And doesn\’t this just screw over Ritchie\’s numbers?

Tax dodgers are costing the UK nearly £200 per household – a total of £5.2billion every year, according to a report.

The unpaid taxes would be enough to provide £21 a week to every household in fuel poverty or double the amount of universal childcare entitlement to 25 hours per week, the study from Oxfam said.

The figure only covers tax evasion by individuals. If the amount of tax lost by the public purse through tax avoidance and illegal invasion by individuals and companies is added together, the figure is more like £32billion a year.

Ritchie normally claims something more like £120 billion for avoidance and evasion put together.

Obviously Oxfam are terribly off message here.

A proper carbon tax would lower the cost of petrol

As I\’ve been saying for years now:

The Office of Fair Trading today published a report concluding that the reason petrol prices have risen so high is due to fast-rising taxes and higher oil prices.

If the Stern Review\’s carbon tax had been implemented that would have meant around 11 p on a litre ($80 per tonne CO2-e x emissions from one litre).

The fuel duty escalator was introduced back in the 90s and we were told that it was \”to meet our Rio commitments\”. I.e, that it was indeed a carbon tax. That escalator has added over 25 p to the cost of a litre.

Ergo, a proper carbon tax would lower the price of petrol. For here\’s the point about Pigou Taxes. They do not mean that tax rates must be higher. Rather, they argue that there is an optimal tax rate: which can indeed be lower than the one currently charged.

We can go further. A proper carbon tax would apply to all of the UK\’s 500 million tonnes of emissions. Say, $40 billion a year. Or around £25 billion say. £28 billion maybe.

And a carbon tax is indeed the complete and total solution to climate change. It is not necessary to do anything else at all.

The thing is, we\’re already paying that carbon tax. We already pay \”green taxes\” of that amount. Not quite on all the right things, we pay too much on petrol and not enough on some other emissions.

But a proper carbon tax, that complete solution to climate change, all we\’ve got to do is move around the taxes we already pay. And then we\’re done.

Interesting, isn\’t it?

Remittances larger than official aid

Not that I\’m surprised or anything but this is an interesting point:

But now, the flow of migrant money around the world has shot up to record levels as more people than ever cross borders to live and work abroad. It\’s known as remittance money, and in 2012 it topped $530bn (£335bn), according to the latest World Bank figures.

The amount has tripled in a decade and is now more than three times larger than total global aid budgets, sparking serious debate as to whether migration and the money it generates is a realistic alternative to just doling out aid.

After all, it\’s not just larger than aid it\’s almost certainly more effective than aid as well.

Well, no, not really

If implemented, the Prime Minister’s proposal for a 45p minimum price per unit will have the “biggest impact” on those who drink at home, according to academics.

It will end supermarket offers – such as three bottles of wine for £10, or multi-buy deals on crates of beer – that are very popular with middle-class drinkers, they say.

However, according to the researchers, who have modelled the likely effects on consumption and health, a 45p minimum unit price will save 10,000 lives over a decade.

It won\’t do either: not for any length of time.

Because it will be declared illegal under European law.

Ritchie on Spain

Of course Spain has massive problems; it has also had massive tax evasion and a completely absurd property boom. But these are falls in retail sales. Consumption is collapsing in the wake of tax rises and austerity cuts which in combination are destroying all prospect of any economic recovery and in the process are eliminating any chance that Spain can address its debt issues.

This is the realtiy of what George Osborne wants for the UK.

This is what neoliberalism and its small minded practitioners prescribe.

And it does not work. It just creates the destruction of value, and not just economic value at that, but the real value of human endeavour.

When can we put this madness behind us?

Leave the Euro maybe?

For that is what is causing the disaster in Spain. It\’s not neoliberalism at all: it\’s the euro, which is a decidedly non-neoliberal project.

If you have your own currency, your own printing presses, then you can, in a corner like Spain is, deliberately inflate the money supply (from QE to helicopter drops of cash, as Friedman himself pointed out) and thus you don\’t have to go through this hard austerity.

I don\’t claim that monetary theory will solve everything. But I do claim that it will solve monetary problems. And that\’s what Spain has at the moment: a plummeting money supply. It was Friedman himself who pointed out that this is what entirely fucked up the US in 1930. That they\’re doing it again in the name of \”Europe\” doesn\’t make it any less tragic: and nor does it make it neoliberalism.

