Fascinating with the Murphmonster

So a comment over there gets his teeth into him.

No I’m sorry, following your logic benefit fraud cannot, simply cannot be only £1.5 billion, not if it is “the most important factor determining the size of the informal economy”. There cannot be £60-70 billion of tax evasion driven by the desire not to lose benefits if that loss would only be £1.5 billion.

And you cannot claim with regard to the level of benefit fraud “I engage with what the government says it is” when you make it quite clear over many years that you do not believe the gov’t\’s figures on the tax gap etc.

For what it’s worth I wholly share (as do you) the report’s analysis that the high effective marginal rates suffered by the low paid is driving much if not most of the shadow economy. So reducing these would increase tax compliance, as it would for higher income individuals, non-doms, corporates, everyone in fact.

Just to expand this. The Murph is shouting that the IEA agrees with his £70 billion estimate of the tax evasion going on. For the record, I\’m sure that it\’s in that general region. This being because the Murph\’s original estimate was using a decent data source instead of just makin\’ stuff up.

We all also agree that the tax evasion stuff is not large corporates and the rich. This is the cash for no VAT economy: it\’s hundreds of pounds to a couple of k by many millions of people. Who checks paper boys for income tax for example? And is there any way in which we could remain even a modestly free or liberal society if government were to take the powers (or enfirce those it has) to beat this?

Which is where Ironman does his twist. The benefits fraud bill is said to be £1.5 billion, as Murph constantly reminds us. But much of that tax evasion is driven by not declaring income so as to continue to gain benefits. £30 for cleaning the loos of the grand lady down the street: who thinks that gets reported so that housing benefit will get cut? And there won\’t be £70 billion of tax dodging going on in order to retain £1.5 billion in benefits. Therefore the benefits fraud bill must be much higher than that if the tax evasion number is true. Precisely and exactly because people are tax evading in order to maintain access to benefits.

The Murph doesn\’t want to hear this of course.

12 thoughts on “Fascinating with the Murphmonster”

  1. Even I was flabbergasted by Murphy’s gall in claiming that this figure meant his numbers (which he claims neo-liberals scoffed at) had been vindicated.

    His tax gap is entirely tax havens, bankers, neo-liberals etc.

    The IEA says it is predominantly VAT avoidance by tradesmen and cash-in-handers. And all the other stuff like today’s annoucement that 8 billion fags are smuggled into the UK every year resulting in a loss to HMRC of £2bn.

    One wonders how many UKUncutters protesting outsoide TopShop or Vodafone have ever bought a cheap pack of ciggies with Cyrillic script from a bloke down the pub.

  2. The Thought Gang

    @ Shinsei

    The last time I checked, the bulk of his evasion was from the million or so companies who don’t file their paperwork at HMRC/Co House.

    He assumed a comedic level of economic activity (and, by extension, tax evaded) from them.

    Do we think he’s now saying that the black/grey economy is all in those companies? Because the people involved in those activities will, of course, all register ltd companies to do so.

  3. I really would urge you to read it to the bitter end, because you get the glorious sight of Ritchie finally standing on his head, utterly denying what he had already declared to be true and then denouncing the entire string as nonsense (which to fair, it was; well, his part).

    Then I got banned.

  4. I’ll read this later but, very briefly, I am struggling to see how GBP 70 billion evasion is mainly small stuff?

    Ie, GBP 50 billion would need say 5 million people evading GBP 10,000 of tax on say GBP 25,000 of income (average of 40% tax and NI as per the report) per annum? I’ve no idea, but is that realistic?

  5. Is this wordpress problem part down to the browser / settings? I have always used Opera on here in the past and never had a problem with any symbols at all, whereas with the IE9 settings I am using now it’s rubbish! Even the arrow keys don’t fully work properly!

  6. PF, I use Google Chrome and can fix / avoid the issue by setting the encoding to Unicode rather than ISO 8859-1. It would be better if Tim could fix it at his end, of course.

  7. Ian, many thanks for that. I’ll look into it, though will probably simply load Opera onto this box, I prefer the control.

  8. Given that RM lives by the the maxim of if the facts don’t fit the theory, change the facts I can’t see a little thing like him being destroyed in argument changing anything. Not even his massive sense of self-regard. Indeed especially not &c

  9. Philip Scott Thomas

    …does Murphy not have a full stop on his keyboard?

    He is often guilty of punctuation avoidance, if not outright evasion, as well as violating not only the letter but the spirit of English grammar.

  10. I read to the end. It’s like arguing with a four year old, only with longer words.

    I mean Pellinor and Ironman used longer words.

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