Sigh

In that case what this report is arguing is that closing the tax gap would be a better
way of reducing the deficit than a programme of austerity.

Closing the tax gap is fucking austerity. Jeebus friggin’ C.

You’re still reducing the amount of expansionary borrowing that’s going on. This is fiscal austerity.

10 comments on “Sigh

  1. Tax research UK llp is having a good year. The usual 35K from JRCT, we know to recalculate the tax gap he wanted 40K. Bung in his accounts practice, a few reports for charities and fees to FTM and books, a nice little earner. Should easily bypass last year’s 75K.

  2. Murphy’s understanding of economics appears to be even poorer that that of Alex Salmond, another notorious ex-economist.

  3. Isn’t the spending “expansionary” whether you do it on credit or by increasing taxes? (That increasing taxes being what the Murph really means by “closing the tax gap” – reducing expenditure never comes in to it, because that would be “austerity”.)

  4. hey, I’m with Richie on this one! don’t often say that.

    I think it’s best to reserve the word austerity for cutting the expenditure side, not tax increases. And definitely never to use the word austerity as a synonym for the deficit. That way you distinguish between policy instruments (cuts, tax increases) and outcomes (deficit)

  5. Genuine question for our host. What is the effect on business and personal lending of the gubmint going around hoovering up all the available credit? Is the gubmint hoovering up all the available credit even remotely “good for the ekonomi”, under Keynesian bad-times stuff?

  6. @Luis Enrique

    You can achieve fiscal contraction both by cutting expenditure and by raising taxes, and they each result in austerity in the original sense of the word, albeit for different groups of people (i.e. for recipients and users of government spending in the first case, for taxpayers in the second).

    The problem with the word “austerity” is that it is politically loaded – there are very few people who would describe austerity *in itself* as a good thing – and this makes it less useful as a descriptive term, where it is indeed useful to regulate the ways in which the word is used. I would see the word more as a shibboleth of the left – “If you are one of us, you will attack austerity regardless of what that means.” There are of course words which fulfil similar functions for pretty much every political position (“capitalism”, “health & safety gone mad”).

  7. It’s a ridiculous word to use for profligate spending, but it’s the word that’s used. If you restrict it to cutting expenditure you increase the tendentious nature of the term. It might be better to emphasise its neutrality.

  8. Andreas do you have a cite for your claim that the original sense of austerity is fiscal contraction? (and did you really just explain to me that both spending cuts and tax increases are fiscal contraction?). I claim that when people say austerity they mean spending cuts not tax increases. For example if tax revenues rose £100m and spending increased £50m that would be fiscal tightening but nobody would be complaining about austerity under a spending increase.

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