@richardjmurphy *Still* doesn\’t friggin\’ get tax incidence

The man is irredeemably ignorant.

We all know that higher business taxes feed through to a combination of prices, dividends, pensions, profits…and for an open economy like the UK, wages in particular.

Higher taxes on profits reduce the return to investment, leading to lower levels of investment. And a lower level of investment undermines productivity which ultimately feeds through to lower wages.

Right, so that\’s David Gauke, Exchequer Secretary. A man well up there with the standard economics of corporate taxation.

For that is the standard economics of corporate taxation. Harberger\’s paper of 1962 (over 800 citations, pretty good for an economics paper) through to a nice little empirical paper showing the actual effects through state corporate income taxes in the US from 2009.

The more open the economy the more the incidence of the corporation tax is upon labour. This isn\’t one of those arguable contentions (\”The State should run the health service!\”. \”No, it shouldn\’t!\”). This is simply a plain observable fact about the universe that we inhabit.

Ritchie\’s reaction?

There’s no other way to describe this but complete and utter nonsense.

Oh, right, half a century\’s worth of work by the collected economists of the world: complete and utter nonsense. The retired acountant from Wandsworth knows better. How is this we ask ourselves?

Gauke like me believes there is tax incidence – corporation tax is paid by someone else than a company at the end of the day.

OK, good, this is an advance from a few years ago when Ritchie absolutely denied such a thing could possibly happen. We advance then.

He however hides behind the convenient claims of the Oxford Centre for Business Taxation that the charge falls on labour (an argument contrived on the basis of exceptionally dubious and bluntly biased analysis that only looked at the consequence of corporation tax increases and not decreases – which is what Gauke is delivering).

But he\’s not hiding behind those specific claims. The paper by Mike Deveraux (who Ritchie hates and this might explain some of all this) is simply one empirical paper which tries to measure the exact effect, in the UK, of what everyone does agree happens: the more open the economy the more labour bears the burden. So, given how open the UK is, how much of the burden does labour bear?

I repeat again, this is all absolutely standard economics. It no more depends on the Oxford Centre for Business Taxation than does what I\’m going to have for dinner.

The reality is as I say – that tax cuts deliver wealth to shareholders and no one else.

No Richard, it isn\’t. And it doesn\’t matter how many times you say it it still won\’t be true. Not in an open economy it won\’t be. It is true in a closed economy. It is not true in an open one. And Murphisms do not change this objective reality. No, really, not even stamping your tiny little feet in anger changes this fact about our world.

Not once, not ever, has a manager turned round and said “we’ve had a corporate tax cut – have a pay rise”.

No one has ever said that managers do do that.

Nor, candidly, have they ever turned round and said “we’ve had a tax cut – let’s invest more” – indeed the evidence is that higher taxes encourage investment and lower ones don’t.

No you ignorant little cretin! Will you please, just for once, listen to someone explaining the situation to you? I\’ve been doing this trying to teach you tax incidence for some years now and you still, still, cannot seem to get it.

There is a global, risk adjusted, average return to capital.

Taxes on returns to capital in one jurisdiction will bring the risk adjusted return to capital below this global average in that jurisdiction.

Capitalists investing are of course looking for higher than that risk adjusted average, if they can get it, but they\’re certainly averse to investing to get lower than it. Thus, when taxation on returns to capital in one jurisdiction lowers the return below the global average, those inside the jurisdiction will invest outside it, those outside it will not invest inside it.

This reduces the amount of capital invested in the jurisdiction.

Average wages in an economy (which we\’ll equate with the tax jurisdiction here) are determined by average labour productivity in an economy (yes, this is true, from Paul Krugman).

Average labour productivity is, while not entirely determined by, certainly heavily influenced by the amount of capital that is added to that labour.

So, less capital being invested in our jurisdiction as a result of higher taxation on the returns to capital, leads to lower wages in that tax jurisdiction.

It is sod all to do with managers handing out pay rises as a result of lower corporate taxes. It is entirely to do with the mobility of capital.

And yes, this does mean that the more open the economy is the more of the incidence, the burden, of corporate profit taxation falls on the workers in the form of lower wages.

This is straight, plain, economic orthodoxy. It is not classical, neo-classical, Keynesian, New Classical, neo-liberal nor even social democratic. It\’s simply a fact about our world in the same way that apples generally fall downwards out of trees, not upwards.

The reality is as I say

No, it isn\’t. You are simply wrong.

the evidence is that higher taxes encourage investment and lower ones don’t.

Not when people have a choice of where to invest their money they don\’t.

111 thoughts on “@richardjmurphy *Still* doesn\’t friggin\’ get tax incidence”

  1. Worstall
    Show me the proof. Reciting out of text books is fine and dandy and proves you can read but it doesn’t explain the reality, only theory.

    You can shout cretin all you like but it makes you look like the spoilt brat that you obviously are.

    Outclassed and out of date.

  2. In fact, reading it again you seem to be explaining some sort of pure example. The reality is that corps aren’t behaving in a text book manner. They’re fleecing profit at the expense of investment and and workers. They are doing this through mechanisms that Murphy understands very well and that you deny exist as a distortion for your model.

    It doesn’t explain the utter failure of the ‘tiger’ models against the more mature, higher tax ones.

    It’s just fancy, preening bollocks.

  3. Tim,

    Your post is excellent and well argued. This argument is one that needs to be more widely known. It could lead to more sensible tax policy.

    I heard Gauke give the speech yesterday at the Centre For Business Taxation’s Summer conference.

    I was slightly surprised – and encouraged – to hear Gauke talk about these issues. Although I did note that he tended to use words like “economists tells us” and “we are told”- presumably to avoid the possibility of bad headlines.

    As I understand things – and I’m an accountant / tax adviser rather than an economist. The points you make are not at all controversial within the field of economics. Its not Deveraux who is holding the fringe position its Richard Murphy.

    My one suggestion? Murphy is misguided, and very, very wrong on this – but your argument would be better made if you avoided the personal abuse!

  4. But Ritchie doesn’t want an open economy; he wants a closed one where central palnning and tractor statistics are the order of the day.

  5. Worstall
    Show me the proof.

    Arnald, I think you miss the point.

    Tim may well be wrong, but seeing as he has 800 economists backing him up and Richie has none, I think the burden of proof is with the Worstall.

    I would love to know the mechanism by which higher taxes lead to higher investment and higher wages. Do please enlighten us.

    Tim adds: “I would love to know the mechanism by which higher taxes lead to higher investment and higher wages. Do please enlighten us.”

    Oh, that’s easy. Let’s say you have a high tax on corporate profits paid out as dividends. And a low tax on corporate profits reinvested in hte same company that made them. And light capital gains taxation.

    Thus, less corporate profit would be paid out in dividends, more would be reinvested and the shareholders would take their profits in capital appreciation.

    That’s what he means, anyway.

    The bit he misses is that: low corporation tax on reinvested profits is a tax break. Meaning that people are investing according to low tax rates. Which makes a mockery of the rest of what he’s saying.

    Plus, of course, the problem with this model is that we don’t in fact want companies investing (or not necesarily) in what they already do. We’d rather like investors to invest in new businesses: which means that they need to be able to get their profits out of the ones they’ve previously invested in.

  6. “a nice little empirical paper showing the actual effects through state corporate income taxes in the US from 2009.”

    Arnald: “Show me the proof”

  7. Arnald is not Ritchie: Ritchie doesn’t use full stops. Ritchie is not clever enough to disguise himself.

    Arnald, that article by Shaxon is ridiculous. He claims that if corporation tax was cut, people would keep their income in companies and pay corporation tax on it instead of income tax. But this is nonsense.

