Ritchie\’s defence of the 50p tax rate

We believe that the 50p tax rate must stay. It’s an important symbol of tax justice, of our commitment to a fair society and our belief that those who can pay should properly support those who are in need in our society by helping provide them with the income they need – which they’ll spend to help create jobs in our economy and so boost growth.

Amazing, isn\’t it.

No mention at all of whether it actually raises nett revenue. Something that you would think important about a tax rate really.

38 thoughts on “Ritchie\’s defence of the 50p tax rate”

  1. In light of the +/-£30bn that goes missing through his paymaster’s incompetence I think he should shut up! Some hope…

  2. ah that reminds me – that link you provide to the Telegraph about self-reported tax returns leaves open the impact of the 50p rate via PAYE. Does anybody have a link to the combined impact?

  3. He has said today on Twitter that it is “impossible” that the 50p tax rate is not raising revenue.

    Needless to say he doesn’t link to his workings.

  4. But in reality it is 58%, which is bloody outrageous. They will take nearly 60% of someone’s income over £150K. Simply outrageous.

  5. Yet the sort of people who ‘need’ to be given income by the state aren’t the ones who “help create jobs”.

    As the saying goes, no-one has ever been given a job by a poor person.

  6. Interesting that both sides agree it’s just for effect. Some like the effect and some don’t.

  7. @Vir Cantium

    Consumers create jobs. It is their money that pays businesses for goods and services which funds salaries and profit.

    Poor people are consumers too.

  8. @BenM

    Sure, consumers create jobs. But the wealthy save, and create wealth creating assets.

    But no doubt the commercial and financial decisions of the poor are better than those of the wealthy. Why not just take all of their money and ‘consume’ our way to wealth?

    Of course you didn’t mean that, but what you did mean, with complete arrogance, is that you and your political friends can accurately judge the correct proportions of saving and consuming. Do not a thousand historical failures of this idea frighten you even a little bit?

  9. @FredZ

    No crash was as mighty as the 2008 credit crunch – brought on by 40 years of laissez faire economics.

    Seems the herd thinking – sorry market – not so good at allocating resources either.

  10. Saw Banality Murphy talk crap unchallenged on Sky News because his opponent was worthless. So many open holes in his argument untouched. He says he’d hike it up to 60p if he could as well on Twatter. What a thief.

    His only evidence that it would work? “It should.” Tax revenues have gone down in Greece after tax hikes. I wonder how BM explains that one away.

    And the real kicker? “But you have not one single figure that makes your case – which leaves me on pretty safe ground.” Does Banality actually have any self-awareness?

  11. Of course the primary purpose is effect. This is generally true of Progressive policy; hence laws routinely described as being “to send a message”. Like the legal system is a fucking post office.

  12. @BenM: ‘No crash was as mighty as the 2008 credit crunch – brought on by 40 years of laissez faire economics.’

    You what? Come again?
    The crash happened for a variety of reasons, many of them government-inspired.
    Where’s the laissez-faire? When they saved the banks and shareholders that went bust, that was laissez-faire?
    But leave that to one said. What is beyond doubt is that it was all worsened – or put another way, our ammunition to fight back was vastly depleted – because in the UK and in western economies around the world socialist and quasi-socialist rent-seekers, thieves and electoral bribe-artists have had it their way for so long that whole nations are now broke.

    (Iceland is kind of laissez-fairing its way back to some sort of health; ‘Europe’, which prefers your way of operating, isn’t.)

  13. “No crash was as mighty as the 2008 credit crunch – brought on by 40 years of laissez faire economics.

    Seems the herd thinking – sorry market – not so good at allocating resources either.”

    Is this one of those things where if people keep on repeating it, they think it’ll become the truth?

    Or do you simply not know the meaning of “laissez-faire”?

  14. “No mention at all of whether it actually raises nett revenue. Something that you would think important about a tax rate really.”

    I doubt Ritchie is overly concerned with whether or not such things are counterproductive (or indeed morally obnoxious). As a devout socialist, he wants to punish people for having more money than he thinks they should have.

  15. Fred Z, you say that the wealthy save, thus creating wealth creating assets. In theory maybe, but right now there’s plenty of savings around, and it’s not going into wealth creating assets. It’s going into T-bills, property or just sitting on company balance sheets. If the wealthy can’t think of anything better, they might as well spend their money – that’s what it’s for. That might stop them being taxed (I have no idea what the fairest or most effective rate is btw).

