January 2012

Ritchie\’s perfect tax system

An efficient tax system is:

1. Comprehensive – in other words, it is broad based;
2. Complete – with as few loopholes as possible;
3. Comprehensible – it is as certain as is reasonably possible;
4. Compassionate – it takes into account the capacity to pay;
5. Compact – it is written as straightforwardly as possible;
6. Compliant with human rights;
7. Compensatory – it is perceived as fair and redistributes income and wealth as necessary to achieve this aim;
8. Complementary to social objectives;
9. Computable – the liability can be calculated with reasonable accuracy;

All of which facilitate the chance that it will be:

10. Competently managed.

In combination these are key attributes of a good tax system.

Comprehensible, Computable…..these both mean that it must be the letter of the law, not the spirit, which is obeyed.

Well done Richard, you\’ve just undermined one of your basic points.

Twats at the Telegraph

Here, in all its glory, is a Telegraph editorial:

The remarkable thing about the silk cape on show at the Victoria and Albert Museum from tomorrow is not that it took 80 people five years to make, or even that it is woven from the gossamer of 1.2 million golden orb spiders, which produce undyed silk of a golden hue. No, the remarkable thing is that the spiders were let loose afterwards to skip happily through the undergrowth of their native Madagascar not a whit the worse for contributing to this work of art. Their web is deftly extracted by trained handlers.

Britain once had a silk industry, with weavers under broad windows busy making brocades, lustrings, paduasoys and suchlike rich textiles. If golden orb spiders were farmed like silkworms, the industry might thrive again, in Sunderland or Hull. To spin gold has a fairy-tale ring to it. These obliging spiders could be the Rumpelstiltskins of a start-up enterprise.


Let us, for a change, get the labour theory of value the right way around. The labour which goes into the production of something cannot be paid more than that thing is valued at.

Here we have 400 man years of labour going into the production of a cape. That labour cannot be paid more per year than one four hundredth of the value of the cape.

Let\’s put the cost of minimum wage labour at £20 k a year. Including overheads etc. So our cape must be valued at £8 million. Very limited marketplace for that. The occasional trophy third wife of a billionaire maybe.

To produce an industry we\’d need to get that price down…..which means the wages have to come down, doesn\’t it?

It\’s just not something to base an industry on so what are these people talking about?

Cameron\’s an idiot

In a speech to the Council of Europe in Strasbourg, the Prime Minister will argue that European judges have become too powerful. He will say the court should not “undermine its own reputation by going over national decisions”, just days after its judges overturned the decision of British courts to deport Abu Qatada, the radical Islamic cleric.

What the hell do you think a supranational court is for if it isn\’t to over rule national ones?

The only way out of this is to leave the jurisdiction of the court, which means leaving the Council of Europe and thus the EU.

No, I don\’t think that the ECHR stupidities are sufficient reason to do that, I\’ve plenty of other reasons for desiring that we leave.

But to complain about a supranational court being supranational is just stupid.

Nick Matthiason\’s spouting bollocks

Sorry Nick, no, this isn\’t true.

That treasure trove is the $3.1tn of tax, equivalent to 5.1% of global GDP, which according to international campaign group Tax Justice Network is illegally evaded in 145 countries, covering 98.2% of the world\’s population.

That\’s Ritchie\’s report that is.

The majority of these flows are washed through tax havens. These secrecy jurisdictions act as cover from international tax authorities. Disturbingly, the obstacles placed by the global financial system that would allow individual countries to track down and repatriate this cash are prohibitively burdensome. This is why a new age of financial transparency and accountability is required. Five key reforms would lay the foundations for this:

And no, Ritchie\’s report shows no such thing.

Let us, for a moment, assume Ritchie\’s report is correct (and for once I\’ve no problem with his basic methodology although I do of course with the conclusions he draws).

What he\’s shown is that there\’s a largish grey economy in many countries. And this grey economy ain\’t people fooling around in tax havens. It\’s the builder doing a job for cash, VAT off. Dozen eggs at the farm, no receipt.

This grey economy that Ritchie has measured just isn\’t all about offshore at all. Tax avoidance might be, the black economy of illegal activities, the drugs etc, might well be, but this grey economy that is being measured here is pretty much a domestic phenomenon in each and every country.