    A person cannot spend money without taking it as income or a dividend. At that point, they pay income tax or dividend tax on it. If they keep it in the company, they cannot spend it on personal consumption. There are very limited things a company can buy for you out of pretax income: in general, if the company buys something that is not for your work, income tax is due on it.

    Shaxon’s argument is one for keeping dividend tax equal to income tax (i.e. abolish dividend tax and treat dividends as income). It is not one against abolishing corporation tax. The man is an idiot.

  8. Arnald,

    This is not good. I went to the treasure Island link as you recommended, and onto his links as you also recommended. And there it was: “capital bears the majority of the corporate tax burden.” Brilliant. Evidence based and everything.

    Then I rest the rest of the paragraph: it reads “Adjusting the estimates from the studies to reflect central empirical estimates of key elasticities suggests that capital bears the majority of the corporate tax burden. This paper details drawbacks to the use of these models, such as their focus on the long-run when the adjustment from the short-run could be very long.” (1)

    When you quote this stuff Arnald, do you read it yourself? The actual report says *the opposite* of what Treasure island says it says. You have been missold mate.

    Then I thought “maybee its a one-off”. So I clicked on his next link. So when the treasure island quote says “But the extent to which the financial burden of the tax ultimately falls on the owners of corporations, owners of all capital assets, or workers is unclear.”

    But the full quote actually says “But the extent to which the financial burden of the tax ultimately falls on the owners of corporations, owners of all capital assets, or workers is unclear. The United States is an open economy, in which many firms engage in international trade. Because labor tends to be less mobile than capital in open economies, some of the corporate income tax burden might be passed back to workers through reductions in their compensation over a number of years—making an increase in corporate tax rates somewhat less progressive.” (2)

    Arnald this treasure island guy is deliberately taking quotes out of context to reach conclusions the author did not intend. You have been thuroughly misled. The sources he cites backs up TW, not RM. You can imagine why I stopped checking this guy after two blatant, howling mis-representations like that.

    He has looked at research which *proves* that increasing Corporate Tax could be “somewhat less progressive” and still advocates it. Has he no compassion? Why is he deliberately trying to hurt the poor like this, and why are you supporting him? I hope this isn’t what you meant when you talked of evidence? And BTW “The truth is what I say” doesn’t count as a rebuttal.

    (1) http://www.cbo.gov/ftpdocs/115xx/doc11519/05-2010-Working_Paper-Corp_Tax_Incidence-Review_of_Gen_Eq_Estimates.pdf

    (2) http://www.cbo.gov/ftpdocs/120xx/doc12085/03-10-ReducingTheDeficit.pdf

  9. Hugo

    It’s an article arguing against the unquantified belief (like a religion, as seen by Worstall’s faith in ideologues like Hines) that the ‘incidence’ of corp tax always burdens the worker.

    The proof of the oft cited piece above lies in an abstract study, as they say they sidestep the complication:

    “Wages are functions of local conditions and worker characteristics that may be unobserved by the analyst and, much worse, correlated with local tax rates, creating the prospect of attributing effects to taxation that properly belong to the local conditions that are correlated with taxation.”

    If you then couple this reverence to non-facts with the belief in inter jurisdiction tax competition, you get a whole pus-filled boil of widening gaps in privilege and wealth.

    Do you know what happens then?

  10. It’s very odd having an argument when your opponent refuses to accept the facts. I remember having a particularly frustrating argument trying to convince someone that the zero on a roulette wheel was the only number that skewed the odds in the houses favour and yet the zero was potentially a bad number for the house.

  11. Gary

    I did read it and it shows that there is no empirical concensus when studying the incidence of corp tax, only a repeat that in an open market it MIGHT create a bigger burden on labour because of mobility.

    Surely it doesn’t HAVE to?

    To base an economy on such faith is misguided, no? Has it worked? Where?

  12. Kevin Monk
    Facts based on an ideological belief that making a few rich people disproportionally richer whilst restricting the opportunities of the majority should not be recognisable.

    It isn’t working, it will never work.

  13. Facts are based upon facts – nothing more.

    Socialist carbon has 6 protons the same as libertarian, conservative and communist carbon – although I’m not sure how ‘fair’ that is or if we should long for a world where it has 7.

    “Everyone is entitled to their own opinion, but not their own facts.” – someone or other

  14. It’s bizarre isn’t it Arnald?

    These simpletons arguing for having less money stolen and then pissed away by people who couldn’t give a shit?

    Why can’t they just open their eyes and see that government makes everything better? Why don’t they realise that the parasite class know best? (Obviously we’ll have to ignore thousands of years worth of evidence to the contrary, but hey, it’s for the greater good. And for the workers of course).

    I think you’re doing a grand job in your fight against the pure evil that is capitalism (and, by extension, freedom). Keep hammering the message home comrade, even if you only convert one sinner it’ll be worth it.

  15. Facts based on an ideological belief that making a few rich people disproportionally richer whilst restricting the opportunities of the majority should not be recognisable.

    This here illustrates the basic problem with trying to discuss such issues with a progressivist mind. They take it as a basic axiom of reality that only those things which they perceive to produce their preferred ideological outcome can be accepted as facts; i.e. admitted to their model of reality. They start from a moral basis, will not deviate from it, nor consider any subject independently of this moral position.

    To use an example; suppose you were trying to have a discussion on the economics of slavery; that is, whether slavery is more or less economically efficient than free market employment. Now the answer may be yes, or may be no. It’s an economic discussion.

    But the proggie cannot have that discussion because slavery is morally reprehensible; so the answer “yes” is simply off the table. It cannot be true because it should not be true for moral reasons. In other words, for the Proggie, in a kind of negative space of Hume, the is is defined by the ought.

    Arnald and Ritchie cannot admit into their reality even the possibility that that which they find morally reprehensible may be true. It simply isn’t possible in the Proggie model of reality.

  16. [email protected],

    That’s nearly what they say. But not quite. The difference matters.

    They do say that there is no empirical concensus when studying the incidence of corp tax i.e. no consensus on the *exact* proportions. But there absolutely *is* consensus that an open economy *does*create a bigger burden on labour because of mobility. So it *does* HAVE to.

    As you say, it will not be 100%, because a pure open economy is an economist’s fantasy. But in the real word, right now, your own sources via treasure island is that labour takes c.40% of the burden, and “some of the corporate income tax burden might be passed back to workers through reductions in their compensation over a number of years”

    So your own sources contradict RM. Who do you believe Arnald?

  17. Gary
    The ITEP paper is interesting.

    Ian B
    But isn’t that the whole point? Why create a reality on something that is morally reprehensible. It makes no sense.

    Slavery should not exist full stop, so why say that it’s more efficient? It can’t be in the long run anyway, but then as always with that line of argument, there is no long termism, no understanding of humanity.

    No, I’m Spartacus.

  18. Facts based on an ideological belief that making a few rich people disproportionally richer whilst restricting the opportunities of the majority should not be recognisable.

    Well, at least that’s out in the open now – any (objective) facts contradicting the a priori accepted ideology are deemed not to be facts, so can be ignored. Simples!

    Thus all facts necessarily prove any contention, since there can necessarily be no contradicting facts, provided that the contender is of the “correct” ideological persuasion. Marvellous!

  19. “But isn’t that the whole point? Why create a reality on something that is morally reprehensible. It makes no sense.”

