Ritchie needs to explain Monaco

California is looking to increase its taxes on the richest in that state. And as a result all the usual mischief about the rich heading for the door has been widely heard.

Hmm.

It’s fairly easy to move in the US. But people don’t.

Shall me lay that myth to rest then?

So people don\’t move to avoid (or evade) tax then. Seems to me that this isn\’t really consistent with the existence of Monaco. For Ritchie\’s spent years tel;ling us that people do indeed bugger off to avoid taxes that are righteously due to Westminster. This is why he wants that passport based method of taxation, not residence.

So, err, how can you argue that people don\’t move as a result of tax and also argue that people must still be taxed even if they do move? The latter is entirely irrelevant if you believe the former.

54 thoughts on “Ritchie needs to explain Monaco”

  1. In Ritchie’s world the argument is simple.

    Most people don’t or can’t move due to tax so tax the fuckers anyway. Those that dare to move, tax those fuckers as well.

  2. You are wilfully misleading again, Worstall.

    The premise is that when a small tax rise is mentioned then a predictable and orchestrated PR machine rolls up and claims that the rise will sound the death knell of everything as all these rich folk, y’know, the wealth creators (!), will up sticks and go elsewhere. Leaving the space they vacate full of drug addicted feral children and hopeless baby machine and the like.

    The fact is, those that do move would have moved anyway. The very few that concern themselves with a small rise in tax (see Guy Hands in Guernsey – he can’t even visit his wife and kids in the UK because of his deluded dogma) are simply laughable.

    It’s not a ‘belief’ that ‘nobody’ moves, it’s just a statistic that the doomsday scenario that right-wing shysters expensively sell to the media is cobblers. And they know it. It’s pure lobbying.

  3. If he had done his homework, he might recall that paper showing the impact of state income tax policy on NBA franchise success. Because rich basketball players *can* move easily, they tend to navigate partly towards franchises in states with lower taxes.

  4. Bread and circuses.

    Oh, go on. Explain the relevance of that remark? The quote was originally and is still usually applied to political appeasement of the mob. Which has nothing to do with what is being discussed here.

  5. Tim

    You are looking in the wrong place for logic – Californa is also a terrible example for him to use, being the second largest contiguous state – Tricky for people to commute in from Nevada or Oregon when driving distances are so great but it s true there are enough Airports with Private jet facilities in both Cal. And Nevada at the hyper wealthy might indeed hop over to Las Vegas and Reno if California raises taxes by too much!

    I happen to agree, at least in part, with One point Arnie makes, albeit not quite the fashion he makes it. The number of people moving to, for example, Switzerland following the introduction of the 50% rate was nowhere near as great as certain elements in the press would have us believe, partly because the other attractions in London outweighed the financial gain of going to Zug or Zurich.

    However, Arnie, surely there comes a tipping point? If taxes for the wealthy hit 1979 rates, the prospect exists for people to go to tax havens to escape them. And as Tim says, if ‘Secrecy jurisdictions’ (to use Murphy’s parlance) aren’t a problem for tax collectors, why does he bang on about the need to curtail their activities so incessantly?

  6. @ SE
    Ah, but it does have relevance.
    Murphy is trying to stir up a mob demanding hand-outs from taxes extracted from “the rich” in just the fashion that the Roman Emperors used to give free bread and entertainment to Rome’s city mob out of taxes extracted from the provinces

  7. I’ve just seen the Original post and the level of profound ignorance it displays is quite staggering, even by Ritchie’s standards. I appreciate you don’t want to use a direct link to his blog because it’ll increase his exposure?

    The poster linked to is truly a terrible example. It cites the three states with the highest proportion of millionaires as Connecticut, New Jersey and New York (true enough) and counterposes that with three states with lower tax rates, Texas, Florida and Nevada. Even the most purblind Murphy supporter would probably have heard of a Salk area called ‘Wall Street’ – as someone who works in the Logistics industry, I’d be delighted to move to any of th three states mentioned (Tx., Fla, Nev) but with a wife working in Financial Services, it’s quite tricky to commute from Dallas, Miami or Las Vegas every day to Downtown Manhattan!

    And I also like the basic use of a variation of the ‘You’re wrong’ argument:

    ‘Let’s ay that

  8. Bloody iphone again!

    Last para

    And I also like the use ofa variation of the ‘You’re wrong’ argument:

    ‘Shall we lay that myth to rest then?’

    Which the man himself, as both Christie and Frances point out, decries as ‘Right wing trolling’ when accurately put by commentators to many of his numerous examples of speciousness.

  9. Secrecy Jurisdictions are a problem for tax collectors. the point being made is that people don’t like physically moving. But what they do is to create artificial conduits that make their wealth move jurisdiction. That’s an abuse. yeah you can call it legal all you like, but laws can change, and if the UK is made better by people paying what they logically should – make money from the UK, pay its tax – then what is the problem?

