The difficult case of the Greggs bonus

Another row has developed about the flaws in the Universal Credit system. This time after purveyors of pasties and sausage rolls (vegan or otherwise), Greggs, kindly decided to pay all of its workers a £300 bonus.

Some workers in receipt of Universal Credit would receive as little as £75 of the £300 bonus, an effective tax rate of 75%. Others get a higher proportion of the bonus, but still face a bill higher than the average tax-payer despite being badly enough off to qualify for benefit payments.

Obviously low-paid workers shouldn't be paying taxes at this rate, and the case has generated a lot of media coverage, petitions, and various proposals, including one from David Linden MP not to treat bonus payments as income.

The Universal credit scheme has been beset with problems. It is a good idea in theory to have a joined-up benefit system which gives people an incentive to work, but it is fiendishly difficult to put this ideal into practice.

The problem in the bonus case is that it is a one-off payment. But the Universal Credit system is looking at short term income levels.

My Hourly Averaging proposal aims to do the same thing as the Universal Credit; to make work pay and assist the poorest in society.

Hourly averaging, however, would have no difficulties with the bonus issue. Each person has a tax-rate determined by their lifetime hourly income. A bonus of £300 isn't going to affect that lifetime calculation very much, and so the recipient will receive whatever percentage of the bonus they get for the other work they were doing. Someone whose tax-rate is 0% will receive the whole lot. Someone with a 25% will receive £225 and so on.

Low earners would never face a high tax bill on a small bonus because their lifetime hourly average will be low. There could be exceptions; someone who works in a low-paid job but who received a huge inheritance could conceivably have a high tax-rate, say 70% on their bonus. But that is because they are genuinely fortunate--they have gained much more than their fellow workers, in this case because of their inheritance.

As so often, when there is hand-wringing about the tax-system or benefit system it occurs to me that hourly averaging would do it much better.

One simple rule for essay writing

There is plenty of good essay writing advice out there.

However, I was thinking today how frustrating it was that some very capable students do badly in essays. In some cases intelligent and diligent students fail for wholly avoidable reasons.

My 'one simple rule' advice is to focus on the question.

Throughout the process, students should keep the essay question in the back (and often the front) of their mind. There are two aspects to this:

1. Interpret the question carefully.

There may be several ways to interpret a question, and there will always be several ways to answer it (often "yes", "no" and "it depends").

Look at the syllabus and course materials; the essay is an opportunity to show your understanding of the material covered on your course. Think about which of those readings or topics are relevant to the question and why.

The most impressive essays show understanding that there are different ways to answer the question, and explain why the answer they have chosen is better than the alternatives.

2. Avoid diversions from answering the question.

When planning and writing the essay, make sure you are always working towards answering the question.

As an undergraduate myself I was prone to go off on diversions where something interested me, or to share my thoughts on some related topic. These diversions are best put to one side, perhaps for a future essay or your own interest. You could even write them up into a blog!

I don't mean to say you should be very simplistic in answering the question. You will need to consider rival views and explain why those positions that deny your view are wrong.

Summary

There are important conventions to follow when structuring and writing essays, which are of course very important. However, if you haven't responded to the essay question then it can be very hard for the marker to give you any credit, however good your essay is in other ways.

Drinking in nature: A worldwide experience?

In so many ways I am very lucky, and it is always good to acknowledge this.

Over the festive season we’ve been exploring the surrounding area a bit more on our dog walks, heading more for the downs (hills) than the Thames valley floor. The latter has been a bit muddy (if not flooded).

A few days ago we walked around the villages of Ipsden and Hailey and along a bit of the Chiltern way and Icknield Way walks. The pictures I took really don’t do justice to the scenery.

I stopped to take some photos because a thought occurred to me during a quiet and still moment as I gazed over the hills and valleys.

The thought was that there could be millions of people over the world doing something very similar to me at that moment—appreciating the stillness or majesty of the natural world.

Others might have been on a ship the sea, on a boat on a lake or river bend, in the mountains, surrounded by trees or on a plain. But were others also experiencing that absent-minded moment taking in a scene? I expect some were.

We were no doubt in a significant minority among the global population. Maybe a few thousand, maybe a million. Certainly not more—most people would be sleeping, eating, moving, entertained, worrying, hustling; all things we must do as humans. Many people would get very little opportunity to experience that kind of quiet scene.

I imagined flipping between those different people’s views, all different but unified and connected in some unreal manner. All swapping places for a split second with one another. Flicking between our views like a rapid slideshow.

No doubt a poet could express my thought much better.

