The IFS is biased.

No, really, it is, our favourite retired accountant, Richard Murphy tells us it is.

The essential story. The Mirrlees Review from the IFS is running through what might make a good tax system for our time. OK, a bit wonkish but then some of us like such things.

Ritchie Babbie has been reading some things from that review and has found things he doesn\’t like. Thus his conclusion that the IFS itself must be biased.

I think the IFS has a bias towards the neoliberal view that suggests that labour should be heavily taxed whilst capital is left virtually tax free. It is one to which successive UK governments have subscribed. As another of the reports (pdf) published by the review says "Whether this move to the right [in taxation attitudes] will persist and to what extent it is now a fact of political life is hard to say." It seems to me that either the IFS wants to make sure it does or that the whole report is just an indication of a lack of political will on the part of the UK to cooperate internationally to ensure capital is taxed.

Whatever the motive, the IFS\’s claim to be unbiased appears to me shaky. Some of its proposals are very dangerous indeed and about as far removed from the characteristics of a good tax system for any open developed economy in the 21st century as it is possible to be.

There\’s only one slight problem.

Just one.

Ritchie hasn\’t been reading the output of the Review. He\’s been reading the input into it.

So, we\’re going to do a review of the tax system are we? Excellent, let\’s go and find some Frank Field like people to think the unthinkable shall we? In fact, we\’ll invite submissions from anyone at all as well as those we invite. Who knows, maybe there are some good ideas out there?

Sure, we\’ll attract some nutters, sure, there\’ll be loads of suggestions that we won\’t in fact recommend. But, let\’s say, we\’ll take submissions until the end of August? Yes? We\’ll throw the submissions up on the web as well, so that people can see who is grinding what axes.

Great, after that we \’ll sit and ponder (for after all, we are the IFS and we are impartial) and then draft and write up our conclusions. Get them out around the end of 2008?

And of course, just like happened to Frank Field, there will be those more partisan and off the wall suggestions which we\’ll ignore.

Ahem.

IMPORTANT: Please note that the research described in this Release is a submission to the Mirrlees Review and that the conclusions reached will not necessarily be adopted in the final report. We are publishing a number of such submissions over the coming weeks and the review team would welcome feedback to [email protected]

I suppose we are taking some risk with this: there might be some idiot out there who thinks that the submissions, the evidence and opinions being offered are in fact our own considered opinions.

Naah, no one would be that dumb would they?

2 thoughts on “The IFS is biased.”

  1. sorry folks but they guty is not very intelligent. I have to replay this surreal exchange of emails between the master of the sanctimonious, dismissive put-down and me:

    Yo can own an asset e.g a house and have a 100% mortgage on it = no net wealth

    Assets are not the same as wealth

    Richard

    2008/8/15 Gance fan

    Richard

    I’m afraid I still don’t see the distinction. For example, I own some assets: a house (albeit with a mortage attached), a car, some investments. To me, this is my wealth. Perhaps other things might also be included in my wealth – such as my family, my state of health, etc but these don’t have an economic value. What part of my wealth have I missed out, according to the way you define the term?

    Regards

    Graeme

    —– Original Message —– From: “Tax Research UK”
    To:
    Sent: Friday, August 15, 2008 9:04 PM
    Subject: [Tax Research UK] New Comment On: Is this an IFS joke?

    There is a new comment on the post “Is this an IFS joke?”.
    http://www.taxresearch.org.uk/Blog/2008/08/14/is-this-an-ifs-joke/

    Author: Tax Research LLP
    Comment:
    Graeme

    Assets are particular

    Wealth is a total

    I do see a difference, and a very real one

    Richard

  2. When reading Murphy’s words, I find a powerful aid to deciding whether to take him seriously is to remind myself that this is a man who does not believe in tax incidence.

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