Cameron continued.

Important Points

 (A) Entry-level wage adjusts the level of employment and the total expenditure on additive tax. As the UK is currently competitive internationally it’s likely this isn’t much less than current minimum wage but lowering it will boost viable employment.

(B) Net wage at B) MUST have a rising gradient to give employees incentive to move towards better pay which in turn gives incentive to employers to pay more to retain good employees. If this region is flat additive tax will be seen as a simple government pay supplement to maintain a living wage for unviable jobs. It’s vital that these incentives make this region an equally viable part of the jobs market as a whole.

(C) The notional ‘living wage’ is the pivot point of the whole system, the crossover point from additive to subtractive tax. Adjusting it gives the government the opportunity to achieve its required tax revenue.

(D) The gradient of paid wage and net wage at any point on the curve adjusts the incentive of employer and employee to increase the paid and received pay respectively. Intermediate tax break points (D) allow control of the shape of the curve in accordance with statistical evidence of requirement.

(E) Extreme high pay must be curbed to avoid social unrest. This applies to any society, so though the super paid can threaten to leave the country they will take with them this element of social unrest. To avoid unrest wherever they end up the general the population will rebel or demand a reasonable differential i.e. a lot more, which will destabilise that countries economy. Any sensible country will limit extreme high pay by consensus for the good of all concerned. The current emotional debate about bankers must be replaced by a rational one. To this end the extreme end of subtractive tax (E) must act as a disincentive to even higher pay. 

There feels to me to be a kind of hysteresis quality about this approach to tax, but what do mice know about hysteresis?