This is most fun

It looks like the EU will deliver their verdict on the UK today. It is that we are unable to decide. And because we can’t they’ll give us the time we need to go away and make up our minds.

It’s damning. What they can see is what we know: that we have a political class bereft of ability that is unable to think logically about an issue. Worse, tribalism matters so much that it’s not just compromise that is impossible for them; they are also beyond considering the national interest.

OK. So, the solution?

But most of all I wish for the essential reform that will permit real change in our society, which is electoral reform. We cannot suffer the incapacity that these parties have created for much longer. And that requires fundamental change.

So, we move to a system where the will of the people really is both expressed and enacted? A referendory (referendatory?) democracy perhaps, like Switzerland? Meaning that we’d already be out of the EU?

Not quite as amusing as thought

Nowhere was this truer than in the comment of Viscount Ridley. He is supposedly a scientist. He has made much economic comment from a far right perspective. He writes columns for right wing newspapers on that issue., He is, of course, anti-green. And he saw the attempt to pass the Cooper / Letwin Bill in a day as ‘tyranny’.

Faisal Islam called him out. As I well recall, he was also chair of Northern Rock when it crashed (you could not make this up)

Never was there better evidence that some think there should be one rule for them and another for everyone else.

Except Matt Ridley was rather against that nationalisation. However the bill was passed. He’d been arguing that N Rock just needed liquidity support from the BoE. Which, given that the loan book has made a profit since then seems reasonable enough.

He made the case for abolishing the Lords most effectively.

No , that case would have been best made by Labour putting a retired accountant from Wandsworth into the House so that his expenses would be reasonable payment for his advising Labour.

What fun can be had with the Murphmeister

Ritchie spends a decade on corporate tax.

Trying to entirely dodge the UK tax system no longer works. There’s also all that political pressure to be paying more. The thing is, that deductibility of foreign taxes paid is still there. As far as Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is concerned now, it’s going to have to pay taxes somewhere. Might as well pay more to the UK for that bill is then a deductible against the American one.

Sure, this is all a bit long-winded, but it’s necessary to get to the point. Only when that background is understood can we consider the effects on investing in Big Tech of that movement toward higher taxation of those varied companies. Which is, that movement to gain more tax isn’t going to have much effect. We don’t really have to worry about what the rest of the world does, it’s all already taken care of in the revisions to the US tax code.

Trump’s changes mean that the foreign profits of US corporations are already taxed whatever. So, a rise in European taxation of such profits leaves the companies just the same – the deductibility of foreign taxes means little or no change in the total taxation bill.

Electing Donald Trump solves his problem.

Well done to Ritchie

Third, new concepts of value are, then, essential. In particular, the human value to innovate in the face of necessity is the real capital of society as we face this transition, but how to account for that is an almost unresolved question when the resulting intellectual property has to be shared for maximum impact, and not be restricted in use.

Ritchie intends to increase the quantity of bright ideas by reducing the value of bright ideas.

Well done there.

But there is a problem with this. It makes a balance sheet, and those who manage it, indifferent as to when a transaction take place, so long as the discount rate still makes it attractive in terms of contemplating it at all. So precisely when, for example, the transition to a sustainable economy takes place is not a matter of priority to this form of financial capitalism: if it pays eventually then provided the associated risks (and so discount rate) do not diminish its value to the point of insignificance then it remains attractive whenever it occurs. But as a society; as a race; and as businesses whose survival will also depend upon this transition happening by a point in time that indifference as to timing that financial capitalism implies is not just inappropriate but wholly conflicts with the requirement that this task be undertaken in little more than a decade.

As a result the indifference to time inherent in modern financial capitalism may be wholly inappropriate when considering the Green New Deal. But what that implies is that accounting will require a new concept of capital where the time that a transaction occurs does matter, very precisely. There can be no indifference as to progression towards a green transition in this type of reporting: that goal makes precise timing a matter of priority in itself.

The implication is very clear. First, such accounting makes clear that some assets that are now valued (e.g. oil related assets where the oil in question will have to be left in the ground) do no longer have value. It is simply not possible to presume asset life when there can be none.

Given the discount rate what is the value currently of those oil assets that we’ll not let anyone use in Year What?

He’s not even getting accounting right, is he?

Hope springs ever eternal

Let’s put this in context. Apparently, one in ten UK taxpayers has an offshore account.

I have always argued the scale of offshore abuse is significant. But this exceeds any estimate that I might have made.

The data has been advised by foreign governments. I suspect it is true.

Let me be clear: some will be accounts that are not in tax havens e.g. those held by those letting properties in France, for example. But all might involve evasion. And that is just as important as those that are tax haven based.

Well, yes, but we should all recall what happened over those Swiss accounts. Spudda and the like told us all that there were billions, billions I tell ‘ee, to be got from scouring the vaults of the Gnomes for tax evading accounts.

So much so that Osborne pencilled in those billions that he’d get from the agreement he made that the vaults be scoured.

As it turned out near all of the accounts were either of British citizens who weren’t resident for tax purposes, or were and were declared. Total receipts were not, you’ll be amazed to hear, those billions.

Then those Panama Papers. David Cameron had offshore! Which was all declared and tax paid. And the Liechtenstein Facility had one and only one named user. Lady Margaret, Dame Hodge, Spuddy’s fellow campaigner on tax evasion.

There just ain’t the money out there evading tax Ritchie says there is. On the very simple basis that as, by and large we don’t find ourselves oppressed by British law then we generally, being unoppressed, obey British law.

All of which would change if we changed British law to be oppressive of course.

This is rather Pooter, isn’t it?

