The assumption of neutrality in Mirrlees

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The Mirrlees report claims — it was trumpeted from the platform at yesterday’s launch — that it was ‘neutral’. It did not seek to raise new revenue, they said. They did not want to redistribute wealth, they said. They did not want to recommend rates, they said. And all this, they said, was a virtue.

What hypocrisy. The claim of neutrality is in this matter is absurd. And the last thing it represents is objectivity. It is a subjective choice, in the way presented by this team, to support the status quo. So they are saying tax rates are right, tax revenues are acceptable, the economy from which the tax is collected is properly ordered, and so on.

But this is again absurd. The tax system reflects that economy, and the economy that tax system. So if you suggest a change in tax base or tax you are not neutral, You will change the economy, you will by implication change the tax base and you will therefore change the tax collected. Any recommendation made is not, therefore neutral. In that case the claim to neutrality is obviously false.

But in the case of Mirrlees it’s not just false, it is also untrue. First they chose when undertaking their work — at least as they presented it yesterday — to ignore some things. They totally ignored inherited wealth in discussing savings, when they suggested all savings are just deferred consumption which smooth over a lifetime. This is very obviously untrue. So implicit in their neutrality was not just an acceptance of the current distribution of wealth in society, but a willingness to ignore its impact.

As they ignored it for example when they suggested that inequality in the UK results from differing access to work — and then ignored the fact that this is almost always the consequence of the accident of birth, and is becoming increasingly so. It was not neutral to ignore that — it was a conscious act to turn a blind eye to it.

And to then suggest that the amount of corporation tax collected should be reduced, as Steve Bond did, that the corporate tax burden should be shifted onto labour, as he did, and to suggest that much savings income should be entirely tax free, as he did, is not an act that is neutral. It shows a profound political (not economic, but political and subjective) bias to the political right, towards the interests of the wealthy and to the maintenance of a structure in society that preserves and in the case of this report enhances inequality in society.

Please don’t call that neutral. And don’t claim you’re objective when you do. Be blatant and say you’re promoting a profound right wing agenda. At least we’d then think you honest. But right now I can’t genuinely believe that of the Mirrlees review team because by presenting the case as they do what they claim and what they’re doing are inconsistent one with the other on the logic I present here. And that undermines their credibility.