    No, that’s not the point. The point is first we study reality, then we make decisions on whether there is something in that reality that we find morally reprenshible. In those cases we try to change, but we try to change it keeping reality in mind, not based purely on good intentions and warm fuzzy feelings…

    So therefore if reality tells us that the impact of a suggested change is not what we wanted to achieve then we must find another way, one that actually works, to get to that target

  20. My lord, why am I engaging:

    Slavery should not exist full stop, so why say that it’s more efficient? It can’t be in the long run anyway, but then as always with that line of argument, there is no long termism, no understanding of humanity

    Because whether it should (subjective choice) exist or not is irrelevant to the objective analysis of whether it is more efficient or not! Cold, hard, scientific analysis – for its own sake. That’s all it is. Doing the calculations adds to the sum of human understanding. It is orthogonal to the moral choice that we have accepted that slavery is wrong. Plenty of people, past and present, don’t accept that slavery is wrong – Romans, Ancient Egyptions, the (Southern) Democratic Party, Nazi Germany, the USSR, various modern Arab states, etc.

    There’s plenty of things that should not exist (Communism, Nazism) but that should not stop people studying and analysing them.

  21. Kevin Monk, a market in human organs is an excellent idea. I am not being sarcastic. It would prevent a great many deaths. Look it up – lots of people have written on the subject.

    Tim adds: Umm, me. In The Times. In 2006 or summat.

  22. Arnald, I want you to do a little thought experiment. Indulge me.

    Imagine you are an evil capitalist. You own outright a profitable business (say making high value engineering parts for planes – yes this is still done in the UK). You employ 50 people, you pay yourself £100K/year, the business has a healthy chunk of retained profits in it. You’re sitting pretty.

    Now the chance comes up to expand your business. Big contract is there for the taking. Will double your turnover and profit. All you need to do is invest your retained profits in new machinery and take on another 20-30 staff.

    What do you think would be the effect of a large rise in corporation tax on said business opportunity? Would you be more likely to invest your capital or less, if you were going to get less back after tax?

    Or would you think ‘I know, I’ll take my money out of the UK business, and invest it in a new factory in Poland, where the labour is cheaper, and they charge me much less corporation tax to boot’, thus depriving 20 or 30 people from well paid jobs in the UK (possibly the other 50 employees as well if it all went well) , and the Exchequer from a substantial chunk of income taxes, VAT, NI, and corporation tax?

  23. Hi Hugo,

    It does indeed sound like a sensible idea. I was just trying to highlight something that should be analysed first and then we can make decisions about whether that thing is morally right or wrong.

    We’re in agreement.

  24. “The IETP paper is interesting”.

    What?!!! Is that it?!! You set an ‘evidence’ agenda and this is what you reply with?!!!

    Ritchie: “The reality is as I say – that tax cuts deliver wealth to shareholders and no one else”

    Your sources/treasure island: “some of the corporate income tax burden might be passed back to workers through reductions in their compensation over a number of years”

    Either your sources are right (and so you agree with TW) or Ritchie is (and you reject the evidence-based approach you claim to value). The positions contradict. Which is it?

  25. Facts based on an ideological belief that making a few rich people disproportionally richer whilst restricting the opportunities of the majority should not be recognisable.

    Oh, this might be Murphy.

    The other day, I asked Murphy to supply evidence for a couple of his claims – “please cite,” I said.

    Murphy replied, “Citation is designed to ensure all contrary opinion is excluded”.

  26. Arnald is not Murph.

    When Arnald asks “Why create a reality on something that is morally reprehensible?” He is sharing with us that he is reading either:

    1) Happy clapper positive thinking ‘The Secret’ about ‘create your own reality’; or

    2) ‘Deep’ 6th grade sociology that told him that reality is a social construct.

    Murph definately doesn’t have either of those backgrounds.

    Arnald – if it’s #1, read Michael Neil. If it’s option 2, read your book again. It says that *culture* is a social construct, not *reality*.

  27. I may be able to shed some light on this.

    Tax boys look at the pre tax profit. Never the post tax profit. For that is a number formed from their dealings with the Devil to create the TAX CHARGE.

    All execs base their business decisions on the POST tax profit. You don’t want to be celebrating a billion pounds profit in the land of 101% taxation.

    Finally, much of Murphy’s bile arises from the fact that for his whole working career, he gave his clients and himself best tax advice. This of course, was much against his socialist principles of making up a tax number after lunch and ordering its payment at gunpoint.

    So give the guy a break, this is his catharsis of 40 years of giving correct but, in his eyes, illegal advice.

    And, like a good socialist, he never charged a bean for his advice.

    Oh, wait…

  28. No, I’m afraid you’ve read it all wrong. Any empirical evidence that proves that within the socio-political landscape AS IT STANDS that the worker must take more burden is creating a false reality. I don’t think anyone is contending the distortion AS IT STANDS. It’s just the rhetoric that demands that anything other than slaving to the status quo causes x y z. After all these are artificial constructs, not natural absolutes.

    As Murphy says quite truly, all the argument is about “what happens if the corp tax is raised without thought” so predicating “it must be lowered” when there is a strong argument to suggest that lowering corp tax to the levels that big biz would deem “incentivising” would wreck any chance for an equitable society.

    It’s approaching the problem from a false premise: that because corp tax set to high can be deincentivising then all corp tax should be low. Nowhere, except in the minds of sociopaths, can it be argued that blindly lowering corp tax will improve society as a whole. It doesn’t, it makes the rich richer and the poor disenfranchised.

    Surely it would be better to create an artificial structure to impose a fair mitigation of the problems caused by an open economy?

    Or is that too difficult a proposition for a bent free market ideology?

  29. “Surely it would be better to create an artificial structure to impose a fair mitigation of the problems caused by an open economy?”

    Yes. One that works. Not the one that *should* work. Not the one you *want* to work.

  30. Arnald you are down to 2 possibilities:

    1) Ritchie: “The reality is as I say – that tax cuts deliver wealth to shareholders and no one else”

    2) Your sources/treasure island: “some of the corporate income tax burden might be passed back to workers through reductions in their compensation over a number of years”

    The positions contradict. Which is it?

  31. Gary, that’s utterly ridiculous.

    It’s only contradictory if you truly believe that tax cuts would benefit the worker.

    And, um, reality knows better, hmm?

  32. Arnald,
    I don’t know better. I’m not saying that that tax cuts would benefit the worker. The evidence *you* presented says that.
    Do you believe your own evidence? Or are you citing proven neo-liberal liars as evidence?

  33. “Arnald this treasure island guy is deliberately taking quotes out of context to reach conclusions the author did not intend.”

    Another Johann Hari sock puppet?

  34. The Pedant-General

    Arnald:

    “Any empirical evidence that proves that within the socio-political landscape AS IT STANDS that the worker must take more burden is creating a false reality. ”

    WTF???

    The empirical evidence does not create the reality. The reality “just is” – that’s what it means – and the empirical evidence is merely reporting what is actually happening on the ground.

    You may not like but that’s just too bad. The fact that you don’t like it very particularly does not allow you to describe it as false. People of your persuasion trying to ignore economics has done vastly more real damage – real actual mass slaughters of millions – that the economics ever has or could do.

    That’s the reality and you – thank the Lord – don’t get to alter it.

  35. Well again, this is the problem of the same word meaning entirely different things to different people. Evilrightwingextremists take the word “reality” to mean some kind of objective physical world which we can explore with our senses.

    In Arnald’s dictionary, it means something more like, “a revealed truth”. It’s a very religious thing- not surprising as the anglo-left are the ideological descendents of religious movements- but basically “reality” and “truth” are things you feel and know to be true, and discovering this revealed truth actually means rejecting empricism.

    Various left groups, particularly the post-marxist feminists, overtly declare this and reveal their truth by the same process, “consciousness raising”. If an empirical study disagrees with the revealed truth, it is the empirical study that you must reject.

  36. WTF is a false reality?

    I refute it thus!

    Arnald, take your keyboard and beat your head with it until you’re convinced that it isn’t a false reality.

  37. Thank you, Pedant General at 44, and thank you, Gary, throughout.

    I think, tentatively, Arnald is saying that in a better world he’d be right, and that therefore arguments based on evidence from the present, imperfect (“false”) reality are irrelevant.