My fellows and I might have completely opposed, maybe even alien, worldviews. Our cultural and religious attitudes could be radically conflicting. We are primarily social creatures, understanding the world through our language and cultural upbringing. We are different from any other species in that respect, we rely much more on knowledge rather than instinct and knowledge is transferred by language.

However, is this experiencing of nature potentially one of those universal human experiences that completely cuts across cultural differences? Mostly universal human experiences are going to be biological functions such as eating. Perhaps laughing and loving might also cut across cultural and linguistic divides as does experiencing nature?

During the cold war the great philosopher Sting said “I hope the Russians love their children too” perhaps making the same point at a time when mass destruction was quite a live option. Nuclear war hasn’t been such a prominent concern for a while, though chances might rise if the current US President thinks it might help him avoid impeachment or losing an election.

I’m very fortunate that I live somewhere I can access quiet nature; I have the time to go for walks and we have a car to get there quickly and easily. Many others won’t be so fortunate; those in a busy city, a slum or a refugee camp might have little opportunity to get away.

But at times like these, when there are those seeking to divide us in so many ways, it is good to appreciate the little ways we are perhaps united. That we all matter and that the quiet of certain kinds of natural environments matters too.

2019-20 Courses for the general public

Just an update about availability of my Oxford Continuing Education courses for the upcoming year as one is already fully booked.

For the latest info on my courses see here.

Online courses in Political Philosophy

I will be teaching on all three runs of the Political Philosophy: An Introduction course this academic year.

The first one is fully booked, but there may be a waiting list.

Only the next one will be available to book at any one time. Once it commences booking is opened for the following one, so note down the date when booking comes available on your chosen run as it usually fills up!

Tuesday Evening Classes in central Oxford

Spaces are currently available on both my upcoming evening classes.

What Would an Economically Equal Society Look Like?
October to December 2019

Many people assume that a just society should aim at equality between all citizens. But what does this actually mean? How does equality trade off with other values? Do people's choices matter? In this course we consider rival visions of an equal society.

International Ethics and Global Justice: What Do We Owe Those beyond the Border?
January to March 2020

Explore the ethical and economic issues arising from an unequal world with borders. This course considers whether and why we have more responsibility for our fellow citizens and the implications for trade, aid, tax and immigration.

Saturday Day School on Post-truth in North Oxford 

On the 30th of May 2020 Dr Julia Weckend and I are offering a day school where we consider whether we are now living in a post-truth world and how this relates to philosophical ideas about truth.

Truth in a Post-Truth World

It is said we have entered a post-truth age. Has philosophical skepticism, cultural change or new technology led us on this path? What is truth anyway? This day unpacks the notion of truth, why it might be changing and whether it is still relevant today.

Summer course in Oxford

I will again be offering an accredited summer school course in 2020 at the Oxford University Summer School for Adults. The course webpage is not yet live but hopefully it will be soon and you can find it via the link above.

Can economic inequality be justified? Should some get more than others?

I gave a lecture on this topic at the 2019 summer school which can be found here.

The week-long course will be in early August.

Full listing

The full listing of my upcoming courses can be found here.

Preface for a book I might never write

Preface for a book I might never write: Arguing for the CLIPH-rate tax

Lately I’ve been teaching or planning courses about distributive justice and I’ve mapped out a book I’d love to write if I had the time. It's probably about third on my list of projects though I sometimes mentally change the order of priority.

In fact, I wouldn't be starting from scratch. As well as having taught some of the theories, I could use a couple of pieces I’ve published, and I have written some blogs on the topic too. However, I thought it might be nice to note down the idea here, just as no doubt countless authors have written a preface but never completed the actual book.

The basic idea is to write a three-part (or even volume!) work presenting the argument(s) for my CLIPH-rate tax system from three different theories of justice; Egalitarianism, Consequentialism and desert theory.

Egalitarianism

The egalitarian argument is the easiest one to reproduce as I’ve already written a couple of pieces about this, in an edited collection and in my article “Arguing for hourly averaging.” Resource egalitarianism is the theory of distributive justice I find most compelling, and so this has been my primary concern up until now.

However, not everyone is convinced by egalitarianism and I think that it is possible to make strong arguments for the CLIPH-rate tax from two other theories.

Consequentialism and prioritarianism

Consequentialists about distributive justice believe that the economy should be designed to bring about the best total consequences. The good consequences could be subjective welfare, preference satisfaction, freedoms or some mixture of goods. Consequentialism is a totalising theory; bring about the most good. It therefore doesn’t matter how the goods and bads of society are distributed. Someone might be very badly off both absolutely and relatively under a consequentialist system and they would have no grounds for complaint (except by rejecting consequentialism). For many people, this is enough to reject consequentialism; everyone is just a means to bring about the best total consequences.

In fact, consequentialism does not have to ignore distributive matters entirely. Prioritarianism is a consequentialist theory which gives priority to those who are worse-off when undertaking the consequentialist calculation. The weighting towards the worse-off could vary; with greater emphasis on maximising the total amount of good or with greater priority given to those who have less. Prioritarianism seems to make consequentialism a lot more acceptable, though it doesn’t fully resolve all concerns about it.

How can you argue for the CLIPH-rate tax along consequentialist or prioritarian lines? I’ve made some points in previous blogs and in my book about the ways that an economy with the CLIPH-rate tax at its heart would combine incentives to work, save and invest with a great deal of redistribution to assist those on low incomes. Consequentialists, and particularly prioritarians, would want to ensure that there isn’t an impoverished class of workers at “the bottom” of society. Raising the standard of those who are badly off should bring about better total (let alone prioritised) consequences if we accept that nearly everyone gets declining marginal utility from resources. A poor person will get more utility (or whatever other good you specify) from a £10 gift than a rich person would. A successful economy should therefore focuses on making the worse off as well as possible, where this can be done without damaging overall economic productivity too much.

I would like to do more to show that the CLIPH-rate tax can both help to enlarge the pie while ensuring that everyone gets a decent slice. Hour credits are a key part of the tax calculation, and the only thing that someone can do (by choice) to get more hour credits is to undertake more work. The incentive to work is therefore built into the system. Meanwhile the tax calculation should generate as much taxation from unearned income as possible, representing the ideal form of taxation.

This is because the CLIPH-rate tax should do a good job of taxing not just unearned income but, relatedly, all forms of economic rent. Economic rents accrue to someone when they get more than they need in order to make the economic transaction in question. So if a landlord is considering renting a room and would accept £100 for it, but can get £200 due to high demand, then fully half of the rental income they get is economic rent. If this landlord has a tax rate of 50% they would still rent out their room, but instead of their getting the economic rent, it would go to the government. This revenue can be used to assist the less fortunate members of society, increasing their happiness.

That is a summary of the theory anyway, and I’d like to have more to back up my claims. It would be great to work with economists to help make the case.

Desert theories

I also think that a very strong case can be made for the CLIPH-rate tax from the perspective of desert theory. In a CLIPH-rate tax economy people get more income if they either get more hour credits (more hours worked) or have a higher income. Income made from working will therefore generate much more of a reward than unearned income, something which chimes well with desert theory.

Desert theories aren’t particularly popular with political philosophers, though they seem to be more popular with the general public, who often talk about particular people getting more or less than they deserve. A dodgy banker, crook or tabloid “benefit/welfare queen” could be said to have much more than they deserve. On the other hand, people might claim that nurses, kindly and charitable soul, or other hard-working person get less than they should.

Philosophers have delineated a few different bases for these desert claims. One is that some are more productive than others and should be rewarded accordingly. This is the productive contribution desert base associated with David Miller, Jonathan Riley and Gregory Mankiw.

A second desert base holds that people who do more burdensome jobs should get more than others. This is the compensation for burdensomeness desert base associated with Julian Lamont.  According to this theory, the person who does dangerous or unpleasant work deserves more than others who have less burdensome jobs. Someone working very hard in the cold on a North-sea oil rig with a high risk of death deserves much more than someone who works in a comfortable office.

The third desert base has features from the two above and attempts to get around the problems they have. This is that people who put in more effort should get more than others. This view is associated with George Sher, Wojciech Sadurski and Heather Milne. There are issues with all three desert bases though they all have some intuitive appeal. One is the extent they link to what people earn on the labour market.

I believe there is strong case to be made that the CLIPH-rate tax does a very good job of tracking these desert bases. Under a CLIPH-rate tax system people will get more if they get more hour credits (work longer hours) or if they have a higher income, and particularly if they do both these by working longer hours for higher pay. This seems to track all the desert bases above, since market pay rates reward productivity, burdensomeness and effort, and the hourly element also represents a productive contribution, the burden of giving up one’s time and an effort. Meanwhile, people who receive mostly unearned income from gifts or economic rents will be taxed very highly.

Other theories

I don’t think that there is much traction in arguing for the CLIPH-rate tax from libertarianism, though perhaps it might work from a few of the less common versions of left-libertarianism. Nevertheless, it would be a stretch and I don’t find libertarianism compelling anyway so I can live without trying to make that argument.

