Taxation as a co-ordination game

I fear Tim is missing a point here:

Clearly, an individual who really believes that the Government is more effective at spending his money would voluntarily offer up more than the legal minimum of taxation. That we have fewer people acting in this manner than are to be found writing columns and making speeches calling for higher taxation shows a certain gap, does it not, between public utterances and private actions?

What he's missing is that public finance is a co-ordination game.
Put it this way. Imagine Polly Toynbee - for she is the elephant in this room - were to send in a cheque to the Treasury. Her Viking God would not then say: "Ey up, Polly's finally stumped up. We can pay nurses more." Her money can only be spent sensibly - in Polly's view - if policy changes. And this requires a certainty about future tax revenues that can only be achieved if everyone pays more. Polly's contributions, on their own, would indeed be wasted.
An analogy might help. Say there was a small fire in a cinema. The best outcome for everyone is that all stay calm, and leave without panicking. But if everyone starts to panic, it's quite sensible for you to leg it.
If Polly were in the cinema, it would be entirely rational for her to call for calm, but then run for it if her calls went unheeded.
Sometimes, collective choice is not merely individual choice writ large.
This doesn't, of course, mean that Polly is right to want higher taxes. And it doesn't mean she isn't a stupid hypocrite. It just means the argument against her isn't, in this case, as knock-down as Tim reckons.

Comments

[Tim Worstall]

So, how did you know that I took her name out of the first draft?
Yes, of course, you're right. Rather wanted to provoke.

[Alex]

I'm sure Tim has used this argument to attack her before over climate change - the argument being that it is irrational to minimise one's own CO2 emissions if, say, China does not also do so. (Climate change mitigation is of course also subject to the fallacy of composition, in which if everyone follows the same argument we're all fucked.)

It is telling that he notices no inconsistency in his own argument.

[Mr Eugenides]

I take your point, but while Polly does indeed oppose certain planks of government policy, like the internal market in the NHS and so on, quite a lot of her oeuvre really is just about increasing spending - on Sure Start, on reducing inequality, and so on: she argues that Brown is doing lots of good, but could be doing so much more were it not for the Blairite faction.

And it's not exactly unknown for her to advocate one thing and do another - witness her call for all salaries to be in the public domain, which prompted a predictable flood of comments challenging her to start the ball rolling.

[james C]

'It just means the argument against her isn't, in this case, as knock-down as Tim reckons.'

But he got paid for talking out of his fundament, so well done that man.

[Tom Freeman]

To pick a nit:

Tim says that “we don’t have an equivalent to the ‘Gifts to the United States’ account, which has been running since 1843. Last year, it received $2,671,628.40; which compares well with the £461,204.95 donated by those five patriotic Britons.”

This works out as 5.79 times as many dollars as pounds donated. Given that there are nearly five times as many people in the US as in the UK, and the exchange rate last year of more than $1.75 to the pound, that actually means that we’re giving more – especially if you factor in that we have a lower GDP per capita.

[angry economist]

Hey, when Tim strays into journalism, just like many other journalists, all the facts and angles of the argument don't always apply!