  16. Unfortunately, while governments, bankers and their apologists continue to peddle the myth that banking is in some way a free market industry, BenM’s criticism is going to be valid. There has been what amounts to a conspiracy among the ruling elites since the 80s that banking is laissez-faire personified, and even more laughably is “the engine of the economy”, rather than a parasite that lends a bit for investment as a kind of loss leader.

    Let’s just remember that right now, governments are borrowing money from banks that the banks do not have, to give to Greece, to give to the banks to pay back debts to banks representing money that the banks themselves never had, all backed by nothing but a guarantee that States are prepared to tax their citizens into ruin just to keep this system running.

    This is the definition of “laissez faire” foisted on us from the Thatcher/Reagan era onwards. We can hardly therefore blame people who blame “laissez faire” for the credit crunch; only a small minority of Austrian School influenced cranks on blogs have consistently criticised the system. There was a noticable absence of bankers running round with zillion dollar bills complaining about the lack of a free market in banking prior to the crash, and neither have they done so afterwards; they are too drunk on the myth that they are the fundament of the economy rather than its ruin. Loaned out 50 or more times the money you have? “Not our problem guv, it wuz somebody else. Oh btw we’re too big to fail lolz kthxbi”.

    Guillotines, tumbrels. You know it makes sense.

  17. “@FredZ

    No crash was as mighty as the 2008 credit crunch – brought on by 40 years of laissez faire economics.

    Seems the herd thinking – sorry market – not so good at allocating resources either.”

    Laissez Faire economics? Government control of Interest rates? Government control of the Money supply? Governments telling Banks to give mortgages to people who couldn’t afford it? Government bailing out Banks? Laissez faire economics?

    Thanks for me giving me a good giggle…

  18. Ritchie was on BBC’s “Daily Politics” today. Sadly, it seems it will not be available on the BBC iPlayer until tomorrow, or I’d have put in a link.

    He claimed that the extra 10% woudld raise £5 billion. Which surprised Andrew Neil. Who invited him back onto the show once it was established quite how much it had indeed raised. The offer was accepted. I do so hope it will be broadcast.

    On a side issue: even if the extra 10% does yield revenue, it gives no indication of how much economic activity and hence tax revenue from those earning less than £150,000 will be lost.

    Also, the Laffer Curve was misrepresented: it is not true (as was claimed) that the Laffer Curve states that lowering taxes raises revenues. That is just wilful ignorance. The whole point about the Laffer Curve, is that the revenue raising effect of a tax charge changes as the percentages vary. It is ludicrous to say that tax revenues will always increase if taxes are lowered.

    It seems to be the case that so long as one can keep a straight face, any crackpot opinion will be taken as vaid by the BBC….

  19. Ian B:
    If you could squeeze your head a mere two-thirds out of your arse, you just might get a glimpse of reality.

  20. Nautical Nick:
    I watched this and at least Brillo challenged his figures, as did the other guest from Pimlico Plumbing who clearly thought Ritchie was a loon.

    On Sky he was just given an unchallenged platform for his ‘redistribution’ lecture.

    Why cannot broadcasters see he is a complete fool?

  21. His strangest delusion is that the state is one giant Salvation Army.

    But he has no declared experience working in the public sector – his views get coloured by his union mates and what he imagines. He has no more credibility in discussing what goes on than he has describing what its like playing prop in a test match at Twickenham.

    Now we know he is capable of admitting a change of mind – think of some of the tax avoidance stuff, where he managed to realise it was immoral AFTER making his pile. Fair enough.

    But could he be open to a change of mind about the State as an instrument of charity if he spent, say 6 months in HR in the NHS. Or in the ‘Grants and Partnerships’ section (or whatever they call it) at one of the crazier London boroughs.

  22. quote from richy:

    “His claim was because he pays more tax there’s less money in the business”

    wtf? umm, so to keep the owner’s level of take home pay he has to take out more when taxes rise…

    is that so fucking hard to understand??!

    RM is a fucking prick. I am a very drunk corporation tax manager, but fuck this, RM is a fucking moron.

