May 2013

What larks with this FTT, eh?

However, the EU splinter group is now said to be considering reducing the tax rate on equity and debt, and imposing the levy solely on shares from next year. An FTT on bonds might not be introduced until 2016, and the planned levy on derivatives could be dropped altogether. The annual revenues might fall to as little as €3.5bn.

“The whole thing will have to be changed quite a lot,” an official close to the negotiations told Reuters. “It is not going to survive in its current form. You can introduce it on a staggered basis. We start with the lowest rate of tax [0.01pc] and increase it bit by bit.”

Even the politicians are waking up to what a disaster the full FTT will be.

Remember folks, you read it all here first.

And this is bollocks about booze costs as well

The number of drugs prescribed to treat alcoholism has increased by almost 75 per cent in less than a decade, new figures show.

A goodly part of which is that we now use drugs as a treatment for alcoholism more than we used to. Medical treatments do change over time.

Almost £3 million was spent by the NHS last year on drugs to treat such problems, including Antabuse, which causes nausea and vomiting when alcohol is consumed

It\’s still a pittance compared to the £8 billion in tax that booze brings in.

In 2011/12, there were 1,220,300 hospital admissions in England attributed to drinking – a sharp increase from 2002/03, when the figure stood at 510,700.

We\’ve changed the method of calculating what is a \”booze admission\” over that time.

Plus, of course, the number of admissions to hosptials has risen over that time. Substantially, too.

But never mind, this will do its job. That the bill for anti-booze drugs is still smaller than the DoH mineral water bill can be used to scream that there must be more restrictions on people supping a pint or two of an evening. Which is the point here, nothing else.

Pure fucking bollocks about child pornography

Well, we knew this sort of tossery was going to happen, didn\’t we? Always does:

As Mark Bridger was jailed for life for the abduction and murder of five-year-old April Jones, the NSPCC said there was a “worrying link” between his looking at indecent images online and the crime he went on to commit.

It called for “effective measures” to curb the ease with which extreme pornography and indecent images of children can be accessed.
Tonight Phillip Noyes, the acting chief executive of the NSPCC, said: “It seems Bridger lived in a fantasy world which included looking at child abuse images online.

“For some time we have been concerned about the growing number of these obscene images which are becoming more easily available and can fuel the fantasies of offenders like Bridger.

“This case points to the ever-growing evidence that there is a worrying link between looking at this vile kind of material and committing other serious sexual assaults. April’s death will hopefully lead to effective measures to stamp out this vile trade.”

Child protection charities say that web companies could introduce online warnings, threatening possible prosecution when users attempt to access explicit sites.

There have been calls for Google to introduce their “safe search” option as a default setting, which would automatically block hard-core pornography and make it far more difficult for children to access accidentally. The current default setting, “moderate”, does not.

John Carr, the government’s adviser on internet safety and secretary of a children’s charities coalition on the subject, has said: “Google can do more and should do more.”

Peter Davies, the chief executive of the Child Exploitation and Online Protection Centre (CEOP), also warned of a link between extreme pornography and those who went on to abuse children.

He said: “The viewing of indecent images of children can lead to an escalation in offending, resulting in the offender committing contact child sexual offences.

“In other cases, such images will be viewed once contact offending has begun or even used by offenders as part of the process of grooming a child for abuse.”

Child porn and, I think at least, extremely violent porn, are already illegal. With large sentences for their possession and creation. So making them \”more illegal\” ain\’t going to do much.

But there\’s a much worse logical problem here.

That people who are interested in child pornography are intereswted in the subject of sex with children is obvious. But the assumption being made here is that more child pornography leads to more sex with children: and that\’s almost certainly not true.

The question is, as economists would frame it, is child porno a subsititute for child sex or a complement to it? Does the existence of child porno lead to more or less child sex?

Does someone viewing child porno think, ooooh, that\’s nice, I\’ll go get me some of that in real life? Or does wanking into a stupor over child porno mean the local anklebiters are safer?