    Make abusive avoidance illegal – evasion – and that would put everyone in the same boat.

    And yeah I know you all think tax is theft, the fact you’re alive now is due to tax. Unless you’re some freak.

  10. “the fact you’re alive now is due to tax. Unless you’re some freak.”

    “And yeah I know you all think tax is theft, the fact you’re alive now is due to tax.”

    Ooh, a category error so profound it actually makes me wince. Leaving aside the fact that I’m not certain Tim does think that *all* taxation is theft, the alternative is not “no taxation and therefore no services” but “private provision”. Viz the alternative is not “no hospitals, police, defence, roads or schools &c” (which I assume is the basis of your “being alive now” comment) but “private provision of &c &c.”

    In any case, do you think taxation co-dates the human race? What an odd notion.

  11. Arnald

    I was going to compliment you on that post because it actually explains rather less vitriolically than he normally does, one of Murphy’s central points, that people are using tax havens and getting round the residency rules. The last paragraph spoilt it somewhat but otherwise the basic argument I can empathise with.

    The problem is that as you point out, these ‘abuses’ are currently legal. By all means change the law but then don’t be surprised if people actually physically go off to Switzerland or Dubai rather than sit around waiting to be fleeced. Or alternatively that their accountants who are paid better than their HMRC counterparts ind new loopholes for the ultra rich to exploit.

    I don’t know many on here that would advocate a tax rate of absolute zero ( A classic Straw Man) but I do think the government has expandedwell beyond what it’s remit shoud be and the idea that in a budget of over £600 billion no savings can be found is comical.

  12. @SE

    actually, “panem et circenses” accurately describes everything Murphy says and all of his little cohorts in the Occupy movement (especially them) &c. There is no way you could run an economy on his lines (states that have tried have rather notably failed on their arses) and so all it amounts to is him saying populist things that amount to little more than “rich people are bad! Poor people are good! Four-legs-good-two-legs-bad!” over and over again with a bit of maths, or rather “maths”, thrown around to confuse the hard-of-thinking and suggest that he knows whereof he talks.

    The occupy movement was the best example of a circus I’ve ever seen, it was positively Bakhtinian in its carnival level of protest. Achieved precisely f***-all because it had precisely f***-all realisable aims and precisely f***-all understanding of how to achieve the unrealisable objectives it claimed. But, you know, it meant some right-on student moonbats could camp under police protection for the Christmas vac and then go back to Exeter and tell everyone how they totally met a homeless person and he, like, had some really interesting ideas?

  13. Sam

    As an NYC resident, the Occupy movement had one positive side effect. The children of many Staten Island and Bronx Police will be on their way to college with healthy funds due to the sheer amount of overtime those guys were able to rack up policing ( and sometimes cracking the heads) of the ‘protestors’ – Ordinary taxpayers find it rather less funny.

  14. And yeah I know you all think tax is theft, the fact you’re alive now is due to tax. Unless you’re some freak.

    One of Arnald’s more bizarre comments.

    The reason that I am alive now is that my mother and father sustained me through my minority until I became an adult.

    Yes I did benefit from state education, which my parents more than paid for with a lifetime of taxes.

    If the state hadn’t paid for my schooling then it would have been achieved some other way and presumably my mother and father would have paid less tax.

    You really are a cretin Arnald, what’s wrong, not enough child abuse in the Channel Islands anymore, so you decide to come here and annoy us libertarians?

  15. Doesn’t Arnald’s point about Guys Hands agree entirely with Tim?
    Ok, it may be laughable that Mr Hands moved to Guernsey, that he doesn’t see his wife & kids etc, all for a “small” change in tax.
    But the fact is, he did.
    So the UK now collect c50% of zero, whereas Guernsey collects 20% (I think) of his (considerable) income.
    It does not take many rich people to move to lower tax take.

  16. The arguments that a 50p tax rate would send the rich overseas immediately was always hyperbolic.

    Most well-paid bankers or lawyers have a house, a family and commitments in the UK and the disruptions involved in moving to Dubai or Singapore are often not worth the financial gain.

    The impact of higher taxes comes more gradually. It’s the American banker given the option of setting up a desk in London or Dubai and deciding on Dubai. It’s the footloose juniors and middle rankers (pre settling down with a family) gradually drifting off to the Far East.

  17. @portemat

    Somewhat ironically Hands made a massive loss last year and so won’t be paying any tax to anyone.

  18. As I was born before the NHS was created and have had no life-threatening diseases relieved thereby since then, nor been saved by a fireman, nor been protected by the police, and the Argentineans didn’t even plan to come within 5,000 miles of me, I can categorically state that Arnald is lying as usual.

