And given his well known editorial policy I\’ll repeat my comment there here:
\”Let’s be explicit about what he’s saying here: he’s explicitly condoning crime. He’s saying we should simply allow it. He says we’re better off for this criminal conduct.\”
Not quite. I\’m saying we\’re better off by ignoring rather than attempting to eradicate this last amount of crime. Something we actually do all the time: we don\’t send out detective squads to catch jaywalkers, don\’t have riot police making sure late night drinkers put the burger wrappers in the bin. We chase and prosecute crime according to the resources that have to be spent to do so and the benefits we get from having done so.
As to the maths of the example above. Say it\’s cash in hand no VAT work (which a lot of it is). Pre-cracking down on the tax evasion there\’s £10 billion of economic activity going on. Post-crackdown there\’s that £2.33 billion in revenue, yes there is. But there\’s also only £6 billion in total economic activity. Is £2.33 in tax revenue worth the loss of £4 in economic activity? Clearly possible to have different views on this but I would argue probably not.
If the numbers change, we get £2.33 in tax revenue and only a £1 reduction in activity…..or let\’s say for each £1 in revenue we get only a 30 p reduction in economic activity (which is about what the tax deadweight costs are for an economy like ours) then perhaps I would argue for the crackdown.
But not when a crackdown would make us all, in aggregate, poorer, no, probably not.