We don\’t actually know about child porno: but we do about porn in general. I think we\’d all agree that porn has become huigely more accessible in recent decades. It\’s what the internet was invented for of course (and once someone starts making LoLcatporn it will collapse under its own weight). But one of the other great features of the past few decades has been the rapid and massive fall in rape and other serious crimes of sexual violence. (Do remember that we\’ve also had, concurrently, a huge rise in the reporting rate as the shame of being a victim is stripped away. So the fall is larger than straight reporting rates would say.)

So much so that several studies have been done over in the US. Tracking broadband rollout across States. And checking them against the falls in sexual violence. And yes indeed, it really does appear that widespread and easy access to porn reduces the level of sexual violence.

Now, this does not mean that everyone who see the piccies then forswears the activity. There will undoubtedly be some whose behaviour is prompted by the sights. But we\’re talking public policy here: we want to know what is the general, the average effect. And with porn it really is that the more of it there is then the lower the sexual violence rate.

As I say, we don\’t know about child porn for (at least as far as I know) no one has looked at it. But there\’s at least a very strong indeed inference that more child porn will lead to less child molestation. For porn is a substitute, not a complement, to active sexual activity on average.

All of which, if true, means that in order to keep the kiddies safe we should be subsidising the production of child porn, not banning it.

Presumably using CGI of course.

Electronics engineer talks corporate taxes

Mr Wozniak, who said he originally helped set up Apple to \”empower the little guy\”, said it was \”really not fair\” that companies are not treated the same as people by tax authorities.

\”People are not taxed on profit; they are taxed on income,\” he said. \”Corporations should be taxed the same as people, in my mind that is how it should be, that would make things fair and right.

\”That means corporations pay taxes on all of their revenues or people only pay it on a tiny amount called profit and until we rectify that, the whole problem is just with us forever.

\”That is why the rich get richer and the poor get poorer and I am always for the individual being much more important than their training; same reason I created the Apple computer at the start, it was to empower the little guy.

\”Why do businessmen get to write off lunches and cars? If normal people did they would have more savings.

\”That is really not fair, that businesses are not treated the same as people.

\”A person would say, \’my life is my business and I have to pay for my home, pay for my clothes, my food and what is left over if I make a little money some year and put it in savings, that is my profit\’, but people are not taxed on profit, they are taxed on income.\”

Not really going to work, is it?

A low margin company (say, a retailer) would be wiped out by an income tax, while a high margin one (oooh, say, Apple) wouldn\’t give a toss.

Bloomberg might have something just a little wrong here, you know?


The caption on this picture is:

\”An Alcoa Inc. employee changes the glowing hot carbon anode of an electrolytic cell at the company\’s Mt. Holly production plant in Goose Creek, South Carolina. \”

Erm, anodes line the electrolytic cell. Thy\’re not thick blocks like that.

That glowing bit is the sow of aluminium itself.

Just as a check: carbon that is hot enough to glow like that is what…..burning I think we call it?

Update: and guess what? It\’s me that has it wrong. There\’s a surprise, eh? Alcoa tweeted me to point out that I was wrong so clearly this blog is read is high places (says he, desperately trying to find something positive here).

This German efficiency lark

It takes 10 days just to get an appointment to see the notary to start the company formation process.

I can incorporate in the UK in 15 minutes online.


And, joyously, I sent them an email to ask for an appointment. The secretary said she had \”printed it out and given it to the notary but had not had his reply as yet\”.

The PanzerGruppen would have been ready to roll sometime in 1957 under this system.

Not having a son I can\’t be quite this vehement

I’ve made it crystal clear to my son that if any government ever attempts to conscript him – no matter the purpose, no matter the circumstances, no matter the conditions, and no matter the promised duration – I will literally fight to the death, if necessary, to prevent his enslavement. He is not – just as no one else is – born to serve any government.

But as
Haldane pointed out, I might for two brothers or eight cousins.

@RichardJMurphy insists that Richard Brooks must stop writing for Private Eye

Courageous States would stop top civil servants selling their secrets to the private sector.

That does pretty much screw over Richard Brooks then, doesn\’t it? I mean, there he was, senior tax inspector and off he goes and starts selling that knowledge to a muck raking magazine. This is selling secrets to the private sector is it not?