    Only tentatively, mind.

    Even then, something like this is mind-blowing:

    “It’s only contradictory if you truly believe that tax cuts would benefit the worker,” which is what the source he introduced said.

    Contradiction isn’t about true belief, it’s about language and argument. Gary’s right about the contradiction, and you’re exposed as having neither logic, nor evidence, nor coherent argument. Game, set and match, I think. In this reality.

  38. Ian B, AM, PG,
    The whole empiricist/religeous thing is insightful and xplains why Arnald and I have been talking past each other.

    Arnald – I agree your point *should* be right. The world would be a simpler place for you to excersise you need for control if it was right. Its a shame that empirically its not right, but wish for your sake that it was right.

  39. No, you still can’t grasp it.

    The market is not a natural entity. It has been created and it is maintained through sets of artificial parameters. It is those parameters that are examined to form the empirical evidence. If the machinery of the market were altered then the economic theory would alter also. It isn’t a precise science after all, not like others.

    It’s fairly simple.

    Tim adds: Umm, no. “If the machinery of the market were altered then the economic theory would alter also.”

    This is not true. Theory would not change. The results of particular actions would change as a result of a different method of regulating or constructing the market, this is most certainly true. We even have a method of describing how different ways of regulating or constructing the market would change the outcomes of certain actions: “economic theory”.

    To take an example of something we’ve been talking about here. The incidence of corporation tax. Theory tells us that it an open economy, some/much of the incidence falls upon the workers. Said theory also tells us that in a closed economy it will fall upon capital. So, we can, if we so wish, change the incidence of the tax by changing the regulation and construction of the market. It’s economic theory which tells us how to do this too.

    And this is something I’ve pointed out several times here as well. If you really do want to make sure that capital bears the burden of corporate taxation you can do one of two things. You can restrict the movement of capital. Essentially, exchange controls again. And yes, you do have to go all the way, you do need to go back to the system where no one can take more than £25 quid out of the country without permission (with inflation, this is now some £80 or so).

    Or you could have global taxation of corporate profits. One rate everywhere.

    Either would work, economic theory, that unchangeable, tells us so.

    Oh, and good luck with getting the general populace to agree to either proposal.

  40. Gary
    No the evidence doesn’t say either way.

    The argument Gauke makes is that raising them COULD be detrimental, in fact he goes farther by saying something like “most people believe that/economists say that it WILL be detrimental”, without exploring what would happen if they were drastically reduced.

    The only evidence for drastically reduced corp tax lies in countries that have failed economies. And before you jump on the eurozone fiasco argument, it’s not the same is it?

    It’s not me being dogmatic here. All the wtfs are derived from blinkered vision. The economic argument is not a fixed reality, it shifts with time and management. The ideas that it is THE only reality are merely ideological.

  41. “The market is not a natural entity. It has been created and it is maintained through sets of artificial parameters. It is those parameters that are examined to form the empirical evidence. If the machinery of the market were altered then the economic theory would alter also. It isn’t a precise science after all, not like others.”

    So when the first caveman who was good at spear making swapped his spears for food that others had hunted, who had created that market? God? Our alien overlords?

    Or could it be a natural phenomenon that exists when human beings interact?

    PS you haven’t expanded your mind and done my little thought experiment yet either.

  42. After all, it is only a faith that the market can deliver efficiency and social progress.

    Being happy with a status quo that is clearly massively distorted towards a tiny percentage of the global population is an extremist belief. Like believing in Rand.

  43. Jim. Don’t be an idiot. That’s just rubbish and you know it. It isn’t a science. Rules and systems have to be in place. They are all made up by people who pretend to know, like you all seem to.

    Who said anything about a large rise in corp tax? No one has. That’s where this whole argument of yours fails. The argument is about the certainty that a drastic reduction would provide more jobs etc, when really it would only make shareholders and bosses richer.

    Try again.

  44. “The market is not a natural entity. It has been created and it is maintained through sets of artificial parameters. It is those parameters that are examined to form the empirical evidence. If the machinery of the market were altered then the economic theory would alter also. It isn’t a precise science after all, not like others.”

    I guess that’s computer science fucked then. It is to their immense credit that other posters have the patience to even engage with you at all given what a stupid little wanker you are.

  45. Chris meant that Computer Science works within an artificial environment yet remains a science.

    Having said that, the market is entirely natural even though the environment it operates in isn’t always.

    The reason economics isn’t yet a science is that some people dislike reality. As Feynman put it: “Go someplace else, some other universe that is more pleasing.”

    This has been amply demonstrated in this comment thread.

  46. Thanks Peter. Incredibly it seems – low though my opinion is of dickhead’s intellect – that even he would understand the point without it being spelled out. Clearly it is not possible to under estimate him.

  47. Arnald,
    “The market is not a natural entity”

    I think I might see now one of our key differences here.

    Structures and rules around a market are indeed not natural, and not fixed. They are indeed a social construct, and capable of being changed by us at any time of our choosing.

    The market itself though is not capable of that same amount of manipulation. That is because the market is fundamentally about people, and – much as this bit will annoy you to read- you are missing the bit about people here.

    So when you change the rules, people (i.e. the market) will react. If you raise the tax on fags and booze, people will smoke and drink less. That not really a ‘market’ as some minor deity, its just the collective actions of real people, which we collectively call a ‘market’. Similarly, when we raise the tax on profits, people will react. They will try to recoup their foregone profits by paying lower wages and investing less in capital. Its just the collective actions of real people, which we collectively call a ‘market’.

    You do not want people to react that way. I understand that. You wish you could compel them to react differently. I understand that too. The victory of righteous anger is all yours. But people *will* react in that way. They *do* react in that way. I do not *want* them to act that way. But they will, and – when they do – we will collectively call that a market reaction. But it’s just people acting in a similar fashion.

    And once we realise the predictability of people’s behaviour, we can think about different mechanisms that would create the outcomes we desire (and yes our desired outcomes are more similar than you might think). Those outcomes are probably some combination of encouraging growth, investment and jobs discouraging feckless consumption, reaping the benefits of growth and redirecting them through a welfare structure that avoids the Welfare Trap.

    We know how to do these things but, as ever, the left resists the practical steps to achieve it, and I am ever curious as to why.

  48. This is true. He really is quite the stupidest poster here I have seen here in years. It is telling that none of the other left wing contributors feel there is anything to be gained by defending him either. I am glad the guy doesn’t share or espouse my views. He would do damage to the credibility of any view point he chose to side with.

  49. Sigh
    Human interactions are so pure that they can be compared to computer programming?

    You can apply the same rules through all aspects of human society?

    You can discount any weighting caused by market influencers?

    You always call the outcome right, based on your vast knowledge of this reality?

    What’s the use of a science when everyone gets the outcome wrong so often?

    With the finance system as it is you can’t even call it an open market. There is very little transparency so disallowing a fair and open resource to assess risk, for a start.

    Anyhoo. The science isn’t working, clearly. If the science is natural and it creates a human reality that is destructive then surely intervention is necessary?

    Not say you. Leave it to the market.

    Are you all robots or something?

  50. [email protected],
    “No the evidence doesn’t say either way”

    Come on man. We have just been through this.

    They do say that there is no empirical concensus when studying the incidence of corp tax i.e. no consensus on the *exact* proportions. But there absolutely *is* consensus that an open economy *does*create a bigger burden on labour because of capital mobility.

    That’s what *your own evidence* says. Do you believe your own evidence?

  51. Gary
    I understand very well the micro argument of influencing human interactivity with the market.

    The argument is whether the ideology that supports using market theory as a global tool is delivering the outcome that the science says it should.

