Emergent Ventures UnConference - Georgist tax modelling/Immigration deadlocks

Notes on my immigration session and general gratefulness

This weekend, I attended the unofficial EV UnConference in London organised by

Benjamin Yeoh

.

I got a ton out of it. I can’t wait for the next one. Not unlike other interactions I have with EV fellows, I felt like, while regular networking is the grease that lines my wheels to continue moving, EV connections are rocket fuel that reminds me I need to ditch my medieval cart because humans fly aircrafts now.

An UnConference is a concept where, rather than having a fixed schedule, the attendees volunteer to run sessions on whatever they want to discuss. Anyone can suggest and run a session on whatever topic they want; no preparation is needed, either. People then decide which sessions to attend every hour. They don’t have to stay in one if they realise they don’t like it. Sessions can stop early or overrun.

Georgist Taxation System/Tax Modelling Tool

One session particularly inspired me. I was not paying attention because someone was threatening to sue me over something I wrote so my nose was glued to my phone. The topic of the session was ‘Georgist Taxation System’. During the final 5 minutes, the group dissolved and two new people sat down so the guy presenting offered to repeat the key points for them. My guardian angel gently took the phone off my hand (don’t worry, honey, you will have plenty of legal threats to muddle over in this life) and lifted my chin to tune in to what I had missed for the last 55 minutes. I am so glad I did. The guy described a modelling tool called TaxSolver, which I immediately recognised as a solution to a gazillion of Rachel Reeves’ (UK Chancellor) problems.

His name is Meno Schellenkens and he is a data scientist and civil servant from the Dutch Finance Ministry. Together with Dr Mark Verhagen, a fellow at the Leverhulme Centre at the University of Oxford, they developed a tool to help the Dutch government develop tax policy.

The problem, he said, is that modern states have complicated and layered tax policies. Every time the state wants to increase or cut taxes, it will devise a tweak and then try to model the impact of these tweaks. This is very difficult to do because there are always many parameters to consider, and results often produce disproportionate losers and winners.

For example, when Labour tweaked farmers’ inheritance tax, they came out and said, " Why are we picking up the bill? The same could be said for PIP recipients whose benefits were cut or private school parents whose tax exemption was scrapped. The modelling tool this Dutch duo developed does the opposite of what current civil servants do. Rather than asking what tax change you want to implement to determine its impact, it asks what effect you want to have, and it will suggest the tax changes you need to make. For example, you can say the Treasury intends to raise an extra £8 billion from taxation but not impact anyone under the age of 27 who has children but doesn’t own their own house and for everyone who does get impacted you don’t want them to lose more than a certain percentage of their purchasing power. You then get suggestions for how to get there. The incredible benefit of this is that you can create more equitable tax policy because you don’t have to punish or reward any one group of taxpayers more harshly than others.

I will write about this when the working paper comes out. If you are an editor and are interested in me writing about this and interviewing the two people saving bureaucrats from themselves, let me know. I also want to connect them with the British Government, the Labour Party, and anyone else who will listen. Are you a British politico and this sounds interesting? Get in touch.

Immigration and integration.

I did not plan on running a session myself as I was unfamiliar with the concept and unprepared, but my eternal Just Do It nature meant I was the first to suggest running one. I needed to discuss the topic du jour, immigration, with non-Westminster-pilled nerds and I am so glad I did because they shared some delicious nuggets of analysis that you would never find on race war Xitter, so read along if you are an immigration worrier.

We focused on the UK, but the points raised could well apply elsewhere:

• Is high legal migration a net economic positive? Do the very high earners make up the majority of low earners, meaning we should reduce visas for lower-paid professions?

  • There’s been a vibe shift recently where more people question whether legal immigration is a net fiscal positive because of the impact on services and lack of housing. Also, because of the perception that lower-income migrants bring a lot more dependents and eventually, or even initially, rely more on the welfare state. A fellow from Ireland drew this graph for us, and then shared it with me for this post:

    

  • I was extremely pleased to hear a strong rebuttal to the above analysis, because it has gone unquestioned in the British media. Duncan McClements, Fellow at the Centre for British Progress, kindly shared his own data and analysis and permitted me to share it here:

    

    Data and modelling by Duncan McClement

    • According to Duncan, the OBR modelling is not accurate because:

      •⁠ ⁠Migrant wages are too low.