And John Christensen is fucked as well: wasn\’t he an advisor to Jersey or summat who then used the knowledge he gained there to turn?

It\’ll be an interesting place this Courageous State, won\’t it?

Bill McKibben doesn\’t really understand this markets stuff, does he?

We know roughly how much more carbon we can emit before we go past two degrees: about 500 billion tons. And at current rates of emissions, that will take us less than 40 years. But the math gets really impossible when you consider how much carbon the world’s coal, oil and gas industries already have in their reserves. That number is about 2,800 gigatons – five times what the most conservative governments and scientists on earth say would be safe to burn.

And yet, companies will dig it up and burn it – that’s what their business plans call for, that’s what their share prices depend on, and that’s what their government lobbying budgets are spent on making sure happens. Once you know the maths, you know that Exxon, Rio Tinto and Shell and so on aren’t like normal companies – they’re really rogues.


It can indeed be true that a company produces something because its business plan says to. But that\’s not the determinant of whether the thing gets produced. What does determine it is whether anyone wants to purchase or use what is produced.

The problem with climate change is not that companies try to force emitting fuels down our throats. It\’s that we, when looking at the available alternatives to cook our dinner shoose to use fossil fuels.

The problem is not, as Willy S near pointed out, in the corporates nor the stars: it is in us.

It appears that we\’ve an efficient system for deciding between tax compliance and tax evasion

The Chancellor said he is changing tax laws to prevent companies making the claims, which involve seeking tax relief on money spent not by them but by their customers.

Such claims are “completely unacceptable”, Mr Osborne said.

The utility firms’ controversial claims for capital allowances relate to changes or improvements made to gas or electricity supply lines to businesses.

Suppliers typically require customers to pay towards the cost of such changes. But the Treasury said that some energy companies have been making claims for tax relief on costs met by customers.

Since January this year, companies have sought to make new capital allowance claims worth £50 million, the Treasury said. If those claims had succeeded, the firms might have been able to claim up to £900 million on historic projects, the Treasury said.

None of the claims have yet been accepted, meaning taxpayers have not yet incurred any costs.

People attempt
to avoid and then get told whether that attempt will be allowed or not. All such attempts therefore become either tax compliance (obeying the law) or tax evasion (not obeying it).

Seems pretty simple really.

Isn\’t this just the most amazing surprise?

Women continue to be judged by their looks, Clare Balding warns
Women in television are judged by their looks while men are judged by their voices, Clare Balding has warned as she said this is having a \”pervasive\” effect on society.

Astonishing, in a mammalian species reproduciong by sex there\’s a difference in the way that the two sexes are perceived.

God really was such a bastard when he thought this one up, wasn\’t he?

What is Ritchie talking about here?

Yes doctors are well paid. But very, very many of them wonder whether it is worth it as they get older. One reason their pension fund is so over-funded is their low life expectancy.

Doctors have a lower life span than the average population?

That\’s piffle.

Anyone capable of coming up with a construction in which Ritchie\’s statement is not piffle?

Radioactive belts

Oh dear.

A batch of metal-studded belts sold by online fashion retailer Asos have been hurriedly withdrawn from sale after they were found to be radioactive.

The peplum leather belts, which have a ruffle attached, could cause injury to the wearer if worn for more than 500 hours, according to an internal report by the retailer. They are being held in a radioactive storage facility after testing positive for Cobalt-60.

Oh dearie me:

It added: \”Unfortunately, this incident is quite a common occurrence. India and the far east are large consumers of scrap metal for their home and foreign markets. During the refining process of these metals, orphaned radioactive sources are sometimes accidentally melted at the same time. This in turn [contaminates the process] and traps the radioactivity in the metal as an alloy or in suspension.\”

It\’s not actually that common. It is a result of extremely bad handling of scrap back at the scrap mill that made the original brass though.

1) There shouldn\’t be any cobalt in brass at all. Cobalt is vastly more valuable than any of the ingredients of brass: so someone, somewhere, wasn\’t sorting material properly in this sense, taking the valuable stuff out of the less valuable.