  23. FredZ – how about reading a few novels by Dickens – eg Nicholas Nicleby, written at the time of the great railway boom and bust in Britain, or Little Dorrit, or Our Mutual Friend. During the years those books were written, over 400 banks crashed, without any depositor insurance whatsoever.

    You probably believe that polar bears are in danger of extinction too. Not realising that if they are driven off the ice cap, they will forage amongst puny humans who are far easier to catch than those pesky seals and walruses.

  24. So Much For Subtlety

    diogenes – “You probably believe that polar bears are in danger of extinction too. Not realising that if they are driven off the ice cap, they will forage amongst puny humans who are far easier to catch than those pesky seals and walruses.”

    That sounds like a win-win to me. The polar bears would be saved. The increasingly fat and lazy British, nay, Western, population would get an incentive to do some exercise. Those that don’t learn to run faster will get eaten.

    I am just a little concerned about the impact of all that cholesterol on the poor bears’ health.

    Global warming is really the gift that goes on giving isn’t it?

    Although why the hell anyone didn’t even lift a finger to destroy Ritchie’s argument is beyond me. We should write in and demand that they give equal time to our Genial Host the next time Fathead is asked on.

  25. Regarding the Laffer Curve-

    Has anyone got a graph charting over, say, the past 40 years,

    a) The tax rate.

    b) Tax revenues.

    No need to adjust line (b) for inflation. We ought to be able to spot a rough correlation from the peaks and troughs. First derivative might be instructive.

    Following on from that, is it actually possible to calculate (a) independent of (b)?

  26. Funny, funny comments.

    @Diogenes, I suspect you are over refreshed. If polar bears come for me, I’ll eat them. I’m a Canadian, a hunter, and a very accurate shot with a variety of guns. That’s right, don’t faint, I wrote ‘guns’. No unmanly, girlish shrieking please.

    @Luke: Oh dear, all that cash in T-bills, property or just sitting on company balance sheets. Which means it got channeled by the financial system into the hands of borrowers, who, if private, bought or built income producing stuff with it. Why do lefties think we put the cash in our mattresses?

  27. Fred Z so private borrowers always use funds to buy or produce income producing assets? Was the recent property boom a figment of my imagination? Store cards? Credit cards?

  28. Luke, you referred to the “wealthy” initially which is what Fred Z addressed. Now you are changing it to “private borrowers”. Are the “wealthy” and “private borrowers” supposed to by synonymous?

  29. My bad, I see what you are referring to. I am not sure though that the property boom was caused by wealthy lenders though so much as low interest rates.

  30. ChrisM , no. My disagreement with FredZ was whether all savings are channelled into productive investment. I’m not distinguishing between the savings of millionaires or Chinese peasants. His point I think was that lower taxes on the wealthy means they save more and those savings end up in productive investment, so everyone gains. That’s a rational argument, but I wonder whether in fact rather than theory the savings of wealthy (or Chinese peasants) are right now being channelled into productive investment.

  31. Yes, I see that now, hence my retraction. That said, I have no reason to think that government would channel it into more productive investment. Governments are not noted for spending money wisely.

  32. Taxation at this level is pure confiscation. The State could take the revenue raised by this tax and burn it and Richie et all wouldn’t give a shit. Its primary aim would be satisfied.

  33. To be fair Rob, this would actually be a better use of the money that the government spending it. It would raise the value of everyone elses £, and the government wouldn’t get to waste it. Your point however spot on.

  34. @Rob

    “Taxation at this level is pure confiscation.”

    No it isn’t.

    It’s the law. And quite a popular one too.

  35. That it is the law does not mean it is not also confiscation. That it is popular also does not prevent it being confiscation.

  36. “Taxation at this level is pure confiscation.”

    No it isn’t.

    It’s the law.

    Confiscation is legal (or, at least, claiming so to be.) Theft is illegal. That’s why we have the two words.

    Pendantry, I’m sure, but important nevertheless.

  37. @Luke:

    You lefties don’t do math much less statistics. If the decisions of the private sector are more likely by 5% to be productive than the decisions of the public sector, what is the result after 50 years?

    Haven’t a clue, have you? Don’t even understand the question, do you?

    Of course the private sector makes mistakes. We just do it far less than half witted, semi-competent bureaucrats and politicians. Jesus H. Christ, but one must be insane or utterly stupid not to understand this simple point.

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