Fed Fellow Fun & Fury
Among the many nice things about being a Federation Fellow, one of the nicest is the way it infuriates some of my opponents. I mentioned the IPA a while back and now Peter Saunders of the Centre for Independent Studies has had a go in today’s Fin. He’s responding to a piece of mine developed out of this post on bracket creep, though the article switched the focus from Saunders to an earlier presentation of the same argument by Peter Costello. The same piece produced a somewhat incoherent letter from Sinclair Davidson of RMIT, who couldn’t come up with anything better than to say that my article was “drivel”.
Anyway, Saunders wants to argue that tax rates and economic incentives influence location decisions and decides to use me as an example, saying that I moved to Queensland to take up the Fellowship (he even quotes from this blog). In fact, as my handful of long-term readers may recall, I moved to Brisbane in late 2002 and didn’t get the Fellowship until March 2003. My reasons for moving were much the same as those of the other 50 000 people who made the same move that year, and are summed up here.
The Fin is subscription only, but I’ve added some relevant extracts over the fold
fn1. It’s not very noble of me to take pleasure in annoying my opponents, but I can’t deny that I do.
fn2. To be boringly serious, I don’t, of course, deny that incentives affect decisions, but I think there are many more significant incentives in our system than the top marginal tax rate.
fn3. Saunders is open to a tu quoque here, having recently moved to this high-tax hell from the dynamic UK.
Here’s Davidson’s letter
Taking John Quiggin (“Creep claque’s silly figures”, Opinion, May 20) at face value the federal government should immediately raise taxes to 100 per cent of all income.
By selfishly demanding the government restrain their tax-and-spend policies, high-income earners are impoverishing us all. What drivel. It is not true that any society has been taxed to prosperity. What drivel!
In fact, Charles Adams in his excellent book For good and evil: The impact of taxes on civilization has shown that high taxes have detrimental impacts on society.
I hadn’t heard of Adams, but Google reveals him to have some equally interesting views on slavery and the American Civil War
The next day there was a letter in response from Brent Howard, under the heading “What Drivel! Quiggin Was Misquoted”, making the point that
Other readers might turn to the work of leading tax academic Joel Slemrod, who observed in 1995 that the existing cross-country literature provides “no persuasive evidence that the extent of government has either a positive or a negative impact on either the level or the growth rate of per capita income”.
If you happen to read this, thanks Brent!
Here’s the relevant extract from Saunders
It is odd to hear an economist arguing that monetary incentives and disincentives do not affect people’s work-life behaviour. In Quiggin’s case, this is particularly ironic, for he owes his present position to the theory that incentives can and do influence how and where people work.
Worried about retaining the best brains in our universities, the Australian Research Council last year introduced “Federation Fellowships” aimed at encouraging “outstanding Australian researchers to return to, or remain in key positions in Australia”. The principal inducement was an “internationally competitive salary” of $235,000 more than double what most professors in Australia get paid.
Notwithstanding his insistence that incentives don’t matter, Quiggin successfully applied for one of these Federation Fellowships, announcing on his weblog that he had been given “one of the biggest awards going for Australian academics”. He moved from Canberra to Queensland as a result.
It seems that not even left-wing intellectuals are immune from monetary inducements.
I must say I like the bit about ” the best brains in our universities”.