Capitol Ideas/Cross Currents

...In fact, as was also pointed out at the conference, the percentage share of revenue paid by upper-income earners has increased in England by about ten percent since the top tax rate was cut (from 83 to 60 percent in 1979...

...Poor old Lou Cannon of the Washington Post must be in a terrible tizzy, I thought...

...He commented as we rattled along through the London suburbs that you could tell from the buildings visible from the railway that England enjoyed a period of great prosperity in the late nineteenth and early twentieth centuries, extending perhaps through the 1930s...

...What would the modern-day membership make of supply-side ideas, I wondered...

...The one thing you can be sure that a highly taxed government will not produce is a prosperous private sector...

...Thatcher, who is as opposed to privilege as were her reformist counterparts in the 1830s...

...For this reason, capitalistic advance is difficult to reverse in a democracy...

...I This was a point I made, although less scientifically...

...He gave us no clue as to the identity of such Moscow critics...

...Meanwhile, of course...

...The British Civil Service is very much the same as the U.S...

...The confiscated percentage of an additional dollar earned ranges from 72 to 84 percent in Belgium...

...One reason is that a prosperous private sector is needed to sustain a vigorous policy debate outside government circles...

...The British Civil Service attracts top graduates of Oxford and Cambridge, who jealously guard the facts and figures indispensable to informed debate...

...Alan Reynolds of Polyconomics, who spoke at the conference, had some new figures showing just how high tax rates are in almost all European countries...

...66 to 76 percent in the Netherlands...

...My first impression was disappointment that I would miss the media postmortems in the following week...

...Thereafter, the architecture suggested, not much development had occurred in the country...

...not just on high incomes, but (taking into account social security and value-added taxes) on income levels as moderate as $28,000...

...Foreign Service in control of all departments of the U.S...

...I gather the Reform Club membership today is very much centrist—*'wet" Tory, Liberal/Social Democratic Alliance, moderate Labour...

...Its real but unstated purpose is to subject U.S...

...They are not at all sympathetic to the contemporary reforms of Mrs...

...Lord Bauer is an exception, and he's Hungarian by birth...

...Those in Washington presumably would include Howard Phillips, Richard Viguerie, the editorial staff of Human Events, and conceivably Patrick J. Buchanan of the White House...

...an establishment which would very much prefer to go on doing things in the same old way...

...supply-siders have tried to get the revenue figures for the different British tax brackets since the 1979 rate reduction, so far without success...

...The mystery to explain is why the Conservative party has been so reluctant to reduce tax rates below 60 percent...

...So many Britons have for so many years come to America preaching the gospel of soggy progressivism that it was indeed a pleasure for a dozen of us to give them some sound advice in return: the British must cut their tax rates if they are not to sink totally beneath the waves they once ruled...

...And until Margaret Thatcher was elected in 1979, all conservative governments since 1945 have accepted in principle the postwar socialist advances...

...The barriers (in the form of police-state regulations) needed to prevent this propensity of capital to seek out hospitable accommodations are extraordinarily expensive to erect...

...Tax rates correspond to the price of government...

...Before leaving England I met an old friend, Tony Thomas, now the business editor of the Economist...

...Certainly the British have no one in the same league as Gilder, Reynolds, Warren Brookes, Richard Rahn, or Bruce Bartlett, to name five who were at the conference...

...Put another way, if the British don't cut their top income tax rates, now reaching 60 percent on what we think of as middle incomes, then discretionary capital will be dispatched by computer to New York or Hong Kong...

...Now Jennings in his London Fog was telling us that Pupil Reagan had neglected to take the advice of Tutor Cannon, who would have to resume his Sisyphean editorial task all over again, no doubt with increased petulance and exasperation...

...and 87 to 92 percent in Sweden...

...The percentage changes mentioned above (supporting the Laffer Curve thesis) were only released after a request for the data was made, last May, by the Labour Member of Parliament for Birkenhead...

...Cannon has campaigned tirelessly in the paper's Tom Bethell is The American Spectator's Washington correspondent...

...Just as prices in competing businesses tend to approach the lowest price set by the most efficient producer, so in the international arena the "prices" charged by various governments will tend to fall to the level established by the most competitive country...

...How boring...

...Andrew Neil of the Sunday Times chaired a panel and subsequently wrote a good editorial on the British tax problem, but my sense was that not many people in England (certainly not many journalists) have any real grasp of these matters...

...One explanation of course is that Mrs...

...After lunch Tony Thomas showed me around, pointing out the gardener outside sweeping up leaves with a pipe in his mouth (no infernal combustion engine strapped to his back as in America, thank God), the large booklined meeting rooms, the exhibit space with amusing letters to the club secretary from Bertrand Russell and Hilaire Belloc...

...As George Gilder pointed out in his talk, capital now moves at the speed of light from one country to another...

...The architectural indicators are probably fairly reliable, reflecting political history...

