On Ritchie’s Twitterstorm

This is really quite wonderful.



It’s a series of delusions. The end result of which Our Ritchie is a lone crusader holding out the torch of truth against the lies and dissimulations of the eeeevil neoliberals who now rule our world.

And there’s something of a problem with this. It’s not actually neoliberals who pointed out that companies don’t pay tax. The incidence is upon people, must be. And this is a result that comes from neoclassical economics: it was first pointed out and proven well over a century ago.

And we’ve all repeatedly pointed this out to Murphy. But he carries on insisting that it’s a plot, a plot against his Curajus State, to refer to this well known truth about the universe that we inhabit.

Companies do not bear the burden of corporation tax. Some combination of the shareholders and the workers in the economy where it is imposed do. Without understanding that basic point no one will ever be able to build a reasonable tax system.

Murphy’s problem is not just that he’s wrong, it’s that he’s deluded.

17 thoughts on “On Ritchie’s Twitterstorm”

  1. I know I’ve said it before, but I’ll say it again: this is borne from teenage conspiracy theory bullshit.

  2. Unfortunately for Ritchie it was on his blog where Howard Reed and I agreed that tax incidence was a matter of empirical observation; not simple theory. (I was happy to agree as implicit in this statement is the fact that it must land in more than one place, Q.E.D.)

    So actually Tim you’re wrong; Ritchie is indeed a lone crusader. ‘Lone’ because absolutely nobody agress with him.

  3. Is it (just) workers or shareholders? Could it be customers? Eg if footballers demand higher wages to
    compensate for tax and clubs put the ticket price up?

    Tim adds: We generally assume that it’s not customers. For we also generally assume that corporations are profit maximising. That they already gouge the maximum out of consumers that they can. So a change in their cost structure won’t change their pricing, as that is based upon the demand for their goods.

  4. Sorry, but i have to profoundly disagree with your addition, Tim
    That only works if you have somewhere else to go. With much of the financial service industry, there is nowhere else to go. Found that myself with the broker manages a portfolio I have a watching brief on. i know the fees are ridiculously high for the work involved ( I once did this job) But all the other people providing the service charge much the same. And I’m legally required to use the service. Options zero.
    It’ll be the same with an FTT. It’ll be passed on with weasel apologies. There’s simply no way the grasping bastards, who regulatory capture as a matter of course, will let it touch their own pockets.
    Until financial transactions can be done on Ebay, bollocks.

  5. Just to add to that last line.
    There’s a bit of software, currently being used in another field. (You know the one I mean, Tim) would have the potential to carry the world’s markets in anything anywhere. Peer-to-peer. The service could be provided for free to user. That’s what it costs now. Just sell advertising space to fund it.But it’ll never happen. Too many vested interests.
    You’re talking as if there’s no bottom line on financial service charges. The bottom lines’s Porches, 5 bed houses, yachts & the rest of the bling. Below that they will not go.

  6. For different reasons I am also unhappy with the idea of CT not being passed on to customers at all. Asan example Ritchie’s blog has direct quotes from traders (would be tenderers for public contracts in the case I have in mind) saying they are being undercut by tax avoiders.

    Obviously the beneficial incidence of a reduced tax (CT) burden is not the exact mirror of the incidence of a tax increase. However, isn’t there evidence here of different tax rates impacting on the consumer’s price?

  7. It’s not actually neoliberals who pointed out that companies don’t pay tax. The incidence is upon people, must be.

    That’s just a matter of definition. If you define “economic incidence” as being on the humans whose wealth is reduced by the tax, then of course tax incidence is always on people. Alternatively, if you allow corporate personhood, then tax incidence can be on corporations.

  8. “Murphy’s problem is not just that he’s wrong, it’s that he’s deluded.”

    No, Ritchie’s problem is that no-one would give him the time of day (or their money) if he admitted he’s simply an old-fashioned Nazi, so he has to lie and lie and lie.

  9. I had to admit, the rather desperate piece on his blog this morning almost had me feeling sorry for him. It was inadvertently hilarious seeing him chide the OCBT Don who treated this series of increasingly bizarre outpourings with less contempt than they probably deserved, but sufficient for his extreme sensitivity.

    ‘You could start with the patronising tone: that’s the Oxford Centre for Business Taxation all over. I have academics queuing up to tell me how offensive they find its tone to be. Civil society is treated, as in the article, as a bunch of simpletons to whom a few academic home truths need to be recounted’

    And this, a gem which will surely be the equivalent of a 24 Carat diamond when dredged up:

    ‘The fact that this argument is not considered makes clear there is nothing technical about this article.’

    As Gary, Ironman, Pellinor, Glendorran (to name but four great contributors here) or even Tim himself will attest – when has he ever considered an alternative opinion, no matter how reasonably presented?

    This, however, was the piece de resistance:

    ‘Unless, of course, she really does not know where it comes from. But in that case she (sic.) Oxford need to wonder why she has a chair.’

    evidently Oxford (and other institutions under ‘neoLiberal control’ will be forced to toe the line in the ‘Curajus state’. As several have posited here, one wonders if the man is not due a psychiatric evaluation – I think calling him deluded is being generous – psycopathic probably a more apt term…

  10. Dave – well said.

    I’m reminded of the Dad’s Army episode ‘The deadly attachment’ with Ritchie as the Uboat captain played by the late Philip Madoc ‘your name will also go on the list’….

  11. Van-P
    He gets worse by the day – have a look at a post by John D on his ‘China Explodes’ thread where John D explains why people have 3 debit cards in China & RM (who completely misunderstood the figures in his OP) sneers at him
    ‘Do you honestly think we can extrapolate from you?’

    And people who should know better are backing his Fair Tax Mark protection racket.

  12. I disagree with Tim’s answer to Luke since “profit maximising” is not the same as “revenue maximising” so if a tax per unit is added the break-even point on the supply-demand curve will change and the consumers will pay more per unit for a reduced supply.
    Yeah, Luke I agree with you for a change!

  13. Max

    ‘Backing it’ is too strong here. The. ICAEW has actually said that his Fair Tax Mark needs to be extended to unincorporated businesses (e.g limited partnerships) as well if the consumer is to distinguish between SMEs; Ritchie being the champion of the consumer of course. However, he doesn’t seem overly enthusiastic about the idea. I know, believe me, I’m as surprised as anyone!

  14. How could his limited partnership fail to get the mark? After all the assessors are how independent?

  15. So let me get this straight: RM, whose views are so outside the economics mainstream, claims that something from within that mainstream has no technical merit because it does not consider and accept his pov. This is evidence of a liberal conspiracy, despite the idea in question pre dating neoliberalism by many decades.

    He, however, refuses to accept or even consider any ideas other than his own, even when shown to be categorically wrong.

    High-functioning sociopath?

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