So, however much you want to collect this tax, however much you want to get the tax avoidace industry, I\’m sorry, but you\’re spouting bollocks when you use this report to call for closing down offshore.

They\’re just not related.

Ho, ho, ho

We’ve experienced 30 years of public service “reform” which means that many public services, certainly those at local level, are already delivering serious value for money. All the fat was long ago pared away.




20 January 2012


Emma Marinos


Marketing / PR

Senior Executive


Full Time


£62,460 – £66,366
£63k a year for telling everyone how lovely the council is so that the Councillors get re-elected?
The job\’s little more than phoning the Rolodex of the journos on the local Borough newspapers.
That\’s all the fat pared away is it?

Questions in The Observer we can answer

How can £20bn cash cuts and increased marketisation lead to a better NHS?

1) Markets (note, not capitalism, markets) promote innovation better than centrally planned or run systems.

2) Innovation leads to increases in total factor productivity.

3) Increases in tfp are synonymous with (as in, this is the definition of tfp) being able to do more with the same resources, being able to do the same with fewer resources.

A market driven health care service (note please, not a capitalist one) will be more efficient over time than a not-market driven health care service.

That\’s how.

Willy Hutton comes over to the Friedmanite dark side

Government must therefore set a policy framework that forces the close collaboration of monetary, financial and fiscal policy to induce a sustained rise in credit from our very wounded and risk-averse financial system. The British government, along with other western governments, must replace its redundant inflation target with a target for the growth of the value of the goods and services we produce – the growth of GDP in cash terms. It should say that every instrument of policy – quantitative easing, interest rates, government borrowing, guarantees for new bank lending – will be used to sustain the growth of money GDP by 7% a year for the next five years.

This is NGDP targetting.

Of course, Willy being Willy he doesn\’t understand that this is a direct outgrowth of Friedmanite monetarism.

Nor does he understand that it\’s all about money, the money supply, the monetary stance. None of the rest of his blather about government subsidies and direction of investment is necessary at all.

But then if Willy understood the genesis of his pronouncements, the implications of them, then he wouldn\’t be Willy, would he?

Peter Tatchell: A Good Thing

The occasion of Peter Tatchell\’s 60 th birthday.

Man\’s a loon of course.

His various forays into the world of economics have been laughably ignorant.

Certain of his campaigns have been based upon very, very, odd readings of the world.

Yet, as Sellars and Yeatman didn\’t put it, he\’s not been wrong but wromatic, nor even right but repulsive.

On balance, he\’s been a Good Thing.

On which note Happy Birthday to Mr. Tatchell, someone who probably wouldn\’t accept one but most certainly should be offered a peerage.

For we should cherish, promote, reward and acknowledge the loons that we are privileged to have among us.

Thieves and charlatans in social housing

Ouch, these numbers hurt:

A fifth of all council house tenancies may be fraudulent, according to investigators who have conducted the first large-scale examination of the problem………

Fraud investigators matched 27,000 tenants – the entire tenant roll of two councils and four housing associations – against mortgage and credit databases.

They found \”indications of fraud\” – such as the tenants having mortgages, utility bills or active credit at other addresses – in 5,300 cases…………

HJK, which works for councils and housing associations performed the \”data-matching\” exercise with the 27,000 tenants using legal, publicly-held databases such as credit reference agencies and the Land Registry.

In 2,120 cases, 8 per cent of the total, HJK found \”red\” indicators of fraud, where the registered tenant had a mortgage, bank account, active credit or utility bills at another residential address.

In 3,180 cases, 12 per cent of the total, they found \”amber\” indicators of fraud – active credit, bank accounts, Sky TV or utility bill records held by a person with a different surname at the tenancy address, but no such activity there by the registered tenant.

And the importance of all this?

There are eight million council or housing association homes in England and 1.8 million households on the waiting list.

So, near enough, those people on the waiting list are matched by those in council housing who are already paying market rents to the dodgy characters who are subletting and pocketing the subsidy.

Or, we don\’t actually have a shortage of social housing at all. We\’ve got instead an excess of fraud in the social housing stock we already have.

No need at all to build more: just make sure that those getting the subsidy are those who are supposed to get the subsidy.

I will, of course, be fascinated to hear what the professional homeless crowd have to say about this.

This won\’t be an accurate number of course because London rents are higher than elsewhere but just to give an indication of the scale of the problem.