2) C-60 is a radiation source for hospitals and food irradiation. There\’s no way at all that it should end up in the scrap chain. Vastly dangerous to anyone who tries to handle it: should be segregated and kept in the lead boxes. Whoever comes out to fill up the machine with fresh stuff should be taking the old away with them.

3) No one but an idiot doesn\’t check the radioactivity of incoming metal. Clearly someone didn\’t so there\’s an idiot running a scrap yard/furnace out there.

4) The reason is that having melted down some Co-60 in his furnace to make some brass his furnace is now contaminated. He\’s have to scrap it: for all subsequent melts will also be contaiminated.

5) It\’s a bit tough to blame the belt maker for this. Whoever fucked up it was long before anyone started thinking about belts.

Crack Down on the Tax Evaders!

Here we see the results of Richard Murphy\’s insistence that we should be cracking down on the tax evaders:

The letter was polite enough. “Could we come and look at your books,” was the message from the tax authorities to Sawbridgeworth Cricket Club in Hertfordshire.

Tax inspectors spent almost five hours going through the club’s neat and detailed accounts, asking questions about payments to staff. The result was a bill for £14,403, an assessment of what the 151-year-old club owed the Exchequer in untaxed earnings of bar staff, accommodation and perks for professionals and a series of other items dating back to 2008.

Val Waring, chairman of the club, which plays in Division 2 East in the Home Counties Premier League, was stunned when the bill arrived.

“I thought the club might have to close and that would have been a disaster,” she recalls.

Similar scenes are being played out at minor cricket clubs throughout the country as HM Revenue & Customs teams extend inquiries down to the grassroots of the summer game.

For this is where that tax evasion goes on. Among the small clubs, the small trades, the little platoons of society.

Yup, there\’s nothing more important than having HMRC trawling the books of the local cricket club. And the Mothers\’ Union (all those speakers\’ fees) and the Rotary Clubs and the ……well, you get the picture. This is indeed that grey economy, where people are doing entirely legal things but not marking every jot and tittle of the tax code.

Myself I rather tend to the idea that there\’s filters too fine to be used in a decent society. There\’s a level at which you simply say, yup, some people aren\’t paying all the tax legally owed. So what?

Mike Down, head of the tax risk and investigation management group at tax advisers Baker Tilly, feels HMRC is taking a tougher line. “We are finding that, as well as pursuing past years’ tax liabilities, they are pressuring clubs by seeking up to six years back-tax and charging penalties.”

It\’s a purely personal; thing of course but perhaps that filter that\’s being applied there is sieving too small?

Richard Murphy\’s quite right. This is disgusting and must be stopped

Richard Murphy, of Tax Research UK, called the latest switch from the private sector to the state “the creeping control of the state by the big business elite”.

He said: “We’ve had people who are very senior who have moved over to the state, but never the very top.\”

I share the outrage. It is appalling that people come in from the Big 4 Tax Dodgers and then conspire with their former employers to crush the democratic will of the people by occupying important positions in government.

For example, Margaret, Lady Hodge, is now chairman of the Public Accounts Committee: after a thorough training by her masters at Price Waterhouse in the 90s.

It\’s disgusting, isn\’t it, shouldn\’t be allowed.

In my opinion, of course.

Did an economist really just say this?

Actually, did a Nobel Laureate economist just say this?

It is not even true that higher corporate tax rates would necessarily significantly decrease investment. As Apple has shown, it can finance anything it wants to with debt – including paying dividends, another ploy to avoid paying their fair share of taxes. But interest payments are tax deductible – which means that to the extent that investment is debt-financed, the cost of capital and returns are both changed commensurately, with no adverse effect on investment.


Interest income is taxed at the level of the recipient. Thus the tax charged does indeed change the willingness of the lender to lend. Investment is indeed affected by such taxation therefore.

That interest is untaxed at the corporate level might change the actions of the corporate: but that it is taxed elsewhere means that there is still a change in the amount of investment.

Seriouly, how can anyone say that the imposition of a tax doesn\’t change behaviour? Let alone a Nobel Laureate?