    I am saying the science is being corrupted on a massive scale by the rich and the corps, their argument being that it’s a natural extension of the science.

    Plainly the same caveman rules cannot be used within an environment designed by the corps for the corps and the rich.

    You seem able to miss the plain and observable facts that these structures coexist with human society. The argument goes that what’s good for the megacorp is good for humanity.

    Is that happening?

  52. Yawn.
    “Human interactions are so pure that they can be compared to computer programming?”

    Everything is the same as everything else, except for the differences, and everything is different to everything else except for the similarities.

    Anything can be compared to anything else if there is a relevant similarity. Here the relevant similarity is that Computer Science and Economics are both the study of artificial creations.

    You said that because the market was artificial (a dubious assertion), it could not be studied scientifically. Now you are are casually changing your mind without even acknowledging that you are now disagreeing with your original assertion.

    “Anyhoo. The science isn’t working, clearly. If the science is natural and it creates a human reality that is destructive then surely intervention is necessary?”

    So if we don’t like certain things that happen in the world, then the study of those things is not a science! Using that logic, biology and geology are not sciences because we don’t like disease or earthquakes. How are we supposed to know what intervention is necessary if you have already declared study of these phenomenon non scientific.

  53. “The argument is whether the ideology that supports using market theory as a global tool is delivering the outcome that the science says it should.”

    Uh, not it isn’t. That is a different argument. The argument here is about who actually bears the burden of corporation tax. The fact that you try and drag in all manner of other irrelevancies to try and distract from the original argument strongly suggests you don’t actually have a clear position.

  54. No Gary. The evidence may be there that workers would get clobbered more IF corp tax was set too high. Again, who has mentioned levels? The initial nonsense by Gauke was that he (and everyone on here) says because WHEN levels are set too high (the level always being a variable determined by the environmental factors supporting the corp) the burden may be unfairly shared by the workers (he really cares – like everyone on here!) so why not reduce the levels to next to nothing?

    The whole thread is about me disputing that there is any evidence to support this ideological nonsense.

    No one has answered it. I maintain that the workers won’t suddenly share less burden. They will be paid the same as before. So where do the savings in corp tax go? Hmmm?

    It isn’t difficult.

  55. ChrisM
    My position hasn’t changed, I just think about a more holistic approach with respect to human society.

    You are very dull.

  56. ChrisM
    Where’s your evidence that losing corp tax will increase the wages for workers over time, based on the argument that setting corp tax too high will lessen their wages over time?

    Why do you support the rich getting more and more of the resources considering they are a tiny fraction of the population?

    Is this the market acting efficiently?

    Answer the bloody questions.

  57. But your position has changed. You first claimed artificial things cannot be studied scientifically. When this was shown to be wrong, you then claimed that complex things cannot be studies scientifically. You also appear to think that things we don’t like can’t be studied scientifically.

    Better dull than a stupid twat.

  58. “Answer the bloody questions.”

    The have been answered ad nauseum bu others more patient than I. You are too stupid to debate with, so I’d rather just throw abuse at you to be honest. Pointless though that may be, it is not quite as pointless as trying to debate with you. It is marginally more satisfying too.

  59. Arnald,
    From your own evidence:
    “Taken together, these results, albeit imperfect, suggest that an assumption that 40 percent of the corporate tax burden falls on labor.” (P27)

    Your own evidence Arnald. You ask for evidence, and I’m giving you back your own evidence. And it contradicts you. Can you imagine how weird this is to contradict someone by quoting their own arguements?

    Tim – Arnald is not Murph, but are there 2 Arnalds?

    http://www.cbo.gov/ftpdocs/115xx/doc11519/05-2010-Working_Paper-Corp_Tax_Incidence-Review_of_Gen_Eq_Estimates.pdf

  60. Arnald, I think you’re talking about several different things here. To answer one of your main questions: is there such a thing as institutional capture by the richest in a given society so as to distort the work of that institution in such a way as to promote the interests of the richest? Of course there is; wherever power can be bought, people buy it. Your next assertion, which is that this phenomena is endemic to economics, is less plausible and requires some form of evidence on your part.

    However, you have a point about the institutional framework around corporation tax, but I suspect it’s not the point that you think you’re making. Say you’re the CE of a corporation, who has a responsibility to the shareholders to maximise their dividends. If you fail to do so, they’ll fire you and hire someone else. Tax upon your profits has risen, which will reduce the dividends received by shareholders unless you take action. Reducing expenditure will have different effects upon productivity depending on which area of spending you reduce expenditure in. Reducing spending on fixed costs like maintenance of plant will result in breakdowns and outages with commensurate effects on productivity. Reducing spending on variable costs like staff time and fuel will reduce productivity less, so you do that. Profits remain constant, and wages go down.

    Now, you’d have a point if you said that the legal structure of corporations tends to lower wages when taxes rise as a consequence of the lack of moral accountability within that structure. You don’t have a point about corporation tax incidence, which is empirically verifiable.

  61. Arnald certainly isn’t Richard Murphy although its obvious why some people may think that he is as they are both total fuckwits – peas from a pod. He’s very well known in Guernsey as he often writes similar drivel on local forums. His real initials are LA (which doesn’t stand for “Arnald”) and he works for a government-funded local association. Spends all day on blogs like these wasting the money of the Guernsey taxpayers who pay for the grants which fund his job. Claims to have worked in the offshore finance industry but nobody believes him as he clearly doesn’t have a clue about it. A total loony although clearly very thick-skinned. Could be on a desert island 1000 miles from any other civilisation and would somehow create (and lose) an argument and then forget what he was even arguing about. Some village somewhere is missing its idiot.

  62. Hey Guern
    Not sure what you’re on about. I’ve done more than my fair share of time in the tax dodging factories of Guernsey. I know the ropes well. Just because you are utterly blind about the situation is not my problem. Just another suit being a friend to the criminals. Well fucking done.

    Your idea of having a clue (like what you’ve said about my work, when i’m at work etc (you’ve tried this before and you were pompous and wrong then and you are pompous and wrong now).

    Just because you know my real identity doesn’t make you right. It just makes you look like the cock I know you are.

    Tell me then, oh genius HOW LOWERING CORP TAX WILL IMPROVE THE BURDEN ON THE WORKER! Because that is the contention in the original premise. If the burden on raising tax falls on the worker, what the fuck does the corp care?

    None of you have answered the original question posed by Murphy.

    Oh and Guern, Murphy has called it right far too often. You have no balls anyway mate. beaten time and time again. Go back to washing cash.

  63. Arnald
    I can assure you that I have never commented about you or your work practices “before” although I certainly do know people who have done so. Guernsey’s a very small place as I’m sure you are only too aware.
    I don’t even work in the finance industry. Let’s just say that I’m somewhat closer to your place of work….

  64. “HOW LOWERING CORP TAX WILL IMPROVE THE BURDEN ON THE WORKER! Because that is the contention in the original premise.”

    It’s not quite (RM actually said “The reality is as I say – that tax cuts deliver wealth to shareholders and no one else.”) but no matter.

    In simple steps (again):

    1) Wages are determined in large part by productivity
    2) Productivity is determined in large part by the assets & technology used to assist it (from spades to cloud computing APIs)
    3) Assets & Technology requires investment from providers of capital
    4) lower CT makes more cash available to invest in assets & technology
    5) Some (not all) of the additional cash will be invested in assets & technology
    6) To the extent additional cash is invested in assets & technology, then wages will eventually rise and costs to consumers will fall (which amplifies the same effect).

