9 thoughts on “Taxes”

  1. It could be worse. It could be very, very simple.

    N.B. This is not a complaint that “taxes are too high,” only that “the tax system is overly complex, loophole-laden, and misused for non-tax-related purposes (thus most of the loopholes).”

    • Yup.Taxes are complex. On purpose.
      It’s the preferred tool of social engineers, especially the idiotpoliticians that decry social engineering. Also the accountants who enjoy first quarter windfalls.
      The bane of the rest of us.

    • I think that the Beatles – along with the Rolling Stones and a bunch of other artists and writers – were actually complaing that “taxes are too high”. Georgette Heyer in 1968 or so was writing about “… handing over to Bloody Wilson … 17s 9p” in the pound (about 89% marginal rate) to get her royalties out of a company which her (incompetent) accountants had encouraged her to set up to receive her royalty payments.

      I do get the impression from all the complaints that the US federal – and state? – tax system is in need of a drastic reform. Maybe though it’s only people like PG – and you and Felix – who find it takes so much work, and the rest can do everything in a couple of hours?

      • Mike, this is an instance in which the “real” answer is buried under misleading definitions and loopholes. On its surface, the “89% marginal rate” issue is indeed the kicker… but it only applied on “incomes” of over a million quid (not “inflation” but “socially equivalent” to about $125mUS today); it was quite a steep decline below that…

        …hidden by definitions of “income” completely foreign to US taxpayers (pun intended).

        In the US, “income” (26 U.S.C. § 63, in concept unchanged for over a century) includes virtually everything that one “receives,” including “exchange value from barter.” In the UK in the 1960s, an awful lot of receipts that US taxpayers would think of as “income” were not “income” for purposes of “income tax” assessments — in particular, the rents (and the UK has a broader conception of that, too) from the freehold on real property were not “income” to individuals or trusts. What this meant was that the great landed fortunes were essentially not paying income tax on exploitation of the land without mineral extraction (timber and some crops were also excluded!)… and mathematically that required increasing the top marginal rate from about 55% to the 90% range to balance the budget. Which, needless to say, was a very class-selective mechanism.† And that is something that shouldn’t surprise anyone.

        So Inigo was right: “You keep using that word. I do not think it means what you think it does.” It’s sort of like politically redefining “victory,” embedding the new definition in the annexes to the rules of engagement, and then demanding that battalion commanders/squadron commanders/vessel masters comply in every respect. Which is not a good way to fight a war…

        † It happens over here, too: Just consider the historical advantageous tax treatment of both mortgages and mineral-extraction royalties. We’re largely just not as overt about it, although the definition of “income” can be subjected to lots of shenanigans regarding timing, realization, treatment of security interests and pledging, etc.

        • Don’t forget tax credits, the idiotpoliticians preferred, (and mutable) mechanism of social engineering. Or the “windfall” taxes that float every time a sector of the eonomy is too successful for the “rich men north of Richmond” to use the phtase dujour. (Never mind the rich women north of Richmond.) 😉

  2. So I’ll raise something that came up recently. Taylor Swift has filmed her super-popular concert and is sending the movie directly to theaters.



    Upon reading this, Authors can substitute “publishers” for “studios” (and perhaps Brandon Sanderson for Taylor Swift, although that might be pushing it.) Much of it will be familiar.

    initial discussions between the Swifts and traditional studios were “disappointing,” leading them to take matters into their own hands.

    Apparently the studios wanted to schedule the movie for sometime in 2025 because — well, they’ve got schedules and stuff, and they know best and all. Taylor did not roll over and play dead. The movie comes out just as the tour ends and is effectively a coda. Very smart and in a way very compassionate, as it is a gift of sorts to all the fans who couldn’t manage to get into a venue.

    Some exhibitors have privately discussed the possibility of an opening weekend that exceeds $100 million, as other films abandon the October 13th date in terror. This success sends a clear message from exhibitors to traditional studios that multiplexes can find programming without their help, potentially changing the dynamics of cinema distribution.

