Ritchie is, in fact, insane, isn’t he?

Mr Murphy warned that the City’s power dated back to William the Conqueror and the Domesday Book.
“In 1066, William the Conqueror turns up on British shores, marches to London, declares himself the victor and makes peace with the City of London and asks for a loan,” he said. “He gets it, writes the Domesday book as his tax base and then goes out to recover the money through taxation to repay the City.
“That’s been the basis of power since 1066. Coming on for a thousand years, we’ve had this organisation holding this power over the government. There is quite literally a state within the state in the UK. We have a lord mayor for the City of London who has the ranking of a cabinet minister for international diplomacy purposes . . . [and an area] where the sovereign cannot go without permission.”

He’s swallowed all that guff that Nick Shaxson got wrong then.

He said that there should be tougher criminal penalties for bankers who were caught breaking the rules, adding that as much as £20 billion could be raised from a transaction tax on high-frequency trading.

And as I’ve been pointing out all along, an FTT would lose revenue, not collect it.

He said that the idea of a wealth tax had been made possible in the past five years by new tax transparency rules making it hard for UK citizens to hide their assets.
At least the first £1 million of someone’s wealth should be discounted from the tax, as well as pension pots, he said.
“Do I think it’s desirable? Yes, I do. “[A wealth tax] has to be 1 per cent or less . . . I wouldn’t necessarily exclude private companies and private shares. I don’t see why companies don’t become of public concern.”

And he’s obviously not caught up with optimal tax theory as yet…..

Mr Murphy said that threats by the very wealthy to leave the country to avoid taxes they did not like never materialised.

The brain drain never happened. Both Mick Jagger and Lewis Hamilton are still UK resident for tax purposes.

Despite his intellectual support for Mr Corbyn, Mr Murphy said that he would not sign up to back him in the leadership contest,

Well of course not. That would imperil his grant money, wouldn’t it?

29 thoughts on “Ritchie is, in fact, insane, isn’t he?”

  1. “we’ve had this organisation holding this power over the government.”

    Or, possibly, we’ve had many governments willing to max out the credit card in order to buy some votes. Potayto, potahto.

  2. It’s odd that the lunatic Left get so excited about the supposed ancient powers of the City of London, when all they are is a bit of ceremonial.

    Are they really going to stop the Queen coming in uninvited if she wants? Of course not. As for “ranking of a cabinet minister for international diplomacy”, that’s pure ceremonial – it doesn’t give him any actual power.

    The City has no more legal power than any local authority, and even those powers come from Parliament, so can be taken away by Parliament.

  3. Next we’ll hear that the Knights Templar never ended, it was just avoidance and that they act as the City’s secret international bankers.

  4. I just hope Murphy gets Corbyn to complain that UK groups of companies no longer get taxed on world-wide profits (as Murphy claims).

    That should help Corbyn’s credibility.

  5. “It’s odd that the lunatic Left get so excited about the supposed ancient powers of the City of London, when all they are is a bit of ceremonial.”

    That’s Shaxon and his bullshit Treasure Islands book that gets regurgitated by the left as fact. It’s even made it into the City of London Corporation and City Remembrancer Wikipedia articles. I note that when someone tries to correct this, they are ganged up on by other editors and shot down.

  6. Something I’ve never understood about wealth tax proposals and private companies. How are they going to be valued?

    A guy who owns a corner shop has some “wealth” from his ownership of that business, but quite how much? How is it going to be measured? Or someone who owns their own mobile hairdressing business.

    And then what if they’re a sole trader rather than work through a company? What about partnerships?

  7. MBE-

    I daresay it will be “assessed”. Which means if your startup is considered to be “worth” some value, but has no cash, you’ll be forced to liquidate enough of it to pay the tax. Same as if your house is deemed to be “worth” some amount.

    Not that this is like a recipe for disaster or anything.

  8. I’m particularly confused by the mobile hairdresser example. If she runs her business as a company then presumably she has “wealth”; if she runs her business as a sole trader then does she have “wealth” on a “discounted future cashflow” basis? And if so, don’t what about those people who are not sole traders, but regular employees. Don’t they also have future income streams we could discount to some kind of present-day wealth?

  9. “Despite his intellectual support for Mr Corbyn, Mr Murphy said that he would not sign up to back him in the leadership contest”,

    That’s right Richard. You’ll be there at his meetings, share a platform, form and boast about of course connections with Owen Jones. However, come the moment of accountability yoy will not support any party, have no official role in the campaign and feel very free to explain exactly why Corbyn didn’t really listen to you.

    Your whole life has been one long free ride hasn’t it.

  10. MBE-

    Indeed. This is a general part of the problem of value, and one which afflicts e.g. the land value tax as another example.

    The only “wealth” you can accurately measure in monetary terms is money itself. If Alice has £1M in the bank, she has £1M of wealth. Unless the bank collapses. But if you tax that, people will want to store their wealth as something else.

    If Alice has a house “valued” at £1M, that is “wealth”, but it has no actual measurable value until a sale transaction occurs; until then it’s just speculated that it would be sold for £1M if it were sold. Which it hasn’t been.

    And this gets even worse when contemplating future income streams, the value of businesses, and so on. Because any good or service only has a value one can measure when being transacted. The rest of the time, one can speculate what it might be worth, but the actual value is undefined.