  19. It is in fact true that most pople would be alive even if there had been no tax. It is the rare individual who has benefitted from the collective insurance of the state safety net sufficient to validate the idea that one would be alive only due to taxes. (These individuals exist, just not that many of them).

    It is a sad reality that the mentally challenged left cannot understand that “you didnt build that” is a foolish sentiment that assumes that without a state there would be no insurance or common provision.

    It should also be noted that social insurance and some level of income redistribution is desirable (if one goes back to Rawlesian first principles), although it is unclear that the state should necessarily be the provider of many services – I am not in favour of state provision of schools, but unlike many on here, I am (on balance) in favour of the provision of healthcare by the state.

  20. Is moving to avoid taxation significantly different in some way to any other form of economic migration? Must tell all those Mexicans in the US that economic migration doesn’t happen.

  21. And I’m not allowed hyperbole?

    Dave

    Yes it is. Only the rich can afford migration for tax purposes, it’s usually done through lawyers and accountants. Individuals don’t much like upping sticks.

    Corps don’t usually move around very often, physically.

    So the poor escaping one country to earn a bit more of a pittance in another is survival, not a political gesture (which is what someone like Hands did).

    portemat

    There were a few people that moved. Hands moved because he’s a prima donna, despite having made his original cash selling state assets. Anyone moving and then barring themselves from their family is odd.

  22. What Shinisei67 said. Few people I know move abroad in response to new tax laws, but a lot of people (me included) decided to move abroad on the basis of, amongst many other things, tax rates. Had I been set up with a family and house in the UK when opportunity came knocking I’d probably not have gone, but the fact is I wasn’t and so I left quite easily. It won’t be today’s rich who leave the UK to avoid paying taxes, it will be tomorrow’s rich, who won’t be rich when they leave.

  23. Man’s an imbecile. The classic migration is US professional golfers who live where their parents live while they are at college and earning bugger all and as soon as they turn pro, move to Florida to escape state income tax.

  24. Dennis The Peasant

    “And yeah I know you all think tax is theft, the fact you’re alive now is due to tax.”

    Or as Barack Obama would say, “You didn’t screw that.”

  25. Arnald, the “And yeah I know you all think tax is theft” was normal hyperbole as virtually no-one thinks tax is, per se, theft but many of us have pointed out that some of Murphy’s suggestions are actually theft. The claim that “the fact you’re alive now is due to tax” sounded like standard hard-left lying propaganda. As you are addicted to lying it was beyond the normal human being’s capacity to identify that this was an exception and that you were attempting hyperbole. Especially as only an idiot, or someone brainwashed, would believe anything so close to that lie as to enable him/her to use it as hyperbole.

  26. I think you’ll find that some commentators on here have said that tax is theft and that there is moral obligation to try and not pay tax.

    Which is demented.

    Addicted to lying, eh? Quite the psychologist, are we?

    I don’t know if you were born in a hospital, or maybe a midwife helped. My children were both born premature and would have died without the NHS. We couldn’t afford US style insurance. So I can happily say that without the NHS my kids would have died. Thanks for asking.

  27. “I can happily say that without the NHS my kids would have died.”

    OK, and where does that become an argument in favour of the NHS?

  28. Tax is theft.

    It isn’t voluntary, you’re forced to pay under the threat of violence.

    “The state is a gang of thieves writ large” Murray Rothbard.

  29. The deficit is not because rich people don’t pay enoough tax, it is because the governmnet spends too much on things that either don’t work or make things worse than they already are. The straw man alwyas has us cutting the bits of public expenditure we value and ignoring the vast hinterland of wasteful nonsense……Milliband saying that a cut to 45p top rate is equivalent to writing a £40k cheque to millionaires sums up the attitude that it is ALL their money and they decide how much of it we can have back. Tossers.

  30. Arnald

    Even in the USA (Murphy’s bête noire in the field of Healthcare) , the poor still get some form of treatment. Are you saying the NHS is the only acceptable form of Healthcare? What of:

    France, Germany, Italy, Norway, Sweden, Switzerland, Denmark, Finland, Poland, Slovenia, Estonia, Canada, New Zealand, Australia, South Korea, Singapore , Japan…. (add to the list as you see fit)

    By the way, I’m glad your children survived premature birth and much kudos to the NHS for saving them. I hope they are all well now.

  31. Thank you, sir.

    I’m not saying the NHS is the only acceptable form, but it was there. As were the stuff that we usually take granted that makes our lives easier and facilitates our progress.

    To dismiss that outright means dismissing generations of toil that has ultimately benefitted us right here, right now.

    Yep, my children are thriving in state education and I’m proud to support the institution, and the theory generally. It’s patriotic, don’t you know.