    AMC will get more money (lots more) – Taylor will get more money (way lots more) Universal pictures gets no money and a big lesson in relevance. Studios in general are in disarray…


  3. A reply to CEP which has instead appeared as a stand alone comment.

    All true enough, though I’m not sure where your “incomes over a million quid” comes from. UK income tax was something of a mess in the 50s, 60s and 70s with reliefs based on age, marital status number of children, etc and both the standard and multiple super tax (surtax) rates but round about 1970 you were hit by the full marginal tax rate if you were earning £15,000 after deducting the reliefs (though I recall these being withdrawn as your income rose). It was at this point that the 50% super tax rate kicked in (being added to the 41.25% standard rate, but only on the income above £15,000. (Below this level there were eight or nine income bands on which varying rates of surtax applied). Of course, this was a lot of money back in 1970 (I think I was then earning about £1,300 per annum so not trouble by surtax).

    However, the Beatles (your video example) and the Rolling Stones were not old money and were paying tax on their (mostly music) earnings at very high marginal rates and were not getting all the advantages that accrued to various forms of investments. They could of course invest in things like planting conifers on Scottish moorland to some advantage or move abroad to a nice tax haven. At least they then didn’t have to worry about the Revenue coming after them in the way their American counterparts – or anyone who had the misfortune to inherit a joint citizenship with the USA – did and does.

    • IIRC, There were some notable celebrities that left the UK over taxes.
      In that same general era in Sweden, Astrid Lindgren, author of the Pippi Longstocking books, among other successful creators, were actually taxed at over 100% and then rebated, at government discretion, “enough” money to subsist on.


      “In 1976, a scandal arose in Sweden when it was publicised that Lindgren’s marginal tax rate had risen to 102 percent. This was to be known as the “Pomperipossa effect”, from a story she published in Expressen on 3 March 1976,[25] titled Pomperipossa in Monismania, attacking the government and its taxation policies.[26] It was a satirical allegory in response to the marginal tax rate Lindgren had incurred in 1976,[27] which required self-employed individuals to pay both regular income tax and employers’ deductions.[27] In a stormy tax debate, she attracted criticism from Social Democrats and others. She responded by raising the issue of the lack of women involved in the Social Democrats’ campaign.[28] In that year’s general election, the Social Democratic government was voted out for the first time in 44 years, and the Lindgren tax debate was one of several controversies that may have contributed to the result.”

      Taxes are an expression of the concept that citizens (and their income) are the property of the state and whatever they are allowed to keep is government largesse. There was a report on the negotiations on the 2009 era tax bill where the minority party demanded tax cuts for their consituents to sign off on the bill and the (temporary) supermajority party shrugged the threat off. “We won the election. We don’t need your votes. Besides, we already gave them a tax cut by not raising them as high as we could have.”

      The report may or not be true but it aligns with the policies and attitudes of both parties. Tbey control who keeps their earnings and who gets the largesse paid with what they take and borrow.
      Taxpayers are just pawns in their ideological wars.

      The war between citizens and the state is as true and unbalanced today as in Xerxes’s time. But the odds of a modern Salamis are very low.
      Fredrich Hayek was right.

    • Mike, I should have noted that the “over a million quid” was when all of the allowances (etc.) were reset to zero, and the marginal rate ended up at (recollection from adding stuff up while I was Over There, including National Insurance — something often neglected when discussing UK tax burdens) 94.63% on the amounts over a million — thus, “one for you, nineteen for me”.

      The actual top-rate-without-surcharges did indeed kick in at £17k (in 1964), but the surcharges kept kicking in, and kicking in, and then the reliefs and allowances were “recovered,” so the true effective top marginal rate didn’t kick in until much higher income. I recall in a mid-80s piece in the TLS that Lennon was outraged when he got his 1964 assessment, inspiring the song. It’s also worth keeping in mind, though that on a 94.63% tax rate on £1m taxable income, that would have left the “poor taxpayer” well over £50k to squander on room service at the Dakota if that marginal rate applied from the first shilling (it didn’t).

      None of which is to excuse rates that are that high — only to reinforce that things were, in technical terms, really screwy (whether on a “complexity” or “social stagnation” or “justice” basis).

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