Fascinating point by Ritchie

This is unsurprising. Switzerland deliberately created banking secrecy in 1934 to assist those evading tax in their home jurisdictions. Whether or not this was acceptable in 1934 does not matter: it is wholly unacceptable now.

That\’s right. The world is entirely free of thieving governments who would murder people for their money, isn\’t it? Not a single dictatorship on the planet and never will be ever again.

To make the UK into even more of a tax haven than it already is would only increase our isolation from Europe, as it would effectively be a declaration of economic warfare on the already tax-starved economies of the EU.

The average is that some 40-50% of all economic activity ends up in the maws of government in those countries. We can call this many things but \”tax starvation\” ain\’t one of them.

In contrast, the UK badly needs high corporate tax revenues from businesses capable of generating large numbers of jobs, as employees alone are currently unable to fund the social services they require – hence the need for a serious tax contribution from their employers.

He\’s really still not got this tax incidence thing, has he?

All corporate taxes fall on households in the end. Companies might be convenient places to get cash from but they are not the people actually carrying the economic burden. It is some combination of shareholders, workers and consumers that are carrying the burden: those getting the social services which they are unable to fund.

What Ritchie\’s done there is prove that social services are too expensive. Well done that man.

10 thoughts on “Fascinating point by Ritchie”

  1. Don’t suppose it will stay there long :

    Mr Murphy,

    I believe that the average tax take in EU countries is 40 to 50 %.

    To spell it out, for every £ 5 earned by MY efforts, the government takes at least £ 2, effectively by threat.

    Leaving aside the moral question, in which way can this be described as “tax-starved” ?

    Or do you subscribe to the Brownian Motion – every penny I have actually belongs to the state – though I may graciously be allowed to retain enough to feed myself ?

    I can’t help thinking that once the state takes all that I earn, I might just stop bothering to earn at all, then where would it be ? Perhaps you could indicate the point at which I give up earning as a waste of time, where would that be ? 50 % ? 60 ? 85 ? I am NOT an ant.

    Alan Douglas

  2. Alan,

    RM has stated publicly that he considers income to be a “conditional property right”, i.e. it isn’t yours until you’ve paid whatever the taxpayer thinks you owe. I think that’s Brownian Motion, isn’t it?

  3. “Tax starvation” gives me an idea.

    Poverty campaigners talk about “fuel poverty”, which they define as spending more than 10% of your income on fuel.

    What about a similar definition of “tax poverty”?

  4. @Richard: I have long suggested the idea that the Tories should leave a ‘tax bombshell’ for any future governments in the form of a law that states no-one should lose more than x% of their declared income in taxes (of any sort) in a given tax year. You could easily come up with a formula incorporating all forms of taxes and expenditure spreads (on vatable /non-vatable items, and whether you smoked or drank etc) and people could input their details and see if they came over the threshold. An automatic tax rebate would then be paid.

    Just setting the bar at a level that wouldn’t trigger millions of claims would be instructive – I reckon it would have to be 60%+ at least.

  5. The same lack of comprehension on who pays corporation taxes applies to whose money Governments spend. It is *never* Government money, because they have none.

  6. One of the main reasons for banking secrecy in 1934 was to protect the savings of Jews who had paid tax in full on their income. It was to avoid theft rather than taxes.
    The claim that they held in 1990 some $5 billion of funds belonging to those who died in “the Holocaust” (and in 1940 held a multiple of that belonging to survivors as the USA, unlike the UK and Netherlands, only accepted rich Jews as refugees so most of the rich survived and most of those who died were poor/middle class) is fairly clear evidence of this.
    Or does Ritchie claim that the Jews who transferred their money from Germany to Switzerland were doing so to evade tax?

  7. The real giveaway is that people like him always assume that they are on the inside of the tent.

    He used what he calls “evasion” but is actually “avoidance” to make his pile.

    Now he’s made it, he’s so virtuous.

    But he’s like the greenies who think greenie, feudal jobs are a great thing – but obviously not for Jocasta, Targuin and Chester, who will just do restaurant reviews for the Guardian.

    Come on Ritchie, tell us the greenie tax methods you used on the way, err, “up” and while you’re at it, tell us how your tax advice to clients was appreciated: “Well, no, you don’t have to pay that amount of tax by law, no, but I’m telling you to pay £100,000 next fortnight because I think that would be a Good Thing. And that will be 900 guineas, thank you very much.”

    A sound professional business model?

    Yeah, right…

  8. Hmm. If businesses capable of generating large numbers of jobs find they have to pay high corporate taxes to pay for their employees’ social services, there is a risk, surely, that the large numbers of jobs might be significantly reduced?

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