...According to this October 1 Washington Post story (by Gary Lee in Moscow), by going to Iceland Gorbachev was "demonstrating his willingness to counter those critics in both Washington and Moscow who want to block a rapprochement between the two superpower leaders...

...The London Conference on Taxes and Growth, sponsored by the Manhattan Institute and the Adam Smith Institute, was a useful exercise in supply-side imperialism...

...Something to do with economics, eh...

...A television screen in the Eastern Airlines terminal showed a scowling Peter Jennings in a raincoat, crossly cross-examining a succession of witnesses, for all the world as though he were legal counsel to Mikhail Gorbachev...

...For years U.S...

...Foreign Service, and the model for it...

...Once internationalized, market forces turn out to be extremely powerful, and advance slowly but surely, as though driven by Historical Necessity...

...My guess is that at some instinctive level the Tories have figured out that high tax rates prevent social mobility and they don't object to this, reckoning it to be in the "class interest" of their constituents in the shires...

...He told me that even when a Member of Parliament does request information the Civil Service will frequently "misconstrue" it or interpret it as narrowly as possible...

...By 1988 this will be the United States, where the top tax rate will be 28 percent...

...Only now, with Britain no longer Great, and exposed to the competition of worldwide market forces, is change being forced upon a reluctant British establishment...

...The left was right about that, and there isn't a whole lot they can do about it...

...But I must hurry on to London, leaving until later an exposition of the point that the so-called "arms control process" is a total fraud, does not result in a reduction of arms but an increase thereof, and is not even intended to reduce such arms...

...Just as high tax rates prevent the emergence of business entrepreneurs, so the Civil Service monopoly has stifled the emergence of policy entrepreneurs comparable to those who have been so influential in U.S...

...That a Marxian tax code achieves the opposite of what Marx had in mind should be regarded as one more illustration of the Law of Unintended Consequences...

...One surmises that the Tories are dedicated to keeping the current tax code for some other reason...

...news columns to get Reagan to make correct, history-approved decisions here and now—an arms control agreement with the Soviets being high on the agenda...

...How can a member of the middle class, with (at least) 60 percent of his additional income intercepted at source, compete with someone whose country estate, London house, and antiques therein were purchased at a time of moderate taxation...

...Maybe he does, privately...

...military procurement to Soviet consent...

...I traveled from Gatwick to Victoria Station with Jim Gwartney, a professor at Florida State University, and the author (with Rick Stroup) of one of the few sensible economics textbooks...

...I looked forward (and still look forward) to an explanation of how Gorbachev, having gambled in Reykjavik and come away empty-handed, is in trouble back home—perhaps under fire from Pravda for refusing to accept Reagan's generous offers...

...In other words, the electronic transmission of capital has indeed brought to pass an imperialistic capitalism...

...What Europe's high marginal tax rates at all income levels accomplish is simply an effective barrier against upward mobility," Reynolds said...

...Notice that tax rates, both in England and the U.S., are the price of working, not the price of living, in either country: if you want to live without working, the government pays you...

...Those at the top get to stay at the top...

...My dear chap, they wouldn't know what you were talking about...

...In 1945 Clement Attlee's Labour government was elected, whereupon the creation of wealth was subordinated to its distribution...

...supply-side movement, which consists mostly of enthusiastic amateurs, journalists, and political economists attuned to the public-policy debate rather than to their academic peers...

...Even tax systems with the highest marginal tax rates are not significantly 'progressive, ' " he noted...

...There is no British counterpart to the U.S...

...The only problem is that President Reagan doesn't seem to realize this...

...Clearly it was a gamble for Reagan...

...They are simply confiscatory of any additional income, regardless of what a family earns to begin with...

...government and arrogantly unresponsive to requests for government data, then you can imagine the magnitude of the British problem...

...public life in recent years...

...In which case he's playing a risky game...

...The White House correspondent has signed on to do a big biography of Ronald Reagan after he leaves office, and this, one suspects, is, in the imagination of Lou Cannon, the "verdict of history" that now supposedly animates Reagan's every decision...

...Thatcher has been so ill-advised by Treasury officials that the Tory leadership really believes that a reduction of rates will reduce revenues, thereby opening up a frightening budget deficit...

...But perhaps more important, it is clear that the British Civil Service actively discourages the informed discussion of public policy outside its own ranks...

...So automatically do media people these days take the Soviet side that I am sure Jennings had no idea he came across this way...

...In a way they were the supplysiders of their day...

...He gave me lunch at the Reform Club, and it was interesting to visit this ornate creation of those early Victorian reformers, small d democrats who supported an extension of the franchise and broadly favored free markets...

...If you can imagine the U.S...

...The people also will leave...

...Talks Are A Gamble For Soviet Leader," the Washington Post had tendentiously informed us on the day the summit was announced: this from the paper that complains about disinformation campaigns...

...Barriers to class mobility by the same token "lock in" the present apportionment of weakh in the country...