I was reading about the Occupy Wall Street protests this morning and thinking about differences between the US and the UK, and “Taxman” by the Beatles popped into my head. Here’s a clip from the ABC cartoon The Beatles, which ran from 1965 to 1969. (I would recommend skipping ahead to 2:40, where the song begins; the rest of the cartoon is terrible.)
I remember listening to this song when I was a teenager and thinking that George must have been exaggerating when he sang,”There’s one for you, nineteen for me…” and “Should five percent appear too small…” But he wasn’t. At the time, there was a “supertax” on the highest earners in the UK, where income over a certain threshold was taxed at a rate of 80%, and in the case of investment and dividend income, it was taxed at a whopping 95%, just as the song says. (As a sidenote, in the backing vocals, “Aha! Mr. Wilson” refers to Harold Wilson, the Labour Prime Minister from 1964-70; and “Aha! Mr. Heath” refers to Edward Heath, the Conservative Leader of the Opposition.) It’s maybe also worth noting that in 1974, when Wilson returned to office for a second time, the supertax on the nation’s highest earners rose even higher still, peaking at 83% for earned income and 98% for investment income.
Numbers like these, I think it’s safe to say, seem almost unthinkable to most Americans. But maybe the time has come to make them thinkable. The protests on Wall Street might nudge us to start asking some hard questions about capitalism and some open-minded questions about socialism. Is “big government” necessarily a bad thing, as politicians so often suggest? Who among us would benefit from more robust social programs, and who would suffer because of them? Is socialism really the bogeyman that American politicians make it out to be? Whose interests are politicians representing when they tell us that we should have less of a social safety net, not more? Is it unreasonable to ask that the very rich should contribute some of their extravagant wealth toward the social good, especially since they owe so much to the country that supported them and enabled them to become so extravagantly rich in the first place? You know, questions like this.
The tax structure in the UK is nothing like it once was, I should mention; Margaret Thatcher steered Britain away from socialism and toward American-style capitalism in the 1980s, and at present, the UK is torn between its socialist and its capitalist interests.
I also found myself thinking this morning of J.K. Rowling — who is now a billionaire, according to Forbes. Rowling wrote a great piece for the Times (of London) about a year ago where she explained why she had chosen to remain in the UK against the advice of her accountants, who had suggested that she might consider taking up residence someplace with a lighter tax burden, as many wealthy British people do. She explains:
I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain’s; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles.
A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism.
Another reason to love J.K. Rowling. And maybe the less said about George Harrison’s politics, the better…