    The only sensible question you can ask at this stage is “yes, but when you say “to the extent” at point 6, how much do workers benefit by?”. At which point you have conceeded your case, and I will refer you to your own evidence which will tell you (again) that “40% of the corporate tax burden falls on labor.” (P27) and so 40% of the reduction will flow through to workers via the 6 steps above.
    I don’t want or hope for these 6 steps to be predictable, but they are predictable anyway. Live with it and pick another approach that works.

  65. “Tell me then, oh genius HOW LOWERING CORP TAX WILL IMPROVE THE BURDEN ON THE WORKER! Because that is the contention in the original premise. If the burden on raising tax falls on the worker, what the fuck does the corp care?

    None of you have answered the original question posed by Murphy.”

    Simple, really. Where else is it gonna go? Not all to the shareholders, they want the company to grow so they get bigger dividends next time. Not all to the top management, for the same reason. So it gets re-invested in the company. Departments grow, employees take on more responsibility, and even those who get stuck at the bottom see an upswing, as the extra demand for widget-staplers or whatever raises wages for same.

    See, what you and Murphy have spectacularly failed to grasp about Gauke’s comment is that it’s not specific to any particular level of taxes. Whatever they are, some part (how much depends on the market, open vs closed economy etc) is carried by the employees, and they are therefore always affected by any change in tax level.

    I’ll grant you, it may take longer for employees to see the benefit of cuts than they’ll see the cost of the tax raise. But that’s a completely separate argument.

  66. @Niels, Moreover, employees are also customers, and often shareholders, even if by virtue of having a pension. Thus “employees” end up paying the tax either in the capacity as being employees, or else in higher prices, or else in lower pensions. Corporation tax is a stealth tax. It is popular because cretins (eg LA/Arnald) think that “other people” or “the rich” pay it.

  67. http://townhall.com/columnists/thomassowell/2011/07/13/unknown_unknowns

    “There are similar kinds of gaps in our knowledge in the economy. Unfortunately, our own government creates uncertainties that can paralyze the economy, especially when these uncertainties take the form of “unknown unknowns.”

    The short-run quick fixes that seem so attractive to so many politicians, and to many in the media, create many unknowns that make investors reluctant to invest and employers reluctant to employ. Politicians may only look as far ahead as the next election, but investors have to look ahead for as many years as it will take for their investments to start bringing in some money.

    The net result is that both our financial institutions and our businesses have had record amounts of cash sitting idle while millions of people can’t find jobs. Ordinarily these institutions make money by investing money and hiring workers. Why not now?

    Because numerous and unpredictable government interventions create many unknowns, including “unknown unknowns.””

  68. Thanks ChrisM, good point (#78).

    Arnald, re your #79, we weren’t discussing what to do about taxes *today*, but tax incidence generally. Or rather, Murphy was disputing the general point. As ChrisM points out, there are other factors at play right now, and in any other particular situation, and one data point does not make a trend.

    If you have any evidence corps sit on money most of the time, that would be useful.

  69. Niels
    Murphy was reacting to Gauke speaking now (or quite now).

    As Krugman points out, profits were high pre crash, but wages for workers did not even closely correlate. The profit went to the top few. The use of tax chicanery increased the amount going to the top few.

    Lowering taxes will mean more profit going to the top few, even if Worstalls capital increase happens due to inward investment, the workers will NOT get the pay rise. It’s pointless to argue they will because the stats are quite clear on earnings. And unemployment.

    Therefore the incidence on the worker only becomes a burden if tax rates are set too high, not lessened if the tax rates are abolished. There is no proof of this.

    You would expect to see your version of it quite clearly in 0 rated Guernsey. Maybe that’s why half the shops are shut and the other half have got 50% sales. All that loose change, see.

  70. “People don’t get better off by redistribution of cash.”

    Ian

    They may not getter *richer* but there’s enough research out there to show that countries with better redistributive systems have a better quality of life.

    Isn’t that better than wealth? I’m probably in the wrong place to ask that.

  71. Arnald, people get richer because prices fall. That is the only way for the general standard of living to rise. You can’t raise the general standard of living by raising wages or other redistributions. The economy doesn’t work that way.

    So, if you cut corporate taxes, who gets the benefit? They can give it to shareholders. They can pay higher wages. Or they can cut prices. If they cut prices, everyone in the economy benefits. That’s how growth happens. Prices fall.

    You can’t improve the general standard of living by any other means. Redistribution can help the very poorest, by redistributing consumption towards them at the expense of others. Fair enough if you want to do that. But you can only do so mcuh of it before you hit a wall.

    Because people get richer when productivity rises, which results in lower prices. There’s no way around that. Tax a corporation, you tax its customers. People cannot buy so much stuff.

    The “incidence” of tax always fall on the consumer in the end.

  72. They may not getter *richer* but there’s enough research out there to show that countries with better redistributive systems have a better quality of life

    This would be the usual fantasy cod-research that begs the question by awarding redistributive systems high points in quality of life metrics merely for being redistributative, no?

    “State A is highly redistributative so gets a zillion points a priori towards quality of life, thus proving that redistribution leads to high quality of life”

  73. Arnald, you are a drooling fuckwit. Now that’s out of the way.

    “Tell me then, oh genius HOW LOWERING CORP TAX WILL IMPROVE THE BURDEN ON THE WORKER!”

    Perhaps the other answers have been to complicated for you, so, using the references you provided :

    Lets say an evil megacorp pays 1,000,000 evil tokens in evil megacorp tax.

    Burden on heroic slave workers at 40% means heroic slave workers is then 400,000 evil tokens.

    Lower evil megacorp tax to 500,000 evil tokens and the heroic slave workers are now only burdened with 200,000 evil tokens.

    For the avoidance of doubt, 200,000 is less than 400,000

  74. Ian

    I’m still waiting for an example of low corp taxes = lower prices in the real world. Guernsey charges a pittance in corp tax across the board, some not paying any. Fees for the offered services have not been cut. The net result is still a hole in the budget. Pay for the workers has not improved in line with those at the top of the scale. There is still talk of strike action by the lowest paid and the public servants.

    The hospital needs scores of millions just to “make it up to 1970s standard”. The airport runway needs scores of millions for it pass regulations. Dry and wet waste need scores of millions to be implemented.

    Cutting corp tax at a time (3 years ago) when all this was known was ludicrous.

    The latest independent social report shows a one in ten of islanders either in, or close to relative poverty, and definitely in social marginalisation.

    This in a jurisdiction with a very high GDP.

    There can never be an excuse for it.

    Lower prices! Where?
    Cutting corp tax made things worse. The failed notion of tax competition made things worse.

  75. Arnald
    Has it really made things worse? What basis are you using for comparing then and now? How much would the island as a whole have lost had corporation taxes NOT been cut to remain competitive? How many jobs would have been lost and not replaced – who would have benefitted from the lost jobs? How many jobs at the taxpayer-funded association where you work have been unable to be funded if finance business had left as a result? You just haven’t thought it through.
    You say “there is still talk of strike action by the lowest paid and the public servants”. That’s truly remarkable on an island of 21 square miles that I haven’t heard that one for about 2 years now – nothing in the media at all about it and nothing in the pubs. Or are you saying that “big business”is suppressing any such discussions?

    Every NHS hospital in the UK needs money spent on them to bring them up to scratch despite having the highest tax burden in Europe. So where’s the correlation with corporate tax rates? Yes the airport runway needs important repairs (as do all airports – our government should indeed have spent more gradually on this over the years). We had no choice but to cut corporate tax to remain competitive. Thank your lucky stars that we didn’t need to introduce GST to pay for it – one of the benefits of having built up government reserves and no debt. Unlike the UK and most EU jurisdictions of course – very high taxes AND unmanageable/reckless levels of debt. So who’s got it wrong? Guernsey is in a better position than virtually every other Western economy. Unfortunately Arnald isn’t benefitting from Guernsey’s success so let’s slate it shall we?

