We\’ve just had Ritchie telling us all that raising the marginal tax rate on top decile of households to 75% will bring in untold billions. That an average tax rate of 55% on such households won\’t either change behaviour (ie, trade income for leisure) nor prompt any to bugger off and leave Darling grasping at thin air rather than the expected wallets full of dosh.
One point he makes in his report is:
Of course the right will argue that higher taxes
will just lead to higher rates of avoidance or the
flight of talent. Research by theWork Foundation
busts the latter myth.60
And that research looks at how international the market for high earners is. Not, you might note, at how many Brits (like myself for example) work outside the UK and are thus not subject to the tax regime (except for certain taxes from income arising in the UK). Rather, at how many foreigners there are working in the FTSE 350 companies. Or at the top of them.
And they find that 86% are Brits. Thus, they conclude, there isn\’t an international market and thus lots of rich bastards will not run away with their money.
Now that\’s a pretty weak basis upon which to \”bust a myth\” especially as we get this information from Jeff Randall today:
More than 40 per cent of London\’s FTSE 100 companies are led by executives from beyond our borders. Just as Arsenal, Liverpool and Chelsea have foreign managers, so too do Lloyds Banking Group (an American), Rexam (a Frenchman) and Vodafone (an Italian). Burberry, which promotes itself as an icon of British fashion, is run by a woman from New Palestine, Indiana.
Now of course, just as the original study relies on looking at who is here rather than how many of us are elsewhere, so does this. But if evidence of few foreigners here is evidence of there not being an international market for talent then we do have to insist upon the reverse: lots of foreigners here is evidence of there being an international market for talent.
And thus is the myth busting busted.
We may well be able to find other evidence elsewhere that there is no great market for British talent overseas (and Randall himself hints at it). But we cannot rely upon that Work Foundation report, can we?