Last week, Shelina Akhtar, a councillor in the London borough of Tower Hamlets, admitted subletting her housing association property as she was convicted of £1100 in housing benefit fraud.

She paid a subsidised \”social rent\” of £400 a month, but lived in private accommodation elsewhere and charged her tenant £1000 a month.

£600 a month on 1.6 million properties. £1 billion a month, £12 billion a year. Yes, even in today\’s inflationary times that\’s real money.


On not recognising polygamous marriages in the welfare system

At the time they stated: \”Where there is a valid polygamous marriage the claimant and one spouse will be paid the couple rate … The amount payable for each additional spouse is presently £33.65.\”

This has subsequently been increased to £38.45 a week for second and subsequent spouses, while the husband and his first wife are paid the ordinary couple rate of £105.95.

As well as income support, a husband with more than one wife is also eligible for possible housing benefit and council tax relief because of the larger property needed to accommodate his family.

OK, so they\’re going to do away with this system. Apparently it applies to some 1,000 families in the country (where valid polygamous marriages have been contracted abroad and then a subsequent move to the UK).

Shrug. 1,000 families is less than a rounding error in the system.

Under the new system of Universal Credit, which will replace all mean-tested benefits from next year, polygamous marriages will not be recognised at all.

Instead, a husband and one wife will claim as a couple – with any other adults living in the household claiming as single people.

And that\’s the new system.

Now, the benefits system is of such awesome complexity that I have no idea of the answer to the next question(s).

Will this actually reduce the benefits bill?

Imagine the maximum Moslem family possible: one man, four women. We\’re moving from one couple plus three extras to one couple plus three single people. This may or may not mean more paid in benefits, less paid, I dunno.

Now move it to the more likely situation: those religious enough to have such a multiple marriage are likely religious enough to be fruitful and multiply. So in fact we\’re moving to a system of one married couple with children and three single parents with children. All of whom get to make their own claims on the welfare system independently. As we are quite deliberately and specifically not recognising the specific circumstances of the polygynous marriage.

Is this going to save money? That\’s not the only lens through which to view the decision, of course, but will it actually save money?

Given the way the system does pay out for single parent families I have my doubts but does anyone actually know?

Guardian idiocy again

Seriously, is it entirely necessary to be ignorant of finance to write for The Guardian on finance?

Greece is on the verge of a breakthrough in talks with its creditors that could wipe out up to 70% of its debts and alleviate the crisis in the eurozone.

No it bloody isn\’t.

They\’re on the verge of a deal whereby some of their creditors take a 70% haircut on their debt.

But not all of their creditors take a 70% haircut.

Therefore the total debt will fall by some amount smaller than 70%.

Ritchie on Vodafone India

We get the great man\’s words:

This was a transaction relating to Indian assets that India wanted to tax, and thought it could tax. But it was recorded ‘elsewhere’ in a tax haven structure. And the result is that the legal form of recording it ‘elsewhere’ has meant that Inida’s laws have been subverted and tax is not due.

Yes, that\’s right. A ruling on the law from the Supreme Court is subversion of the law.

Rather than, as most of us would take it, a declaration of what the law actually is.

Can I call Tristram Hunt a Twat?

Or should I use the more obvious word?

It is a tradition of redistribution, intervention and socialism equally as compelling as Adam Smith\’s \”invisible hand\” (which, one should remember, was a satirical attack on laissez-faire morality, drawn from Shakespeare\’s Macbeth).

It\’s got bugger all to do with laissez faire morality. It\’s about how the merchant (read, capitalist, for the word had not been invented in Smith\’s time) will, despite the greater profits of the foreign trade, find himself still likely to invest at home.

The most important modern result of which is that even if we have perfect theoretical capital mobility it still isn\’t true that labour bears all of the incidence of corporate taxation.

Calling Mr. Luke, Calling Mr. Luke

I know this street very well. Used to work in one of the restaurants you can see up on the high pavement, at another just up the little alleyway there. Bought my flat from the estate agents you can see (upside down, when the altercation is going on) at the other end of the street.

Indeed, my flat is a whole 100 yards or so up that alleyway.

And yes, that is the A4 that she\’s parked her car on.

Dunno who the bird from Ulster is but I\’m sure Mr. Luke, if he should care to comment, can tell us which shop it is she has in that area.