This is, in fact, anti-neoloberalism. And yes, we\’ve been shouting for years that this would happen. And since it has started happening we\’ve been shouting that the solution is to break up the euro. Or if that can\’t be done then the ECB has to be doing that QE and helicopter drops.

I don\’t mind being blamed for the things that neoliberalism does do (like, increase in country inequality) but I do object to being blamed for what we warn against.

Question for the telecoms techs out there

So, this Timmy in Czech thing seems to be progressing well. Obviously, slips \’tween cups and lips and all that but well.

Which leads to a little telecoms question. As we move into production I\’ll be spending some time at home, in Portugal, of course. But the bulk of the time will be split between Germany and the Czech Republic. It just happens that the minerals and mines and expertise and engineering companies and etc etc are spread across both sides of the border. We\’re deeply unineterested in what happens more than 25 km into the Czech Rep, and similarly deeply uninterested in what happens more than 30km inside Germany.

(Just as an aside, did see a pub for sale yesterday, one that just about straddles the actual border. Should I?)

This is just great and fine: except for telecoms. For standing at one mine dump, trying to talk to someone standing at another mine dump from the same deposit, becomes an international call.

And of course it gets much worse if one is using a smartphone, to keep up with email etc. The idea of having such a smartphone that is collecting data on international roaming for a week or more at a time is horrifying.

There are two theoretical solutions to this.

1) Two smartphones. One for each side of the border. This obviously means two plans (but they\’re cheap enough) and two phone numbers, which is a pain in the bum.

2) A smartphone that treats Germany and the Czech Republic as one territory. Or even, if this is possible, one that treats all of Europe as one. Including data of course. Or at very minimum, one that gives just one low tariff for phone calls across borders.

I\’ve heard that there are corporate solutions that work along the line of 2). But while it might well be a \”corporate account\” it\’s still going to be just me. So there won\’t be 500 people doing this sort of running around.

So, anyone any ideas? Is there some company out there which would offer me a deal whereby I\’m not making international calls or data roaming everytime I step across the border (which, on some days, could be three or four times!).

Mr. Chakrabortty on the economy

Take the golden age we apparently enjoyed under Tony Blair. Let me quote again here the finding from Manchester University\’s Centre for Research on Socio-Cultural Change that in the Midlands, the north, Wales and Scotland between 1998 and 2007 the private sector created almost no net new jobs. North of the Watford Gap, it was left to the state to provide employment, and effectively cover up for the inertia of businesses.

OK, that\’s bad.

Meanwhile, new recruits to the workforce were told they had to get a degree – and a shedload of debt – to get ahead, only to come out and find there weren\’t the commensurate jobs for them. Sure, Oxford mathematicians could toddle off to Barclays Capital. But a graduate with a history degree from a former poly soon learned the truth of this verdict from Ewart Keep, economist at Cardiff University: \”Statistically, he\’s unlikely to earn any more than if he\’d simply left school at 18.\” And that was before the slump.

Yup.

As for their parents, take this finding from the Resolution Foundation: between 2003 and 2008 when the economy grew 11%, the typical English worker outside London saw their disposable incomes actually fall.

Indeed, rising total incomes swallowed by house price rises.

So, we\’ve several things wrong with hte economy. And things that we\’d like to solve.

We want to make housing more affordable so that disposable incomes will rise. Great, the latgest component of a house price in the South is the value of the planning permission. So, let\’s issue mroe planning permissions to bring that price down.

University? Why not make the price of it explicit. So that those thinking of doing history at a former poly realise that it really is about personal development, not a financially astute move.

Government crowding out private sector job creation? Why not have less government so as to reduce the crowding out?

So, current government policy is along the right lines at least to solve all three of these problems.

And aren\’t people like Mr. Chakrabortty complaining about it?

Polly and statistics once again

British mothers have one of the lowest employment rates in the OECD because we have the third most expensive childcare, sometimes of mediocre calibre.

Hmm. One of the lowest, eh?

Here\’s the OECD numbers on maternal employment.

We seem to be right in the middle of the pack actually. Number 20 in a list of 37. And eyeballing the chart, at 65 or 66%, just a fraction off the mean of 66.2%.

This could be many things but it ain\’t \”one of the lowest\”, not in any normal meaning of that phrase.

There\’s also something rolling around at the back of my mind. These restirctions, now beiong loosened, on how many children a child minder can care for. How old are they? I have the impression that they\’re a decade old at best. So all the predicted disasters that will come from relaxing them: well, what did we all do more than a decade ago?

