Changes in taxes on capital income also generate bigger responses than changes on labour income.
Taxes on corporate and capital incomes are lower than those on labour income.
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The conventional wisdom is that high taxes on returns to capital are damaging to economic growth taxes on labour income not so much.
But even there an array of reforms, from a stronger currency to an overhaul of subsidies, is needed to boost labour income and encourage consumption.
This would and does mean that the wages and salaries part of the national income falls while the labour share of national income does not.
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The labour share of income is not equal or equivalent to wages and salaries.
FORBES: If Even Bill Gross Of Pimco Gets This Wrong What Hope For The Rest Of Us?
The importance of this is that the labour share of income is that second number, not the first.
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Thus it is entirely possible for the labour share of income to change without that profit share changing.
FORBES: If Even Bill Gross Of Pimco Gets This Wrong What Hope For The Rest Of Us?
The low-income labour market remains tight, as many factories and companies are running at 20% below ideal employment numbers.
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The labour share of income has been falling because the government share has been rising, not because the profit share has.
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Firstly, it is not true that the profit share and the labour share of income are the only two components of national income.
FORBES: If Even Bill Gross Of Pimco Gets This Wrong What Hope For The Rest Of Us?
For if we look at the UK numbers for exactly the same thing we do indeed find that the labour share of income is falling.
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For once again these will not be in the wages and salaries numbers but will be in the labour share of income, the total compensation numbers.
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These explain the fall in the labour share of income.
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So calling for a solution which raises the labour share of income: well, it might indeed be nice to have but we cannot say that it has been causing the problem, can we?
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Over in the European numbers for the same thing we have capital share, labour share, mixed income and taxes minus subsidies.
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The second is that Gross has used the wages and salaries share of national income, not the more correct total compensation, or total labour share, of that national income.
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In the past eight years under Labour, the number of income-tax payers has risen from 26.2m to 30.5m.
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The often-fuzzy line between income from capital and labour means a large gap in relative tax rates breeds tax avoidance.
The share of national income which goes to labour has fallen over time and apparently this is a very bad idea indeed.
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Furthermore, household debt has risen under Labour from about 100% of disposable income to a record 140%.
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And some Labour MPs have protested that low-income home sellers, particularly in the north east of England, will struggle to pay for the pack.
He may have cut 1p off the basic rate of Income Tax, but overall Labour have increased taxes by the equivalent of 8p in the Pound.
However, countries could make a number of reciprocal concessions, such as removing all controls on the movement of labour among countries with similar levels of income per head.
Other countries have also rung up hefty bills since the 2008 financial crash, but are at a much later stage of development than China, which faces a middle-income trap as its cheap labour pool dries up.
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Shadow Welsh Secretary Owen Smith, who has previously been cautious about Wales acquiring income tax powers, said Labour wanted a new law to implement the Silk commission to give the Welsh government "desperately needed" borrowing powers.
If labour share is, to make up a number, 40% then 40% of mixed income and 40% of taxes minus subsidies is added to the labour share.
FORBES: Labour's Share Of The National Income Is Falling: But Is It Being Measured The Right Way?
This will help New Labour because these students will not benefit as much from a university education and average national income will not increase as much, keeping more families above the New Labour poverty measure in the future.
Later, Mr Blair gave his clearest hint yet that Labour would not raise the top rate of income tax.
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