Stupid ideas in tax policy

"Let's tax people more than they earn, that'll work."

On both sides of the Atlantic, there have been some truly terrible suggestions recenty as to how to "improve" the tax system.

In the US, [some Republicans are proposing what amounts to a great than 100 per cent marginal tax rate on incomes hovering just over $400,000], as the New York Times' Jonathan Weisman reports:

One possible change would tax the entire salary earned by those making more than a certain level — $400,000 or so — at the top rate of 35 percent rather than allowing them to pay lower rates before they reach the target, as is the standard formula. That plan would allow Republicans to say they did not back down in their opposition to raising marginal tax rates and Democrats to say they prevailed by increasing effective tax rates on the rich. At the same time, it would provide an initial effort to reduce the deficit, which the negotiators call a down payment, as Congressional tax-writing committees hash out a broad overhaul of the tax code.

That would mean, Slate's Matt Yglesias writes, that:

A person with an Adjusted Gross Income of $399,995 is going to have a higher after tax income than someone with an Adjusted Gross Income of $400,005. And it's not a small difference! You're talking about a tax penalty in the tens of thousands of dollar range for popping slightly above $400,000 rather than staying slightly below.

Meanwhile, in Britain, Chris Skidmore MP is arguing for massive marginal tax rates on the poor:

For individuals aged under 25 who have not yet paid National Insurance contributions for a certain period, perhaps five years, unemployment benefit should be in the form of a repayable loan. An unemployed teenager would still receive the same amount of cash as now, for example, but they would be expected to repay the value once in work. A New Beveridge calculates that this could recoup the government over £1.3 billion a year. Even if someone were unfortunate enough to be out of work for the entire seven years between 18 and 25, the total sum repayable would be £20,475 – considerably less than the tuition fees loan, repayable by many of his or her peers. This would also create an additional incentive to take on paid work.

With the numerous benefits which get phased out rapidly in the first few thousand pounds earned each year, making work pay is already tricky. That was the stated motivation behind the government's introduction of its own Universal Credit, which will replace six means-tested benefits and tax credits in an effort to ensure that the phase-out is controlled.

All of that would be for nothing if, the minute you started earning, you were expected to pay back a multi-thousand pound loan. Even taking Skidmore's "solution" at its most charitable, and assuming he literally means a tuition-fee style repayment option, people currently claiming unemployment benefits are, pretty much by definition, the last people you ever want to raise marginal tax rates on.

If your first priority is to punish the unemployed, then this is a proposal which makes sense. If it's to help them back into work, it's a ridiculous idea.

A political cartoon mocks William Gladstone. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Battle of the banners: how the disputes of football took to the skies

Across the top of the screen floated a banner, pulled by a little aeroplane: IN ARSENE WE TRUST.

Last weekend, during the West Brom-Arsenal game, I began to think my hearing was playing up again. I’ve been given hearing aids but don’t wear them. No, not vanity, it’s just a faff to put the things in and the quality of my life, which is excellent, is not being impaired. Anyway, as I live on my own, if the sound on the telly is too low, I put it up. No one knows or cares.

When I’m out entertaining lady friends at my local bistro, I always get a quiet table in the corner and sit facing them, all rapt attention, totally focused on them, so they think. It’s really just to help my hearing.

On the TV screen, I suddenly heard an aeroplane, which was weird, as there was no sign of it, but then hearing problems are weird. Children talking sounds deafening. Some consonants disappear. Could it be a helicopter on the Heath, taking some injured person to the Royal Free? At our Lakeland house, I often heard helicopters: the mountain rescue team, picking up someone who had collapsed on Grasmoor. So I do know what they sound like. But this sounded like Biggles.

Then across the top of the screen floated a banner, pulled by a little aeroplane: IN ARSENE WE TRUST. The score at the time was 1-1, Arsenal having just equalised. They eventually got beaten 3-1. Oh, the shame and irony.

Apparently, earlier in the game, according to newspaper reports the next day, there had been an anti-Wenger aeroplane banner: NO CONTRACT, WENGER OUT. I didn’t see it – or Sky TV didn’t show it.

Where do the fans or supporter groups get all the money? And how do they organise it? There is a theory that IN ARSENE WE TRUST was paid for by Arsène himself. Another, more amusing theory is that it was a group of Spurs supporters, desperate for Arsène to stay on at Arsenal and continue getting stuffed.

There have been a few similar aeroplane banners at football matches in recent years. There was one at Newcastle, when they were playing Sunderland, which read 5 IN A ROW 5UNDERLAND. Sunderland won, so it came true. Sent the Geordie fans potty.

Everton fans flew one in 2015 which read KENWRIGHT & CO TIME TO GO. He is still chairman, so it didn’t work.

Millwall fans did an awfully complicated one in 2011 at Wigan, during the Wigan-West Ham game, which resulted in West Ham going down. They hired a plane to fly overhead with the banner AVRAM GRANT – MILLWALL LEGEND. Now you have to know that Grant was the West Ham manager and Millwall are their rivals. And that they couldn’t fly it at West Ham itself, which could have caused most fury to West Ham fans. There’s a no-fly zone in London, which stops rival fans hiring planes to take the piss out of Chelsea, Arsenal and West Ham. The Millwall supporters who organised it later revealed that it had only cost them £650. Quite cheap, for a good laugh.

There’s presumably some light aeroplane firm that specialises in flying banners over football grounds.

I do remember a few years ago, at White Hart Lane and Highbury, walking to the grounds and looking out for blimps flying overhead – small, balloon-like airships mainly used for promotional purposes, such as Goodyear tyres or Sky’s aerial camera. The results were pretty useless, showing little. I haven’t seen any recently, so presumably blimps aren’t allowed over central London either.

I am surprised drones have not been used, illegally, of course, to display obscene messages during games. They could drag a few pithy words while on the way to drop drugs at Pentonville Prison.

The history of aeroplane advertising goes back a long way. Before the Second World War, Littlewoods and Vernons football pools were fighting it out for dominance, just as the online betting firms are doing today. In 1935, Littlewoods sent planes over London pulling banners that proclaimed LITTLEWOODS ABOVE ALL. Jolly witty, huh. 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution