I love numeracy, which is literacy with numbers. That’s why I love the second line in “Taxman.” If the taxman is getting 19 pounds and the person taxed is keeping 1 pound, that implies a marginal tax rate of 95 percent, which is the actual rate they paid on their “unearned” income. I put “unearned” in quotation marks because, of course, it was earned—the Beatles earned it on their investments.
George Harrison also knew on whom to blame these high tax rates: Britain’s politicians. That’s why in the background, you can hear the singer castigating greedy, grasping Mr. Wilson and Mr. Heath. Harold Wilson, of the Labor Party, was prime minister from 1964 to 1970, when Harrison wrote the song. Ted Heath led the Conservative Party from 1965 to 1975. He was prime minister from 1970 to 1974, but that was well after the song was written.
Fortunately, Margaret Thatcher became prime minister in 1979. At the time the top rate on both earned income and “unearned” income (you can tell that I hate that term) was a hefty 83 percent. That same year, as well as cutting rates at lower income levels, she cut the top rate to 60 percent and in the late 1980s cut it again to 40 percent.
This is from David R. Henderson, “We Need Another George Harrison,” TaxBytes, Institute for Policy Innovation, May 17, 2023.
Read the whole thing, which isn’t long.
