritating politician in Britain - certainly, he appears to be one of the most desperate. I've written before about his claims that the increase in university fees are somehow a matter of fairness rather than a financially driven imperative. More recently he's been clutching at even frailer straws.

One of Willetts' recent pronouncements was that what mattered was not the total level of debt students would accrue - but rather how much their repayments would be. When I heard this I nearly punched the TV screen!  Willetts' approach is the political equivalent of those loan consolidation adverts that prey on the vulnerable: replace all your loans with one easy payment; no mention that your debt will take twenty years to pay off and is secured against your house. 

As if that wasn't enough he's now imitating Canute in denying the tide of universities that have declared fees at the maximum amount. Of the 37 universities to announce, 27 have set them at the maximum. But having earlier said that fees of £9000 would be the 'exception' it would be too much to expect Willetts' to admit he'd been wrong. Instead he says it is early days, that there will be new providers, that the average will be lower...

This last point is a classic example of political sophistry. Willetts' claims the headline figures ignore the subsides available to poorer students, and that we should look at the average fee. Yet he knows full well that students don't pay 'the average' - they either get an assisted place or not. The vast majority will pay between £8500 and £9,000.

The most irritating thing about Willetts is that his slippery logic is so unnecessary. Everyone understands we have some difficult funding choices to make. I would prefer us to hold university fees and make sacrifices elsewhere - but I recognise it's possible and entirely logical to take a different view based on different preferences. What I can't stand is the desperate attempts to present a tough choice as something other than what it is.

Why can't Willetts' just tell the plain truth - that the Government believes increased fees are a  financial necessity (not a fairer system); that unfortunately, student debts will be a significantly greater burden on graduates (not lesser because repayments start a little later in life); and that the rapid adoption of maximum fees by most universities is disappointing (not mitigated by putative averages).

The answer of course is politics - and the ridiculous nature of our soundbite democracy that doesn't allow for debate based on agreed facts, declared preferences and logical analysis. Instead, after 350 years of parliament we've become so used to the obfuscating nonsense of people like Willetts that we regard it as the norm.

How refreshing then to hear Jamie Whyte on Radio Four's More or Less today.

Whyte is the antithesis of Willetts: a liberal philosopher, rigorously logical, open to different views, and prepared to tackle those that are so ingrained we take them for granted. His book, Bad Thoughts - a guide to clear thinking, is to my mind, a great example of how philosophic thinking can be applied to modern issues. In it, he tackles themes as varied as the Holy Trinity, anorexia and banking profits - but its underlying theme is the need to question, to face facts and respond to them in a consistent way.

Typical of Whyte, he was today arguing against a canon of modern politics - that progressive taxation (the richer you are, the higher percentage you should pay) is a good and fair thing. I don't wholly agree with his position on tax, though much of what he said is highly persuasive and showed deep flaws in our accepted approach. But I do admire his willingness to question the herd, to declare his sources, to explain his reasoning and ensure the facts that support it are sound.

It was probably a forlorn hope - but I did wish that Willetts was listening too.

Saturday, April 9, 2011

Books I'm reading - Ten Pound Pom

Niall Griffiths is a writer of apparent contradictions. A Liverpudlian living in Wales; a sensitive man who delights in the profane; alive to nature yet a long time stoned or blotto. Actually, none of these are necessary contradictions - but to use his own writing style, it does make him an awkward fucker.

And so it's no surprise that his latest book, Ten Pound Pom, chronicles a country which he variously describes as racist, over-legislated, Blackpool in the sun... and shite. By the second chapter it's clear there's lots about Australia that Griffiths doesn't like, and he gives the impression he knew this before he travelled. But then writing a guide book was never the point of Ten Pound Pom.

Griffiths' parents were Seventies migrants, seeking a better life under the Australian Government's assisted passage scheme. After the War, more than a million British people came to Australia hoping to find a new England; the scheme was part of a wider policy that actively discriminated against non-white immigration. Griffiths himself was nine when he arrived. He stayed for three years before his parents returned to Liverpool.

Thirty years on, he travels overland from Brisbane, retracing the journey he'd made with his parents and siblings in a station wagon. The route takes him through New South Wales, to Sydney, Canberra and Melbourne -  hugging the coast of South Australia, before crossing the vast, mind numbing, scorched, remote, stultifyingly dull and seemingly never ending plain of Western Australia. The trip ends in Perth, from where he flies home, 'sick to the gizzard of Oz'.

But in fact, Griffiths recounts three journeys, each in dialogue with the other. The original trip, told thorough the mind and words of a somewhat introverted boy; his return, through the more self confident and darker eyes of a man. And in between, both in time and the pages, is the journey of Griffiths himself, his attitudes, addictions, inspirations and rites of passage.

Ten Pound Pom is a book about returning. 'Of course we ageWe get old and we die. But how many of us regress like this, to the other side of the planet, to revisit ourselves at a distance of three decades and 12,00 miles?'  And a few pages later.  'This isn't just me touring Australia, this is touring a large and formative part of my life. I'm a tourist through my own childhood. Stange jaunt this; I become more alien to myself with each passing day.'

It is also a book about history and culture and depth - or the lack of it. Griffiths does not universally dislike Australia, but it's significant I think that his best moments are in the landscape, close to nature and the sense of wonder it brings. He is sympathetic to the Aboriginals and alert to those aspects of Australia's history that were shaped by injustice and dissent; the legend of the Kelly Gang is of particular interest. And he is openly hostile to what he sees as the all too prevalent  narrow minded, supercilious and smug attitudes of modern Australia.

The book is also a lesson in self-reflection. For if Niall Griffiths is anything as a writer he is searingly honest, and in so being, he make us look at ourselves as much him. Whether you agree or not with his views on the nature of Australia (and I can't comment, having never been there), and regardless of whether you approve of his attitudes to authority, alcohol, culture... so many things,  you can't fail to read Ten Pound Pom without questioning your own attitudes to the same.

I've long held that Niall Griffiths is one the best fiction writers in the UK. His books are not for the faint hearted, but they look deeply at what it is to be human, to live on the edge of civility. His characters are a world away from my comfortable life, and yet in parts, they are uncomfortably close. We're lucky to have him in Wales, and I couldn't agree more with his first words to his parents on returning home, 'Thank Christ you brought us back from Oz.'

Ten Pound Pom is available from good books shops, from Amazon or the marvellous Parthian Books