I very much agree with what John Veit-Wilson said in his post but would want
to emphasize the significance of high incomes. High incomes cannot be
considered as some stratospheric irrelevance in relation to adequacy, which
is one effect of working with median figures. I have just been writing a
polemic on tax and thinking rather hard about the 9% of UK income tax payers
who pay higher rate tax. Things are complicated by the disastrous
disaggregation of household incomes for tax purposes but I don't think we
will be far wrong if we think about the highest income households as having
at least one income at this level. The effect of low taxation of incomes
like this is that such households have significant resources for private
services in education and health as well as the traditional area of housing.
Given the enormous significance of differential educational performance for
inter-generational transmission of advantage, such households can easily
purchase achievement by their children - I certainly see this at the
University of Durham in terms of the privately educated intake. What this
all boils down to is that we must think about these issues not only in terms
of adjacent reference groups but rather in terms of a social norm. In the UK
now the top 10% of household incomes seem to be setting a normative standard
of aspired to adequacy which is very much removed from any statistical norm.
This was well illustrated by the recent debate about moving up the cut off
level for national insurance contributions, which actually provoked a
leftish comment by Blair in his TV confrontation with a property developer.
This is interpreted as a tax on middle incomes when it applies only to the
top quintile of incomes - a strange definition of middle but now middle
income has to be read in the same way as middle class. There are no uppers!
David Byrne
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