Why have higher taxation?

It seems to be a common argument by many on the left nowadays to massively increase taxation on the rich. I know, admittedly, very little about economics but with the findings of the laffer curve, how can high taxation be argued for?

The Laffer Curve is useless.

The Laffer Curve is useless.

How so?

Basically the aim of taxation is to take money from those who don't need it and to redistribute it to people or important projects that do, while making sure that richer people are still richer people. Higher tax rates on the rich means taking more money from those with little need for it, and thus being able to allocate more money towards welfare. There's not much of an ethical problem with this, however if you go overboard you'll get rich people moving abroad, which is not too good for our economy.

Basically the aim of taxation is to take money from those who don't need it and to redistribute it to people or important projects that do, while making sure that richer people are still richer people. Higher tax rates on the rich means taking more money from those with little need for it, and thus being able to allocate more money towards welfare. There's not much of an ethical problem with this, however if you go overboard you'll get rich people moving abroad, which is not too good for our economy.

So you don't see punishing success as an ethical issue, or even in a world where people for some reason believe everybody is and should be treated equally, advocating discrimination on the grounds of income?

If you are richer than anyone before tax then you are richer than them after tax

Couldn't it be argued that with the current highest taxation rate being at 45%, essentially almost half, there is still the ethical problem of taking away a large amount of money from those who've often succeeded. It may not affect the incredibly wealthy but for those earning just over £150,000 it is a substantial amount.

Couldn't it be argued that with the current highest taxation rate being at 45%, essentially almost half, there is still the ethical problem of taking away a large amount of money from those who've often succeeded. It may not affect the incredibly wealthy but for those earning just over £150,000 it is a substantial amount.

Doesn't tax work in brackets though? e.g. If you make enough to be in that top bracket, only the amount over that threshold is taxed at that 45% rate, not your whole income? Or do I have it wrong?

No you're not. Not always.

If you earn £1 under the threshold and get taxed at one rate but someone else gets paid £1 over the threshold and gets taxed at another rate, you'll be substantially better off than them after tax has been removed.

That's not how tax works...

Your ****ing alpaca looks like Arceus. Why lmao.

Couldn't it be argued that with the current highest taxation rate being at 45%, essentially almost half, there is still the ethical problem of taking away a large amount of money from those who've often succeeded. It may not affect the incredibly wealthy but for those earning just over £150,000 it is a substantial amount.

How so?

It's great isn't it?

That's not how tax works...

In the UK, the tax brackets are as follows:

0% up to £11,000

20% from £11,000 to £43,000

40% from £43,001 to £150,000

45% from £150,001 upwards


Let's say you're earning £43,001.

You pay nothing for the first £11,000

Then you pay 20% on the next £32,000

And finally 40% on the last £1

You do not pay 40% on the whole thing. Looking at this it is easy to see how someone on £42,999 would still end up with less money than the person with £43,001.

Yes. However if you're earning over £122,000 you have a £0 personal allowance.

Yes. However if you're earning over £122,000 you have a £0 personal allowance.

Given a progressive tax system I don't think it is a great moral issue since anyone who earns more pre-tax also earns more post-tax, assuming their income is fairly standard (income from owned firms get double taxed via corporation tax and there are other niche examples like that, but for the most part it is true and hey business is not meant to be fair anyway; it is all about risk).

I think not being able to provide a solid welfare system, infrastructure and local government thus reducing the quality of life for the greater populace by far more, is a far greater moral concern, but hey, call me a consequentialist...

In and of itself I see very little reason to encourage "success". What's so important about it innately?



The laffer curve is entirely hypothetical and doesn't specify any specific tax rate that would be optimal. There is no reason to believe it would be near the centre either, really. What would be optimal would likely depend on many social factors. Therefore you are gonna need separate rates for everyone really - as different people have different spending habits (and of course not all pounds spent are equally as good for the economy) and elasticity of tax essentially. Annnnd that will change over time and with each part of the country nevermind which country. So it has to be simplified and a non-optimal, but fairly close to optimal amount chosen just to be realistic. Presumably the incumbent government thinks its rates are that. And sometimes the analysis needed to accurately check whether it is close or not costs more than it is worth changing it...




I love it haha.