  32. @ Arnald
    As you were talking about me, I did not go into a discussion about you. Obviously a miserable failing, for which I apologise.
    You stated that I believed tax is theft. You stated that I was alive due to tax. I stated that these were lies, as I have previously stated that I am willing to pay tax, and scrupulously do, and that I found Brown’s inconsistent tax regulations offensively burdensome; also that free hospitals existed long before 1948 and that I support social housing, subsidised out of taxes for the poor but not for Frank Dobson, Bob Crow and other socialist fat cats.
    What is the relevance of your ignorance that most hospitals (at least those in London) were built as acts of charity and provided free treatment to the poor to my beliefs about taxation or my personal survival? NONE.
    I do not *need* to be a psychologist, I merely observe your behaviour with distaste.

  33. Arnald

    “Thank you Sir–” either he’s on valium or he’s been collectivised and is now several different people.

  34. Incidentally, I do support the NHS – it is just that I have been appalled by its management for the last twenty-odd years – and my family opted-in to the NHS on a point of principle (in 1948 they could afford to make the choice thirty years later we could not have). Run properly it should be more cost-effective, as well as better for the poor, than insurance-based systems. However my children, who were not premature, nearly *did* die at birth thanks to the NHS.

  35. Arnald

    I agree that there are certain things we shouldn’t take for granted, including the NHS, but we need to look at how affordable it is in the long term and issues such as health tourism which in London is a massive problem. If funding a National Health Service is tricky, an international Health Service is even more so I’d hazard! ( I doubt the incidence of ahealth tourism has decreased since I was in the Capital) – To use what the Mail calls ‘Schools’n’ hospitals’ is a slightly misleading argument when one is defending the huge increase in Public Expenditure over the 1997 – 2010 period. There are significant layers of bureaucracy within most Public Sector enterprises which could be Removed without, I think, damaging the outcomes, and one or two enterprises that could be curtailed completely with no noticeable impact on societal well being.

  36. There seems to be a presumption post my comment #6 that Arnald was actually supporting Tim in his criticism of Ritchie. I’ll stick with the null hypothesis, thanks, that Arnald is talking bollocks as usual.

    I’ll note that he hasn’t, to date, bothered to address the query, himself.

  37. SE
    It was in response to basketball players (yay! on my tv!) and with the taxes they don’t pay, we can just about beg for food stamps but yay! Sport! I’m proud of rich non-taxed sports folk. It’s patriotic, right?

    I would have explained at length but I figured pretty fast that there is no imagination for deliberately turning a phrase. And now I haven’t done it justice.

  38. Professional Basketball players
    NHS
    Different countries
    So patriotism?
    Arnald is a patriotic American living and working in Guernsey whose children were born in NHS facilities in the UK who feels that everyone on this thread – except me – wishes to avoid taxes at a far higher rate than he is paying in Guernsey and so are totally immoral because their life (but not mine) depends on taxes.
    Or have I missed something?

  39. For those who had not noticed about 98% of sportsmen and women actually pay modest sums in order to train and compete (riders and yachtsmen pay vast sums). HMRC has not yet offered me tax relief (nor Gift Aid on my subscription because the hassle of claiming exceeds the value to my very-much-community sports club).
    Rich sportsmen fall into two categories – Wayne Rooney et al who have been encouraged by Brown to avoid tax by investing in film schemes and yachtsmen/polo players/show jumpers who spend far more money on sport than they receive.

  40. So Much For Subtlety

    In the modern world, things have not got too bad yet so we most pick on the rich and drive them into a tax haven. But in the past it did not always work that way. After all, Venice was a settlement of poor peasants fleeing tax collectors on the mainland. No doubt Ritchie thinks they should have stayed serfs and laboured the right number of days a week for their lords.

  41. So Pus For Pus

    I hardly think serfdom sits well with being a social democrat.

    Or is it that you think the word “social” automatically makes them a communist or tyrant in your pathetically narrow view?

  42. “It’s fairly easy to move in the US. But people don’t.”

    A little late, but:

    “For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.”

    “destination states favored by Californians have lower taxes”

    ““Californians have tended to flee high taxes for low ones.””

    http://www.manhattan-institute.org/html/cr_71.htm

  43. So Much For Subtlety

    Arnald – “I hardly think serfdom sits well with being a social democrat.”

    Your views on anything hardly amount to much. I doubt anyone would believe you if you asserted the capital of Guernsey was Saint Peter’s Port.

    However, there is a degree of overlap among the two. And pointing out where the welfare state leads has a long and pretty much utterly unrefuted history. As you should know. But obviously do not.

    “Or is it that you think the word “social” automatically makes them a communist or tyrant in your pathetically narrow view?”

    No.

  44. Pingback: FCAblog » Millionaires, taxes and mobility

  45. I live in the corner of Utah closest to California. Most of our immigrants are from southern California. Pretty much every single one of them mentions either taxes or not getting what they paid for out of government as their reason for leaving.

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