@RichardJMurphy finally gets one right: Oh, wait…..

Let’s try another reformulation:

Because companies can’t pay tax they should be taxed as if they’re individuals under income tax rules at income tax rates on their worldwide income just like all other natural people

Now that, I think, works nicely. A UK company pays UK income tax rates now at standard tax rates of 50% and shortly to be 45% on their worldwide income wherever arising and whether remitted or not to the UK and let’s stop all of this nonsense about territorial taxes, remittances, and so on for companies. Let’s create a level playing field. That should give Bill Dodwell something to think about.

Well, yes, that is actually the argument. Just as an individual can deduct interest for business purposes, has allowances for investment etc. Yes, tax all profit that individuals receive from business in one manner and one manner only.

In the case of an incorporated business this would mean taxation of distributed profits at the normal marginal rate of the recipient. Simples. Abolish corporation tax, as companies really do not carry that burden anyway, and tax dividends, interest, capital gains, received from such companies at normal recipient marginal rates.

And the tax would have to be at the level of the recipient, not the company. Otherwise we would be taxing French, German, USian, holders of UK domiciled shares on their income. And that\’s not right at all: that income is righteously for the French, German, USian governments to tax, just as the income of UKites is righteously for the UK to tax. If the tax were at the level of the company then if, as an absurd example, Vodafone made profits in Germany then those profits should be taxed in Germany and not in the UK. And we know that\’s not right because Murph has told us it\’s not.

Yep, I\’m fine with that. So are most economists. So Ritchie\’s actually managed to get one right.

Ah, wait, sorry, he\’s being sarcastic, isn\’t he? Typical Murphmeister. He only manages to describe the right solution in order to reject it.

Well, yes George. Rather depends upon who you think is the ruling class though

Secession from the concerns and norms of the rest of society characterises any well established elite. Our own ruling caste, schooled separately, brought up to believe in justifying fairytales, lives in a world of its own, from which it can project power without understanding or even noticing the consequences. A removal from the life of the rest of the nation is no barrier to the desire to dominate it. In fact, it appears to be associated with a powerful sense of entitlement.


A goodly
portion of the country would identify Guardianistas as our ruling elite.

That long march through the institutions has bourne fruit. All the major NGOs, the charities, the various \”institutions\” of society, the Royal Society for example, are run by largely the same class with the same ideas and the same plan for society. This is often called the \”metropolitican elite\” and it\’s a grouping that enrages large swathes of the country.

Whether our ruling class is out of touch does rather depend upon who you consider to be our ruling class.

Tax is a matter of the law, isn\’t it?

The company, whose chief executive Terry Smith is one of the City’s most outspoken figures, is deferring bonuses for just over 20 staff so that any income over £150,000 is taxed at 45pc rather than the current 50pc rate.

Tullett also signalled it would have no truck with any government interference over the move, hinting it did not expect any re-runs of the furore over bankers’ bonuses or the UK tax paid by the likes of Amazon and Starbucks.

“The company believes that taxation should be a matter of law not moral suasion and/or public persecution,”

Changing your behaviour as a result of changes in hte tax law is not tax abuse. It is obeying the tax laws.

Requiem for the Brown years

UK public spending was 36.6% of gdp in 2000, and had edged up over 50% by 2009 and 2010 and now is still in the range of 49% or so. Most of the run-up came over the bubbly years of 2000-2006. Let’s start by calling that an unsustainable mistake. I would say that, looking back, they didn’t get very much for this spending boost, did they? That’s fact #1 that should start off any analysis of British fiscal policy looking forward.

Quite.

On this gay marriage thing: define what sex is

I\’m getting the impression that our Lords and Masters have got themselves confused again.

Things are interconnected you see? Bit like that Blairite abolition of the position of Lord Chancellor. Suddenly vast parts of the law just didn\’t work, for the system developed over the centuries assuming that there would always be a Lord Chancellor. So by the afternoon of abolishing the position of Lord Chancellor they had to reinvent it.

And it seems that gay marriage is running into the same sorts of problems. Not whether it\’s a good idea or not (my views have been known for some time. One form of civil marriage for any two consenting adults and what religions do after that is up to them) but that it\’s all interconnected.

What, for example, is consummation of a marriage? There is an important difference here: a non-consummated marriage can be annulled. A consumated one (yes, more often in the breach but still) cannot, can only be divorced. Although I admit, I don\’t know whether that\’s a religious distinction only or a legal one as well.