    A proper assessment of non-monetary wealth would just result as NaN. (Not a Number).

  11. It is by the way worth noting that the Georgists (LVTers) actively desire the land value tax to force landowners to liquidate their land assets.

  12. @ MBE
    A self-employed sole trader has wealth that comprises cash etc plus the Goodwill atached to the trading name. In my case that amounts to the profit I can gain from contracts awarded when I shall be in my dotage and no longer able to compete: for the hairdresser it is the value of customers she canpass on to to her last apprentice.
    HMRC can make a wild stab at guessing the value but what is likely to happen is that they will put it as a stupid multiple of my current earnings so I shall just retire and say it’s zero rather than pay the tax so GDP will fall as a direct result of the wealth tax..

  13. ‘He’s swallowed all that guff that Nick Shaxson got wrong then.’

    I read the Treasure islands book. Twice. The first time out of interest and the second time to see if I could learn how to move money abroad just in case I found myself in the situation requiring it (it still has’t cropped up, but you never know….).

    So just which bits were crap then? Just the City of London bit?

  14. Ian B / MBE

    That’s interesting – I hadn’t thought through the wealth tax quite in those terms before, thanks…

    Salamander

    I read the first chapter once – a friend had got suckered by it. The first chapter itself was so lumbered with basic factual inaccuracies I didn’t waste time proceeding.

    You know the methods. Once you’ve “spun the porkie”, how could one possibly not agree with the obvious follow up…

  15. I knew it would not be long before this stinking clueless rat started banging on about a transaction tax which would not touch high frequency trading because they would either be exempt or cease to operate, it would then destroy the liquidity left in the markets.

    How many more years is this tosspot going to able to make his living from lies and absolute ignorance

  16. The LHTD is pretty much the definitive version of Bastiat’s bad economist:

    “In the economic sphere, an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them …

    There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen. Yet this difference is tremendous; for it is almost always the case that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Hence it follows that the bad economist pursues a small present good that will be followed by a great evil, while the good economist pursues a great good to come, at the risk of a small present evil.”

  17. If Alice has a house “valued” at £1M, that is “wealth”, but it has no actual measurable value until a sale transaction occurs; until then it’s just speculated that it would be sold for £1M if it were sold. Which it hasn’t been.

    And it gets better… we all have to have a place to live, so absent a house, Alice has to pay rent. Her “real wealth” is only the (presumed) value of the house less the present value of the future rental stream required to provide either the equivalent housing, or the minimum “acceptable” housing depending on how intrusive the tax man wishes to be. Since the tax man wishes everywhere to be as intrusive as possible (it’s not a bug, it’s a feature), we can assume that they will assess not only the value of the house, but the cost of providing the housing that they think you should subsist in…

    Assumptions layered on estimates which overlay value judgements and assessments. It’s ‘turtles all the way down.’ It cannot possibly be made to work – which is no doubt the reason that Murphy (and Corbyn) are so interested in it.

  18. Forget the pies, he looks pissed in the photo. As a study in human failings, we should watch his future career with interest. It certainly interests me: Even if he’s consigned to pulic oblivion tomorrow, I continue to be amazed at how far self-puffery will take a chap absent other merits. And the lesson I draw from this is not a good one.

  19. Bloke in Costa Rica

    If somehow every year 1% of the nominal value of someone’s ‘wealth’ has to be liquidated (because HMRC won’t accept the bike sheds outside that factory building or 20 square inches of that Tintoretto in lieu of actual money) then that is a catastrophic destroyer of said wealth. Who’s on the other side buying these things? Other rich people, presumably, who are also subject to the wealth tax, or else are foreigners, in which case cue the wails of ‘asset-stripping Britain’. In neither case would they necessarily have been buyers otherwise, at least not at the price the asset holder is being assessed for. So there are more assets being sold into the market than the equilibrium case, and we know what happens to prices when supply exceeds demand. Or, if the wealth tax inspectors simply set a nominal figure for someone’s wealth and send them the bill, people will switch from long-term capital accumulation into holding cash. That’s going to be great for investment (by which I mean real investment, not Murphy investment AKA mulcting people so that he and his mates can have a bunfight.)

    He truly is a cunt.

  20. BiCR-

    Indeed, it’s gloriously unhinged. It’s the forcible liquidation of assets that should not be liquidated. Ironically, from the same kind of people who demand that tax money be spent in a recession preventing the liquidation of assets that need to be liquidated.

    But Ritchie doesn’t think about these things. Flatcap Army’s Bastiat quote could not be more apt.

  21. BiCR / Ian B

    Hmmm. And add in, thanks to George Osborne, the ability of HMRC now to simply dip their hands directly into the bank accounts of those who HMRC think owe them money – that would have the potential to get quite interesting…

  22. How do you value the future income stream from grants from left-wing political groups masquerading as charities?

  23. Flat cap Army

    Bastiat basically blows Murphy out of the water – anyone reading his work and then that of the Murph could not fail to see that ‘what is not seen’ for Murphy is almost the entire picture. Only a wilful moron could still put any stead in his policies (Are you around Lawrence, my old stool pigeon?)

  24. Don’t need to reinvent the wheel on wealth taxes – just look at what the continental cousins do. But ignore the Dutch system, it’s insane and is based on presuming a minimum risk-free 4% return on wealth, which is la la land since at least 15 years.

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