“I’m mortified to have to pay 50%!” So said the phenomenally successful singer Adele in an interview with Q magazine. And why shouldn’t she be?... Not if you write for or read the Guardian. ... their rebuttal of Adele’s complaint about the 50% tax rate was bizarre; the Guardian simply said “The Beatles had to pay 95%”
This article on the Cobden site is about the Laffer Curve, and how the higher the taxes, the less incentive, the less output you get. The Laffer theory says govt gets zero income at zero tax rate, and zero income at 100% tax rate. The proper tax rate for optimum govt income is somewhere in between. Liberal think tanks have proven that is 34%, and conservatives have proven it is 22%. We now pay some 60% of our money to govt, unless you are paid by govt, then your taxes are zero, since the tax money you paid comes from tax money you were paid. Government workers should be tax exempt, it would save a lot of cost of paperwork.
I was there in the 1960s. The Beatles made so much money so fast, they had no idea what the implications were. Paul McCartney's accountant called him the day he became a millionaire and told him. McCartney was astonished. How? They had not been touring... "Airplay... royalties on radio play of their songs..." McCartney did not know that the Beatles got a nickel for every time a song played on the radio. He thought the songs were played on the radio for free to get people to buy albums and come to concerts where they bought tickets.
And when they realized they were paying 95% taxes, the Queen made them "most excellent members of the British Empire" in 1965. With money she mulcted from their work, she had medals made for them. Their solicitors made them corporations, John Lennon Ltd, etc... and the Beatles eventually formed Apple Records. Their lifestyle continued, in pretax dollars, as business expenses, and then they "earned" as little as possible, at 95% tax.
Mick Jagger managed to incur 110% taxes one year, so he split for France.
So two things not true: people will not create without intellectual property rights. The Beatles did not know how it worked, they assumed they had to perform or sell albums they made to make money. They did not know about, let alone believe in, IPR, yet they produced prodigiously.
Second, people quit producing at higher rates. Not so, people just adjust. It is not the taxes that matter but the regulation and the fines. Here people selling rabbits earn a $90k USDA fine on about $2000 profit. This stuff kills us, not the taxes. There is no way to beat the discouragement of being attacked by people of limitless resources.
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