Friday’s are teaching days for me this term. I like teaching. I like students. They seem to like me. Although that said, I am not sure that Friday’s, teaching and students always mix as well as they might. Students seem to have an MP’s attitude to Friday afternoons: they’d rather be somewhere else.

Is it the Friday or the teacher?

It’s a mess.

And what is astonishing is that after a week of debate it is effectively the same mess. We went nowhere.

What a way to run down a country.

If the government was a company it would be in administration.

If it was a local authority it would have been relieved of its responsibility.

And if a public agency its management would long ago have been sacked.

But a government can just blunder on. And without an effective opposition also able to hold its party together that’s what it will keep doing.

And so the rundown will continue.

This from the man who wants government to have more power….

Interesting research document

Using global directories of the firms as indication of presence in a location and the number of employees by jurisdiction as an indication of scale, our research indicates the disproportionate activity of particular GPSFs firms, namely the ‘Big Four’ accountancy firms, providing tax based services in secrecy jurisdictions. This suggests that they are major suppliers of offshore financial services.

You don’t say!

Slightly career limiting, don’t you think?

Devereux is wrong. His proposal is just another example of a neoliberal fantasist’s unicorn approach to policy making: suggesting an ideal that is great in an Oxford paper that has not the slightest shred of evidence that it could ever be of benefit to the world at large.

I would hope we had enough experience of the believers in unicorns to kick such ideas into touch by now.

Oh dear

It appears that no radio station has asked Ritchie to come on and discuss the Spring Statement:

This will not happen of course. He will talk about all he proposes. And never will a Chancellor have spoken so purposelessly. He has no clue whether anything he says will be delivered. Less still does he know if he will be Chancellor. Or even be in government.

As such I will, by and large, be treating the event with the contempt it deserves.

Collapsing from inherent contradictions

Corporation tax has three purposes. One is to protect the income tax base from attack. The second is to tax capital, which by and large it does, making it a rare tax as a result. And third, it is a tax that should be used to apportion taxable benefits to those locations where value is added in the global supply chains that benefit us all.

Corporation tax isn’t – solely at least – incident upon capital, that’s the very problem with it.

But OK, suppose it is. Thus the tax will be incident upon where the capital is, and so it should be, not upon where the value add is. For it’s the capital adding the value, that’s why the return is to the capital.


Kidde 7COC Carbon Monoxide Alarm (replaceable batteries) 10 Year Sensor and Warranty

Hmm, well, you know

But let’s be clear: if, as I think, at least 10% of the UK economy is unrecorded (and this is what all peer-reviewed evidence suggests) and much of this is identified by non-recording consumption, then this cannot be done by the wealthy alone. They are wealthy, but they could not fail to record so much of what they spend without the active connivance of hundreds of thousands and quite likely millions of others who are in receipt of that spending and who would not declare it to HMRC. More plausibly, the non-recorded spend and non-recorded income is spread right across the economy and anyone with eyes to see and ears to hear knows that to be true. The builder, cleaner, coach, and trader taking unrecorded cash are all part of this problem, as are countless others. They are not wealthy. Many, I know, may just be trying to make ends meet. But they all break the law. And they all contribute to the tax gap. And they all undermine a fair tax system, and honest taxpayers.

Unless Labour acknowledges this it will allocate resources to the wrong issues when seeking tax justice.

And it will not direct enough resources to HMRC to put matters right.

It will also not ask the right questions about how to correct the income distribution.

If all the first is true then your estimates of the income distribution are wrong, aren’t they?

As Ritchie insists, people don’t move for tax rates

The cat-and-mouse game between state tax collectors and wealthy New Yorkers who are moving to Florida has reached new levels — and gone high tech.

New federal tax laws limiting the deduction of state and local income taxes have created incentives for wealthy New Yorkers to move to Florida or other lower-tax states. New York Gov. Andrew Cuomo last month blamed wealth flight for the state’s $2.3 billion revenue shortfall in December and January.

“Tax the rich, tax the rich, tax the rich,” he said. “We did. Now, God forbid, the rich leave.”

There really is a Laffer Curve…..

So, who are you going to believe?


There is excellent, and wholly rational reason for not investing in oil now. It is that the worth of any company is dependent upon its future revenues. And these companies are as a result valued upon the basis of their supposed reserves. But the fact is that those reserves are going to have to stay in the ground if there is any hope at all that the world can survive climate change.

Norway is selling out of oil because it knows it has no future.

Or me?

Norway’s sovereign wealth fund – the Government Pension Fund – has just announced that it’s to sell off its stock in the gas and oil exploration sector. This makes very good sense indeed – so much so that they should never have invested in the sector in the first place. No, this is nothing to do with the climate crisis, nothing to do with stranded assets and all that malarkey. It’s just the simple and basic rules for investing – you diversify.

Well, that tells us then

Is some, and maybe a large part, of that fall in life expectancy due to austerity then? I very strongly suggest that it is.

And much of the rest may be down to the lifestyle promoted by neoliberalism, with excessive consumption of inappropriate foods at the heart of that.

My conclusion: neoliberalism kills.

Neoliberalism promotes that extra pizza apparently. Is there nothing that can’t be blamed upon it?

And he calls himself an economist

But, second, and much more importantly, they are not admitting this because very large numbers of jobs will be threatened by scrapping tariffs. The fact is that whilst we might have free trade with the EU we do not with many other nations on earth for very good reason. The tariffs we impose protect UK jobs. Remove the tariffs and those jobs disappear. The biggest gainer will be China, of course.

The government is, unsurprisingly reluctant to admit that this is what free trade means.

As every economist knows trade as no effect upon the number of jobs at all.

It’s entirely monetary and fiscal policy which does – the state of aggregate demand that is.

Trade affects which jobs, not the number of them.

This man teaches economics at a British university. Lucky us.