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Comment So rich French people have written a letter demanding that they be taxed more. The text (fortunately in English) is here.

The missive began:

We, chairmen of companies and business leaders, business men and women, finance professionals or wealthy citizens, call for an exceptional levy that would target France's richest taxpayers...

All very jolly and public-spirited you might think, but applying a little bit of economic theory reveals that they're somewhere along the "speaking with forked tongues" to "lying toads" continuum.

That bit of economics is the concept of "revealed preferences": translated out of the jargon it just means don't look at what people say, look at what they do. For example, Liliane Bettencourt, the L'Oreal heiress, is one signatory calling for higher taxes on herself: it's also been widely reported that she has received tax refunds under French "fiscal shield" provisions intended to limit taxes on the wealthy to 50 per cent. Madame, if you really want to pay higher taxes, just don't cash those cheques.

We see the same sort of call everywhere of course. All sorts of people call for higher taxes: it's just that very few actually pay higher amounts of money. We can see this in both the UK and US.

The US has an account, "Gifts to the United States", specifically for charitable-minded citizens. Send them a cheque, they'll cash it and spend the money on government. Last time I checked, the figures they received were $2,671,628.40. Roughly speaking, 1 cent per head of population. OK, so, yes, taxes were too low in the US that year. By exactly that amount.

The UK numbers aren't even that good. In the same year only five Brits sent in cheques to the Treasury and four of those people were deceased. No, the fifth was not Polly Toynbee, despite the impression one might get from her columns (well, I don't know it wasn't her but I'm sure she would have urged the rest of us to do the same if it were).

An FOI request revealed that from 2002 to 2009 actual living people contributed £7,349.90 to the Treasury, over and above their legally due taxation. No, not each or per year... but in total.

So while we get all sorts of rhetoric from all sorts of people arguing that taxes should be higher, almost no one seems to think that it's their own taxes that should be higher. Even when we get these rich people insisting that they'd be quite happy to pay higher taxes, we know that this isn't really true. For if rich people wanted to pay higher taxes then rich people would already be paying higher taxes. They ain't so they don't.

Of course, we could say that rich individuals don't want to pay more but they'd be happy enough to do so if every rich person had to. Which might even be true but that's not being public-spirited that's just being mean: everyone's got to suffer if I have to.

The correct reaction to this French letter (fnarr, fnarr) is simply to ask, politely, for those little thank-you letters the French Treasury has been sending the signatories noting their previous public-spirited additions to the public finances. If they cannot be produced because they do not exist, then we can reject the hypothesis that they really do wish to pay higher taxes: for if they really did, they would have already done so. ®

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