My Taxes Are Going Up a Bit And That's FINE
Scotland's new budget has been announced, and among other things it includes a (moderately) progressive change to the tax bands. Some of the people currently on 20% tax will now be on 19%, some will stay at 20%, some will pay 21%. The 40% and 45% bands have gone up to 41% and 45%.
My comfortable white-collar salary puts me in the 41% band, so I will be paying an extra 1p on every £1 over the threshold. It's not a large increase for the whole year, and I am more than happy to pay it, because these changes redistribute the tax burden somewhat from the poorer to wealthier taxpayers, and raise a modest extra amount of revenue to spend on public services I and people I care about benefit from.
It's not a particularly controversial change, and it was deftly handled so that critics (notionally) on the left can't really say the SNP government are passing on Tory-imposed austerity without using their tax powers to mitigate it, and critics from the far right can't say Scotland has become the highest-taxed part of the UK (because on average 70% of people in Scotland will be paying no more or slightly less tax).
But there is considerable whining in the newspapers on behalf of people who are going to be paying more tax (but like me can afford it easily), and leaving aside that the millionaire owners of those newspapers are not themselves in Scotland and evade as much tax as is physically possible anyway, I have to wonder: who are they trying to convince? Not the ones who are actually going to be paying less tax now, surely? And why would such transparently self-serving tirades for those poor suffering millionaires even possibly work?
I have a small theory.
The story is that higher taxes for the rich dis-incentivises them from creating wealth, the poor souls. They work hard, and the harder they work the more wealth they create, and the more money they can get for it, the harder they'll work. And how would you like it if you earned an extra say £100 and the government just took £46 of it off you?
The only reason this story is remotely convincing to the people struggling to make ends meet, is they really can't imagine that £46 not making a difference, or having a job where you are doing what you enjoy and being paid so comfortably for it that how "hard" you work doesn't make much difference either.
But if you are in such a job, you can put in the marginal extra effort (not necessarily wealth-creating effort) to pick up a bonus, you can take advantage of company share ownership schemes, you get to go away on business and treat your spare time on the trips as little extra holidays. Above a certain level, stuff just falls in your lap (and that level is way below "rich"; I'm only a mid-level engineer.) Having to pay a bit of extra tax doesn't even register. I personally haven't even checked how much tax I pay these days; I literally don't care, because I'm doing OK whatever it is. I cannot imagine earning enough to be in the 46% band and giving even the most lackadaisical of fucks about it.
It feels true that you always have to work harder to get more, and that any reduction in the reward for working harder would always be discouraging or even cause financial anxiety. But it's bullshit: once you are earning enough that you don't have to worry, and have even a little disposable income, additional money is not a huge incentive. And you realise that the anxiety and the myth of hard work as the way to get ahead was just a way to extract more value out of low-paid workers, not to advance their interests in any way.
The way to get ahead is luck and mutual support and wise decisions. Paying your fucking taxes is mutual support and wise decisions on a larger scale is all.