Lies, damned lies and ...

In a letter to 'The Times' (reprinted in 'The Week' 5/11/11), professor of economics J R Shackleton (University of Buckingham) wrote: "the top 1% of all earners pay a quarter of all income tax. Cutting executive pay would mean the rest of us paying more tax."

I can only say it's a good job that Shackleton is not a professor of logic or arithmetic. Cutting the pay of the top 1% of earners would indeed mean that they would pay less income tax at current rates - a key caveat he (or at least the letter) omits, but there is nothing to stop the top 1% of earners continuing to pay this proportion of the total income tax rake even on reduced pay. Also, if the executive pay excised from those heap topping executives were distributed amongst the earners of less money, they would pay more income tax (at current rates) simply because they earned more.

To get a little more sophisticated: I don't know if Prof Shackleton has read 'The spirit level' and/or the associated materials from www.equalitytrust.org.uk/. If he has, he would know that the research finds that there are far fewer social problems in more income-equal societies . The fewer social problems there are, the less tax would need to be taken to pay for ways of containing those problems.

Shackleton trots out the standard argument that "the smartest of them [ie executives] will leave to earn unregulated income elsewhere". Part of me wants to say 'OK then, bye', but if the thesis of  'The spirit level' is correct and these executives transplan themselves to another unequal society (or make it more unequal by their transfer into it), they will live have to live among social problems there, too.

Shackleton also comes up with the astounding "once we politicise top company pay it will never be opportune to raise it." What?- Oh no, we can't have that, can we!