    “One in ten in or close to relative poverty” is a great phrase – doesn’t the word “relative” mean anything to you? Poverty Guernsey-style ain’t exactly the same as poverty elsewhere is it?

    The notion of tax competition did not and has not “failed” – at least not yet. It has succeeded in keeping Guernsey’s thriving finance industry together during one of the worst-ever recessions. Without that we would have a big cut in GDP, fewer jobs and more “real” poverty.

  76. “How many jobs at the taxpayer-funded association where you work have been unable to be funded if finance business had left as a result?”

    Aha, so it not a case of workers in general losing out from lower corp tax that our parasitic little friend is worried about, but one worker in particular. What a greedy little “socio path”.

  77. Aha, so it not a case of workers in general losing out from lower corp tax that our parasitic little friend is worried about, but one worker in particular. What a greedy little “socio path”.

    There’s the rub – another identikit lefty who disguises his own selfishness under a veil of feigned selflessness.

  78. You knob ends, you have no idea.

    The zero rate was brought in to counter the IoMs connivance with UK VAT. There was very little talk of the major firms moving, and you can see the evidence of the extent of new business being attracted. As a result £100m was lost introducing it a year ahead of Jersey, who’s regime along with IoM does not comply with the EU code of conduct group. So don’t be a spaz and pretend things are like they you say.

    The banks and the subsids were paying notional tax anyway. It’s the locals that suffered. And they will further, despite grandiose claims that everything will be better ‘when things pick up’. If.

    As for my work, it’s private thanks, the tax payer doesn’t give me a bean. Parasite? I love it! because 0% corp tax on foreign owned business whilst taxing everyone else 20% is not fucking parasitical. You twats.

    Guern you are a blind moron. It was all over the press a few days ago. It was last year at pat negotiation time. It’s talked about a lot. Not amongst the clubs and wankeries you suck the cocks of, I’m sure.

    And you didn’t see the study in the media either then. 1 in 10 are facing social marginalisation. Fucking proud are you that 10% of the population are addicts, criminals and uneducated? Proud are you that welfare dependence is rising, houses are unaffordable and wages are constantly suppressed JUST SO YOU CAN PONCE ABOUT ridding other countries of their revenue.

    You utter shit.

    chrissums, I don’t know what you do but you sound like a cunt with nothing to offer. Now fuck off.

  79. Yeah fred. That’s why I took a pay cut to work not for profit providing better social infrastructure. Another twat who knows nothing about real life.

  80. Guern.
    Also as proven it’s the offshore scamming and secrecy that facilitated the financial crash. Well done for being shit.

  81. LA/Arnald/Parasite, this isn’t your blog so you aren’t in a position to be telling anyone to fuck off. As for nothing to offer, I am a tax payer, you are a tax consumer, thus whether either of us like it or not, you are taking from me you little leech.

    I see you claim to to be in the private sector, Guern claims otherwise; I know who I believe. Apart from anything else you have already admitted you were unable to even get a job at a super market, who the fuck else would employ you.

    “Leech wants higher taxes to support leeches”. Not exactly man bites dog is it.

  82. Arnald
    What a charming chap you are…
    Where shall I start?
    1. Businesses didn’t need to threaten to leave Guernsey because the decision to go to 0% was made very early.
    2. I think you will find that the zero rates of Jereey and IoM will pass the EU Code of Conduct. It was the now-scrapped ringfencing provisions which originally caused it to fail.
    3. You say that the taxpayer doesn’t pay you a bean in your work, yet the Association for which you work and get paid a salary is materially funded by grants from the States of Guernsey, ie the taxpayer! Go figure…
    4. No corporates (0ther than banks and utilities) pay other than 0% tax on profits regardless of whether they are owned locally or not. Personal tax is not the same thing as corporate tax but you seem too thick to work that out.
    5. I read the local press and listen to the radio and visit lots of bars (no clubs). Sorry but its nothing other than very occasional talk by a miniscule minority. You paint a deliberately false picture. Most of us Guerns know when we are well off and we aren’t likely to rock that boat.
    6. Yes I saw the study but you infer that only poor people become addicts (crap) or become criminals (ditto). Education is fine. There will always be a lower decile in every community except one based on communism. 340 unemployed on an island of 63000 people in a global recession, most of whom are unemployable. There is work for everybody who wants to work. Welfare dependance is rising because it’s too readily available. House prices are high because demand exceeds supply – demand is high because earnings are high and so property is affordable. Demand is always high for property in places which are desirable to live in – which totally contradicts your theories so why don’t you fuck off on the boat in the morning?
    And no – I don’t work in the finance industry so you can forget about such moronic comments.
    I think you will find that offshore jurisdictions were not the cause of the financial crash. Try that arsehole Gordon Brown and his US chums who gave the banks carte blanche to recklessly lend.
    You really don’t seem to have the first idea about anything do you?

  83. No Guern
    You are very, very wrong.

    1. At the election in 2004, all bank employees were called into meetings held by the management, to inform them that if they voted for candidates that opposed 0-10 they were effectively voting themselves out of a job. This was a strategy set out at a GIBA knees up. What more could anyone infer from that 30 minute ‘chat’.

    2. I admire (I don’t really) your sheer pig-headedness. The reason Guernsey hasn’t been in the same spotlight was because of CM Trott’s outspoken “10%” gaffe (as it was thought of at the time by the bankers). Deemed distribution was only one point in five tests. Jsy and IoM still fail, according to the published criteria. Murphy has 100% form on this. Not once has he called it wrong for years and years. Poor you having to put up with that.

    4. Guernsey based finance companies would give less benefit to Guernsey shareholders, than similar foreign owned ones without Guernsey resident shareholders as a result of 0-10. A cynical distortion.

    5. Bars? At one with the workers! No one likes striking, but people will if they feel they can go on no more with appeasing a government that repeats this “we must protect the rich” mantra. Why don’t you see how the wages of the lowest-to-middle paid public sector workers have moved over the last few years? Then add in a removal of a promised (low) pension entitlement. Perhaps add in low morale, a bigger workload and a lengthened retirement age. Actually, you could always repeat lies. That’s more your angle. In the bars. You know, those popular bars.

    6.No inference of the kind, mon vieux, quite clearly the report stated that nearly 10% of the population were marginalised. Unless you want to ignore the facts that show that a widening wealth gap produces a bigger stress on the bottom earners, then it doesn’t take much thinking about, does it? Calling it crap (in brackets) doesn’t make it right! It’s social science 101. It’s not even that: it’s being intelligent.

    The rest of your post is right-wing media fed lunacy.

    A case in point is house prices. Whereas a number of years back, youngsters working hard in the finance industry would be able to afford a start up place (with bank of mum n dad). Now they all live at home, unless mum n dad have got market distortion levels of free cash.

    It’s not simply supply and demand, a static population cannot account for that as a driver. The real problem is the rich speculating on property. If you disagree with that about Guernsey then you sure don’t work in the finance industry, nor are you a lawyer.

    Landed gentry? Joy!

  84. Arnald
    1. Bullshit – a total embellishment on your part. Employees of financial institutions were merely freminded of the importance of the industry to the economy at a time when voting levels at elections were low in recent times. You obviously chose to read a lot more into that than was the case. Nobody was threatened with their jobs .
    2. I contend that Jersey and the Isle of Man have not yet lost this battle despite what Murphy claims. Don’t forget he has form in deeming the law to be what he thinks it should be, not what it is. Personally I think that Jersey and Isle of Man will win the battle but not the war and that Guernsey has so far called it right but we don’t know yet and therefore neither do you or your chum.
    3. What happened to your 3?
    4. A difference yes – but corporate and personal taxes are two different things. What’s wrong with that?
    5. Total fabrication – a figment of your malicious imagination. Nothing of the kind is being talked about with any seriousness. If and when the time does come it will be as simple as “do you want to pay more tax”? I wonder what the answer will be…that’s a tough one just like 20000 people not wanting GST in Jersey. Of course they didn’t!
    6. It’s socialism – nothing more. ” I want more because I have less than you and that’s not fair.” Life ain’t fair Arnald – get over it Citizen Smith.