Sufficientarianism is another theory that is plausible. While I’m sure it’s possible to make an argument from sufficientarianism I’m not sure whether it is worth attempting it. After all, there are lots of forms of sufficientarianism and many people advocate a pluralist theory anyway (sufficientarianism + some other theory). Plus I don’t see why the CLIPH-rate tax particularly does any better at getting people above thresholds except perhaps for the consequentialist/prioritarian reasons set out above. Let me know if you disagree and think I should write about this.

Prospects and next steps

What are the prospects for ever writing this book? We’ll see. I might be able to do it fairly quickly if I could devote a chunk of time to it, but other things always seem more pressing. Perhaps I can start with a few journal articles and see if anything develops from there. Maybe this is as far as it will get? If so, its nice to have a record at least.

And if anyone has any suggestions or wants to collaborate do drop me an email.

If work is important, we need to share it out fairly

I've had another go at posting on medium.

Do have a look.

Maine tax proposal: Working hours, effort and desert

I was interested to discover that a Republican legislator in Maine has proposed that overtime payments should be exempt from taxation. Its interesting to note why he thinks it would be a good idea and the links to my hourly taxation proposal. Its proponent, Chad Grignon, is quoted on a local radio station:

I submitted this bill on behalf of all working Mainers who put in more than 40 hours a week and deserve to take home more of what they earn. That being said, working overtime should not be viewed as something we wish to see discouraged. In my opinion exempting overtime pay from taxation should reflect the sacrifices that working Mainers make going beyond the 40-hour threshold.

The word that sticks out for me here is deserve, perhaps because I've been teaching about desert theories of economic justice this term. Why is it that people who work longer hours deserve more (and to be taxed less) than those who work fewer hours? The theory that most obviously supports this view is effort desert theory; people who put more effort into their economic activity deserve more than those who put in less.

Effort desert theory, associated with philosophers like Wojciech Sadurski is a very progressive theory, for three reasons:

1. Talents shouldn't make a difference. Some people find it easier to be productive than others. Effort theory says people should be rewarded for their efforts relative to others, not how successful they are.  
2. Gifts shouldn't be allowed. If income should relate to effort put into the economy, then people shouldn't be able to get money without putting in the effort. Those who got their wealth as a gift from their ancestors should then face punitive tax rates.
3. Investment income isn't deserved. People who generate income from investments rather than working aren't deserving--they aren't expending effort. So landlords (except when they are making improvements or providing services) aren't deserving. 

The Maine proposal, however, isn't obviously progressive; it is a reduction in tax for a select group. This would then leave the state with less revenue to assist the poor. However, perhaps this is actually progressive to tax some people less if they are working long hours for it.

Perhaps what this latest proposal picks up on is that there is a group in society that is often ignored by both the left and the right--people who work very long hours for low wages. Because their hard work gives them a reasonable total income they might not qualify for much assistance from the state. Some on the left might not like their materialist attitude as well. The right ignores them because they aren't talented and they generally don't want to give people extra support.

Effort and hours spent working

Time spent is one way to measure effort, particularly when the work you do is directed so workers aren't able to vary how intensely they work; the intensity is fixed by the nature of the work.

My hourly-averaging proposal might be of interest to the Maine legislature as this calculates people's tax-rate according to the number of hours worked. Those who work longer hours to attain the same pay would be taxed at a lower rate. It would apply the principle not just to a limited case of hourly-paid workers who cross a threshold, but on a sliding scale across all workers.

Practical questions 

There are of course practical questions with both my proposal and Rep. Gringon. How do you reliably measure people's hours? Well, his bill points out that employers are required by law to pay the overtime compensation to the employee. So the legal system is already taking account of the number of hours that people work. In this case, presumably, the worker has an incentive to insist on their rights against their employer whereas there is a problem for the Maine proposal and mine in that the employee and employer could collude to overstate the number of hours they work.

Getting around this practical problem is difficult but not impossible. Monitoring employment contracts, pay-rates for different kinds of work, and investigating unusual cases could do a lot of the job. Furthermore, employers are increasingly using technology to monitor workers. If the authorities had access to this information then it would be easy to verify the amount of time people spend working.

Prospects for hourly taxation

This is just the latest example that shows the relevance of time to distributive justice; numerous forms of tax credits being an obvious existing example. Hopefully people will take greater note of this as my hourly averaging proposal is the most thorough application of the principle that people who work longer hours should be taxed less.