And what is adultery?

Sure, we all know what we mean here. But this is the law. These things must be defined. And how do we do that?

We might, among men, say that bringing to ejaculation is adultery. But is it? I actually don\’t know: is a heterosexual hand job adultery? Looking sat it from the other definitions of sex we have, say the rape laws, it\’s not \”sex sex\” is it? For which we need penetration of one of three orifices.

I\’ve no idea what the answers are or even should be. Could be even. But it is all a bit more complicated than it at first seems, isn\’t it?

War on Want drools its idiocy onto the page

War on Want understands hunger, like all forms of poverty, to be the result of political decisions that are taken by national and international elites, and contested through political action.

Yup, poverty is something that is caused. Rather than it being not-poverty that is something that is caused by human action. Entire drooling idiocy of course.

The default state is indeed that scrub peasantry, that half an acre of maize to feed the family for the year. It\’s everything else that has been made, created, and which has pulled half the world up out of that state.

Meaning, of course, that if you wanted to pull the other half of the world up and out then you\’d copy what pulled the first half out.

This is a gross misrepresentation, seeing that the governments of the G8 have openly committed themselves to expanding the corporate-dominated food system that condemns hundreds of millions to hunger.

It\’s that corporate dominated food system that feeds half the world so much that we all pop from diabetes. It doesn\’t do this by nicking the food from the other half. It does it by making farming more efficient, more productive. Not least by stopping 50% of the food rotting between field and fork.

If we want to bring plentiful food to the starving we therefore want to expand exactly that corporate dominated food system. To deny this is to be despicably racist. Why isn\’t what feeds us pinkish people suitable for those of a darker hue? Why are we allowed to escape peasantry but not them?

And why in fuck are rich whities campaigning to keep the nigger down?

What is this Guardian love for peasantry?

In a leader:

The peasant, declared dead only a year or two back, has been miraculously revived.

I really don\’t get it at all. What is this fascination with the peasant lifestyle? This desire to trap hundreds of millions in it for evermore?

We\’ve all escaped it and we\’re all damn glad we have. So why this delight that Mbutu and his sons are going to have to do it for untold generations into the future?

Is it pining for the Ukrainians? If there aren\’t any peasants to starve then it won\’t be possible to starve peasants in building the Brave New World?

People who devise government scheme meet scheme devised by government

It is of course the greens and environmentalists who have been screaming that the government must take action on fuel poverty. Something Must Be Done!

And now something is being done:

Even the companies involved in the green deal find it hard to explain how it will work. Here are some of the hoops needed to be jumped: to enter the scheme, you need a green-deal assessor who works for a green-deal adviser organisation to undertake a green-deal assessment of your house, which will result in a green-deal advisory report. This will be lodged with a green-deal provider who will devise a green-deal plan. The work will then be undertaken by a green-deal installer to standards overseen by the new green-deal oversight body.

Welcome to the world of government designed \”solutions\”.

It really would have been easier and more sensible just to stick on hte carbon tax and let people figure out their own solutions.

No, really.

 

No, Apple isn\’t avoiding tax in the UK

Sigh.

Apple is estimated to have avoided more than £550m in tax in Britain in 2011. Its latest accounts show UK turnover at just over £1bn and profit at £81.3m, generating a tax bill of £14.4m.

However, analysis of its filings in America suggest a more realistic figure for UK turnover is £6.7bn. This would imply an estimated profit of £2.2bn and, at the then corporation tax rate of 26pc, a £570m tax bill, the Sunday Times reports.

Yes, yes, we all know the difference between tax avoidance and tax evasion. But this isn\’t even tax avoidance.

Corporation tax, when selling into any of the EU 27, is due at that one brass plate that is the corporate HW within the EU 27. Selling from Ireland, or Luxembourg, into the UK, is simply not tax avoidance. It is what the system was set up to encourage people to do.

Even HMRC insists that this is not tax avoidance. Why is this so difficult for people to understand?

Well, quite

Speaking at the World Economic Forum in Davos, Mr Otty told The Daily Telegraph: “The only way you can resolve this issue is through a legal code. I don’t see how you can have any assessment on payments of tax other than what is in the statute. The simplest solution is to stop banging on about morality and change the law. ”

In a country enjoying the rule of law what else could possibly be the solution?