Earlier this year, the Resolution Foundation reported an increasing divide between the rich and poor in Britain. To reflect upon emotional wellbeing in the round we should note the work of Professor Angus Deaton, awarded the Nobel prize for economics in 2015. In a co-authored paper in 2010, he noted that emotional wellbeing increases along with rising income, but only up to an annual income of $75,000 (£58,000). While austerity and poverty increase levels of distress for many, the escalating wealth in some areas of society would appear to make the recipients no happier. Surely this in itself makes a sufficient case to redress the balance to a certain degree?
That £58 k putting you in the top 5% (by individual earnings, or thereabouts). And of course we do already do a lot to redress the balance. Going by household incomes, top 20% average (note, mean average) is £80 k or so and 12 times the bottom 20%.
After taxes, benefits, the consumption value of government services like the NHS and education, the consumption gap is 4 to 1.
That’s redressing the balance to a certain degree isn’t it?
There’s also another way to read Deaton’s result. If emotional wellbeing is to be out goal then we should not tax anyone on less than £58 k, should we? As they’re still short of that maximum. Meaning that we’ll be able to afford only as much government as we can squeeze out of the top 5%. Fine by me of course.