    Your point about house prices is also crap. The population has risen over the past 15 years by around 5% – supply and demand on an island of what 22 square miles. Low unemployment, high average earnings, banks lending 95% to 100% LTV. Of course prices rose – just like London. Why? Because people want to live here and aren’t leaving. Yes, some get left behind but see 6 above. I only managed to buy my first house in the early 80s with help from my parents – nothing has changed. Try Hull or Middlesborough – property is really cheap there. I wonder why.

    Your rant against people who happen to own valuable property merely highlights your socialist jealousy. Arnald hasn’t got it so nobody else should have it no matter how hard they work. That rather sums you up doesn’t it?

  85. Guern

    You don’t work in the finance industry, so you say, so you don’t know what was said. We were told that voting for anyone who opposed zero ten would be supporting the demise of the industry with a likely loss of jobs. I was there boyo.

    3. I must have typed over it.
    A grant is given to enable a sizeable loan in order to replace public stock with the ebst product available. The grant is ring fenced. The whole lot is audited 4 times. Since a lot of the shoddiness in the Gsy OFC is not required to be filed or audited, and the tax payer is subsidising a £100M shortfall in tax revenue in 2009, you can shut right up. I think you’ll find government subsidies (in the UK – as a percentage) to the for-profit sector are far greater than the grant we get. Go ask the politician in charge.

    Guern, I happen to work in the sector. I know what the issues are. Get over it.

  86. Arnald
    Oh don’t worry – I know exactly what was being said – word for word. You’ve interpreted as you see fit and yes of course the industry as a whole could have been at risk and yes of course that would inevitably mean loss of jobs, but not threatening individual jobs you arsehole !

    3. Utter bullshit. Who do you think funds your salary? The taxpayer. I know the politician in charge very well.

    Get over it.

  87. But Guern, you don’t work in the finance industry? Which is it, hmmm?

    So you were in the room with me?! The cleaner?

    “…but not threatening individual jobs you arsehole !”

    I never said that, tossface!

    We were given a doomsday scenario, very clearly intended to scare finance workers from thinking for themselves.

    Regulatory capture, mon vieux.

    Since you know the Deputy, ask him what he thinks about the tax payer and the association.

    Oh and I do know the sector well, so don’t play games with me with your outdated supply/demand bollocks. The houses are there, they’re just too expensive. That’s not over demand, they’re simply not selling.

  88. No Arnald – I don’t work in the finance sector. But yes I do know exactly what the lobbying process entailed. Has it occurred to you that I may have been involved with that process?
    See para 1 in your post 97. You clearly felt that your job was under threat. Now you said it wasn’t. So if it wasn’t why did you feel intimidated? Which is it?
    Anyway, not regulatory capture but lobbying. Making sure that voters understood what they were voting for or against as opposed to “would you like to pay more tax?” “No thanks – I’d better vote against that”.
    I will indeed ask Deputy Jones. I’m veyr happy to show him your postings on this blog as well. Seeing as he’s instrumental in paying your salary that should be very interesting.
    Its not the houses which are over-expensive – its the land and they aren’t making any more of that. Supply and demand is the driver. If land was cheaper then the houses would be cheaper. Hardly brain surgery is it? They’re are also “not selling” because lenders have tightened up their LTVs. If you haven’t got a decent-sized deposit then there is no loan available. So the money supply dries up. See – its all about supply and demand. Basic economics. But oh, I get it – you think everyone should be able to buy a house don’t you – funded by the taxpayer? How many homeless people are there in Guernsey? Not many! What’s the ratio of homeowners to renters? Incredibly high. Compare that with anywhere else. Its simply not the problem you claim it is. You’re just driven by socialist claptrap.

  89. Guern
    Oh I see. Now it’s personal threats! From one so high up in Guernsey society! Oh ok you win! I’m wrong! How could I have been so stupid!

    Ummm Why do you think there aren’t many homeless people in Guernsey? Surely social housing hasn’t got anything to do with it!

    Here’s my post 97 para 1
    “At the election in 2004, all bank employees were called into meetings held by the management, to inform them that if they voted for candidates that opposed 0-10 they were effectively voting themselves out of a job.”

    Dunno where you are getting the personal aspect from.

    Feel free to take it from anonymous to personal, but that says more about you than it does about me.

    I rest my case about the rabid right wing. Take down the man, not the issue. Be blind to the suffering of others as long as precious ideology is left to run in their favour.

    I agree there is little land, but there also less people wanting housing re the aging demographic. Somewhere your supply/demand falls down, unless you are suggesting that the demand is coming from those that can readily afford the prices. Who will that be then? Not your average. I can tell you that for free matey.

    There’s nothing socialist about the reality of welfare need and housing waiting lists.

  90. Arnald
    Don’t be such a dick head although I suspect you can’t help it. Who’s made a personal threat? You openly invited me to speak to the Housing Association and I’m taking up that invitation. If you didn’t mean it then you shouldn’t have made the invitation. But I’ll speak to him about lots of things as I often do.
    Yes – I think social housing is excellent on the island and it’s funded by government grants so what exactly is your point?
    I’m getting the “personal aspect” from you complaining that you were pressurised. It was you who made that claim!
    Please don’t call me “matey”. I’m very choosy about who I call “mates” and I choose not to be matey with aresholes.

  91. Guern
    You outed who I am and where I work. That’s bad form. You’ve even said you’re going to out me to a politician. It doesn’t get more personal than that. That’s worse form.

    I haven’t made any invitation other than talk to a politician, who has nothing to do with my organisation, nor does he pay my wages.

    That’s not personal. You are. A sign of weakness. Matey.

  92. Arnald
    I quote: “Go ask the politician in charge.” I am merely taking you up on that and putting my question into context. Hardly my fault if the chain of posts to put it into context causes you difficulty. I think it’s called “contributory negligence”.
    It’s total bollocks to say that the politician has nothing to do with your organisation and you well know it. It’s equally total bollocks to say that he has nothing to do with paying your wages. If the grant from his States department to your association didn’t exist then you would have nothing to do and therefore no job. Are you too thick to see that?
    Now fuck off and enjoy your weekend.

  93. Arnald
    I’m not actually as big a bastard as you think. Don’t worry I won’t expose you to Deputy Jones but I will ask the funding question but isolate it to that.
    Mind you it’s not that you don’t deserve to be outed. Your whole demeanour on this blog to multiple posters certainly invites a severe response. At least Tim allows your posts – compare that to TwatMurphy’s policy.
    Now enjoy your weekend.

  94. I think the reason timothy has allowed this off-topic spat is because he couldn’t give a toss. That’s the difference.

    Anyhoo, I reckon the politician in question (you really ought to stop outing) will confirm how the grant works, and how Guernsey is benefitting from having dedicated individuals turning their shabby historical negligence in providing social housing into a project that the rest of the islands are looking to emulate.

    At the least possible expense to the tax payer. After all, the state has to take some of the cost to repair the mistakes.

  95. Arnald
    It’s not hard for anybody to find out for themselves who the politician in charge of Guernsey Housing is!
    It is indeed a very good project. And I note you’ve moved from saying ” no cost to the taxpayer” into “at the least possible expense to the taxpayer.” There are at least 8 people employed there. Payroll cost north of £300k. If the taxpayer is not directly or indirectly funding that then I’m the Queen of Sheba.

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