      Aria Babu
      , Editor at
      Works in Progress
      , also observed that the lowest wage group earns below minimum wage, which is illegal. Any decent visa scheme for workers would stop that. The full-time minimum wage is now 70% of median income, so it is very misleading to describe them as low-wage migrants. (It took my poor brain many squeezes to get this, but once I did, I found it very disappointing that the OBR would make such a glaring error.)

      •⁠ ⁠There are no discounts (which makes the burden of paying for native education seem much lower than it actually is, because spending today is more costly than spending tomorrow. However, it slightly raises the burden of immigrant pensions vs natives.

      •⁠ ⁠It keeps public capital stock constant but higher population growth should lead to a lower equilibrium capital stock per capita (Also, much of public spending doesn’t need more capital - a problem they acknowledge, but don’t adjust for (!!!)).

      •⁠ ⁠It doesn’t account for public goods (national debt, national defence, etc).

    • Aria pointed out that this modelling assumes that we won’t cut spending on old people, even though the same paper suggests that will make us bankrupt, so we wouldn’t even reach the point at which the migrants are costing us money.

    • Aria has previously explained how dependency ratios show pro-immigration and pro-natalism policies go hand in hand in this post. It is excellent. Read it.

    • She summed up the problem with the OBR report showing migrants being a net cost as this just showing us that

      • The UK is bankrupt without major welfare cuts.

      • The only people who are net contributors are high earners and migrants.

    • This point is worth highlight. The media line dominating right now is: the data proves low skilled immigrants are net cost. But *everyone* who is not a high earner is a net cost under our current pension system. Because nobody is paying/reproducing enough to keep the pyramid scheme going!

    • There is a skills mismatch because of how expensive visas are. People with multiple degrees cannot get jobs they are qualified for because employers cannot pay for them. If the system works as designed, is this economically optimal, let alone fair?

• So the economics are disputed, although there was disagreement about wether public services (hospirals, schools etc.), infastrucure and housing suffer from higher influx of people. But the other issue with immigration is wether there is satisfactory integration in the UK, at the current levels and with the current state provisions.

• What is there to do about sectarianism and the lack of national pride in the UK, particularly England, from both foreign born and native people?

  • MPs campaigning on sectarian grounds or on niche community issues are becoming more visible (E.g. the airport in Pakistan). This did not use to be a problem (MPs job is to respond to their constituents needs) but now the optics are becoming more jarring in the current context. Until recently (and I think is still the case), Commonwealth citizens had the right to vote in general and local elections without British citizenship.

  • The race riots in the summer gave us a sour taste of what could follow.

  • Racism towards white English people in South Asian communities is left unchallenged by our political class. For example, one Pakistani British fellow said Pakistanis sometimes have very racist and sexist attitudes towards English girls, using them as examples to be avoided for their daughters. The grooming gangs scandal is the most obvious and extreme example of this attitude expressing itself in systemic discrimination and harm.

  • Racism more generally is on the rise. We are swinging from peak cancel culture to nazi jokes being acceptable. Looking at the race riots in the summer, how do we address issues of integration without giving fuel to racial/ethnic tensions? When racial/ethnic tensions arise, how do we respond to them?

  • It is part of the English character to be self-deprecating and snobby about their own country, but that means that immigrants are not encouraged to adopt the English identity as their own. This is different in Scotland, where immigrants start actively and publicly showing love for Scottish culture and identity within a matter of years. For example, someone who has just gone to university there will get married in a kilt. It was noted that Scotland is 10% foreign-born, whereas England is 20% - having so many people around from your own country breeds complacency or resistance to assimilating.

The conference dinner was at a Sitchuan restaurant called Taste of Chongqing. It was excellent.

Thank you to everyone who helped bring this together.