The Daily Telegraph thinks the ‘squeezed middle’ begins at more than twice the ninetieth percentile of earners, writes Left Foot Forward’s Daniel Elton.
In yesterday’s Daily Telegraph, head of personal finance Ian Cowie echoed Ed Miliband’s concern for the squeezed middle:
“Most people imagine that only people paid over £150,000 a year suffer tax at more than 50pc but many members of the ‘squeezed middle’ earning much less than that pay marginal tax rates of 62.5pc.”
From the use of the political phrase du jour, you might think Cowie was referring to people in the middle of the income spectrum who are being squeezed.
He is not:
“The explanation is a combination of income tax at 40pc, National Insurance Contributions (NICs) at 12pc and the clawback of personal allowances at the rate of £1 for every £2 of income in excess of £100,000 a year.
“That clawback – initially announced by Labour Chancellor Alistair Darling but upheld by his Conservative successor George Osborne – means the personal allowance, which enables everyone else to earn £7,475 before they must pay tax, has been lost altogether before earnings reach £113,000 a year”
The ‘squeezed middle’, for Cowie, refers to people who are earning salaries more than twice as much as those comfortably above the ninetieth percentile of earners, that is among top ten per cent of earners in the country:
Cowie also falls back on the Laffer Curve to attack the idea of progressive taxation altogether:
“There is nothing theoretical about the Laffer Curve, which demonstrates how tax revenues fall when tax rates rise; it is based on a common sense appraisal of human nature.”
The Laffer Curve, in its purest form, argues that although raising tax rates from, let’s say 0 per cent to ten per cent, will increase revenues, if you keep on increasing it, at some point revenues fall as individuals refuse to work as an increasing proportion of salaries are allocated to tax.
However, by arguing there is such a curve, Cowie finds himself in agreement with such rabid free-market capitalists as Nikolai Bukharin, designer of the New Economic Policy under Lenin.
What Right and Left really disagree about is where the peak of the curve is. In reality, conservatives often believe in a ‘Laffer Slope’ and not a curve at all.
38 Responses to “In Daily Telegraph-ese, the “squeezed middle” means the very rich”
Leon Wolfson
@20 – Yes, true, now let’s put tax on all kinds of revenue to the same level, rather than allowing non-labour revenue to benefit from lower rates, and spend a few billion on collecting due tax. It’s a good start, but doesn’t go nearly far enough.
@17 – Yes, of course, it’s not like Unions are things people join themselves. Oh, wait! Let’s have an opt-out from the ConDem policies then, if you’re so keen on that kind of selection…
Ed's Talking Balls
I’m well aware people join unions. Goodness, where did I say they didn’t? Still, good destruction of that carefully constructed straw man.
Unfortunately, commuters can’t opt out of being screwed over by Crow’s frequent, unnecessary strikes any more than the general population can put itself outside the reach of the rule of law.
Despite claiming to respond to my point at 17, your post at 21 doesn’t even vaguely address the idea that Cameron and Crow, both very rich men, are not among the squeezed middle. Very simple point, no subtle nuances or what have you. Just a plain fact. I know you don’t feel comfortable unless obfuscating and/or describing your favourite make-believe Tory but, just for once, would you mind awfully answering a very simple question with a very simple answer?
Are David Cameron and Bob Crow members of Ed Miliband’s “squeezed middle”?
Leon Wolfson
Of course you have to blame Crow for the strikes, you can’t stomach the prospect that they’re voted on by the members, for reasons they find entirely valid. You’re simply objecting to unions on principle
Bob Crow has overseen his union *growing* in the transport sector – he’s an effective, skilled leader. He’s become moderately well off because of his wage, rather than by playing the money market and coming from a rich family by inheritance, unlike Cameron.
I don’t give a shit about, and don’t use, the term “squeezed middle”. I care about money generated as a result of the market rather than by labour, which is depriving workers of a proper wage for the job they do.
Actual benefits for workers, not your choice of buzzword.
(I detest Crow’s politics, in the main, but he’s an effective and popular union leader. Your hatred of him is telling – it highlights your basic anti-worker views.)
Ed's Talking Balls
Well there’s a first. In roundabout fashion, you have answered the question I posed. Quite clearly Bob Crow is a very rich man, irrespective of the source of his wealth. That really should be a painless admission; it’s a statement of the bleeding obvious.
Incidentally, your anti-worker sentiment shocks me. I thought you were left wing? Where’s the compassion for the millions of hardworking Londoners who frequently can’t get to work because of Crow? You aren’t quite living up to your carefully crafted caricature.
I don’t object to unions on principle. I do, however, object to unions which strike regularly and unnecessarily. Hence I can take Unison et al seriously and respect what they have to say. The RMT, on the other hand, is a disgrace and harms the unions’ wider cause by fomenting resentment.
Leon Wolfson
I always answer your questions, you just don’t like the answers. How someone is wealthy is absolutely important to me.
And striking is a legitimate tactic of workers, if other workers are inconvenienced then that’s too bad, but the anti-worker sentiment is your clear attack on strikes there.
The RMT is one of the few unions with balls, and other unions could learn a lot from it, it’s a union which has both grown and defended it’s workers rights. Of course you’d prefer Union’s mostly-words approach.