Gracesgran No, Frank is talking about personal taxation.
^"I laugh when I hear people say "money doesn't bring you happiness" and I wonder if those people have experienced the alternative? Money in itself may not guarantee happiness but it does ensure you are warm and well fed. It pays the bills and for luxuries too. It could pay for your grandchildren to have a better education, holidays etc. if having money was really so bad, why don't those who have plenty of it (bringing them nothing but misery they would have us believe) give it away to a worthy cause?
If I suddenly came into some money I know it would bring happiness to me and my family. Does that make me shallow?"^
Gillybob There's a difference between having more, and having enough. It is highly damaging if people don't have enough for the basics like food, shelter, warmth, healthcare, education, a reasonable amount of leisure etc., but beyond that, it is well established that happiness doesn't increase.
Why don't people give it away? The same reason they seek it in the first place: status competition. If people will excuse me cutting and pasting some of this from another thread:
In essence people compete for status because higher status individuals obtain access to higher status, better quality mates. Now there are many ways of competing for status, but a consumer society is one in which the main method is consumption of goods. People are trying to consume more than their peers because that earns them more status, but the problem is that status is what is called a zero sum game; you only get more at the expense of someone else getting less. The Ford Sierra that satisfied when the neighbours all had Cortinas, looks a lot less appealing when everyone else has a Mondeo. The Smiths are only happy when they have more than the Jones’, but the Jones’ are only happy when they have more than the Smiths, so they’re locked into a competition to consume more and more, and wrecking the environment in the process, when no amount of wealth can ever make them both happy at the same time.
The term conspicuous consumption refers to whether the value of a good is judged in absolute terms or relative terms. Something like a central heating system for example is judged by how well it heats the house, and not whether it’s bigger than the neighbours, so that’s an example of inconspicuous consumption. A house or a car, however, are conspicuous because their value is determined by whether they’re bigger than other people’s. Since it is the conspicuous items which contribute to status, people will always tend to preferentially spend on these in favour of inconspicuous ones, even if it’s not in their objective best interests to do so.
This is why people get so irate about public spending: public spending elevates the wealth of the collective community, whereas private spending elevates your own wealth (and status) relative to that of others.
Conspicuous leisure is another canon of status competition: having enough wealth not to have to spend time on the vulgar process of earning a living is a status symbol, as is the wealth to pay others to do menial jobs for you. This then results in useful jobs and skills having low pay and status (plumber, builder, engineer etc.), whilst less useful jobs and skills assume very high status (pop star, footballer etc.).
Another method of status competition is conspicuous outrage, which derives from the psychology of conformity. In society people are under huge pressure to conform to what others do and expect, the price for not doing so can be dire. Therefore high status individuals can demonstrate their status by doing something outrageous to show that they don’t need to conform. This is what leads to fashion. A social elite will assert their status by doing something that is different, and then people beneath them will copy that behaviour in the attempt to acquire some of that status. However, the name of the game is to look like those above you and different from those below, so as fast as someone is copied, they will change their behaviour for something new. In this way fashions ripple their way down through the social strata from top to bottom, one after the other. The more wealth people have the faster fashions can change.
The last method of status competition is conspicuous waste: demonstrating the ability to afford to throw things away, this is why some of the campaigns to reduce waste are so naïve. If someone brags about the amount they're spending on a gym membership that they don't use, or buying expensive wine when they can't taste the difference they are both examples of conspicuous waste. Throwing food away after laying the table with so much food your guests can't possibly eat it all is another, it would have been a real faux pas if the food had run out. The archetypal example of this is the Kwakiutl potlatch.
The Kwakiutl were a tribe of North American Indians, renowned for holding feasts called potlatches, in which they would demonstrate their wealth to their guests by gratuitously destroying something. The competitions for status escalated to such a degree that they would end up by burning down the whole village.
The problem with status differentials is that if they become too large, they lead to all sorts of social ills as Wilkinson and Pickett show in The Spirit Level. Famous research by Marmot has shown how low status leads to both higher morbidity and higher mortality, quite independently of wealth. This is something that the Scandinavians appear to understand, better than us.
If you came into some money it would indeed make you happy, but only for a short while, and the reason is habituation:
The brain has evolved an ability to adapt to it's environment, therefore the nervous system will generate a response when the stimulus is changing, but not with an unchanging stimulus. A simple example is to hold a tinted cellophane sweet wrapper over your eye, and watch the way that the colour you see gradually fades after a few minutes. Take it away, and you see the complementary colour until that fades too. Or watch this. It's the reason why people may feel suicidal after an accident puts them in a wheelchair, but not after they've had time to adjust, and why people can't smell their own BO, for example. But it's also why an elated lottery winner doesn't still feel elated a year or two later, why people aren't still excited by new purchases a few months after they've bought them, and why the poor aren't impressed when they're told that they're better off than their grandparents were. They judge their wealth relative to that of the peers who live in the society they're habituated to, not that of previous generations.
Here's another example you can try: get three bowls of water, one hot one cold, one room temperature, and put your right hand in the hot and the left in the cold. After a few minutes put both hands in the room temperature bowl, and you will find that the same water feels cold to your right hand, and hot to the left. The reason is that they have become habituated to different temperatures.
When you drive to the dealer to trade your car in for a new one, you are full of excitement imagining how much better your commute will be in the new car, but you have completely forgotten that you felt the exactly the same way about the car that you're sitting in when that was new. Habituation means that the satisfaction of a new purchase doesn't last, which is another reason why increasing wealth produces no more happiness in the long run.
Some people seek an escape in drugs or alcohol, but again they're thwarted by habituation. As they get used to the dose they're on the effect fades, and so they have to increase the dose in order to maintain it, only for the same to happen again. They still feel worse if they reduce the dose though, so they're trapped, addicted, and they just keep increasing the dose until it kills them. If we don't go cold turkey we'll just keep increasing the dose of consumption until it kills the environment we're dependent on, and us with it.
What we need is to cultivate a society in which status is obtained by being environmentally friendly instead of from consumption, but that's a catch 22. In order to make the change, you need the population to stop denying climate change, but people are not going to do that so long as they're earning status by consuming.
It's a classic example of the Prisoner's Dilemma: society is collectively better off if people stop competing, but each individual is better off if they do compete. The Tragedy of the Commons.
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