To ask the new Professor a question

There is a particular tax way in that difference is also very obvious: most banking activity is not subject to VAT. The result is that banking is currently undertaxed, and the benefit largely goes to the wealthiest who make use of its services the most by value (inevitably).

And there is the now near universally acknowledged fact that banks outsource their risk to the world ta large, for which I think they underpay.

The result is a need for taxes on banks that reduce risk, are progressive and which compensate society for the costs banks can impose, of which 2008 was just an example.

It’s not left wing to demand a financial transaction tax in that case. It’s a key tax in rebalancing some of the presently seriously unbalanced elements in our economy as well as many of the economies in the EU and the world at large.

This is a move that has to be welcomed.

It may or may not be left wing to demand an FTT, it is most certainly stupid.

Because when economists measure the effect of an FTT they end up concluding that it brings in less revenue overall than not having an FTT. As even the EU itself pointed out. And as is the basis of my one and only peer reviewed paper in the literature, something which the new Professor will no doubt have extensively searched and cited, the literature that is, to reach his conclusion?

You know, this sort of talk about what economists measure and how? Referring to reality?

The second question of course is if the banking sector is undertaxed as a result of not being subject to VAT then why not adopt the solution from the Nobel Laureate who has actually studied this question? An FAT instead of an FTT?

Or is the new Professor simply ignorant of the difference, indeed of the proposal?

15 thoughts on “To ask the new Professor a question”

  1. Hasn’t Labour’s new shadow chancellor elsewhere today said that he wants to reduce the cost of financial services. Not sure how adding VAT will help that.

  2. The result is a need for taxes on banks that reduce risk, are progressive and which compensate society for the costs banks can impose, of which 2008 was just an example.

    Strangely, lefties tend to forget about the bumper tax receipts these very same banks supplied Labour in the years prior to 2008, allowing Broon to go on an ill-advised spending spree.

  3. Shinsei

    Both he and his boss are in favour of an FTT as well….. Don’t expect joined-up thinking when you can bash the bankers and, by extension, the Joos. And to clarify, Jezza is not anti-Semitic, he just likes talking to Holocaust deniers and people who want to kill Jews.

  4. What does “undertaxed” mean? Does this thinking also apply to people who earn less than the Personal Allowance?

    “a need for taxes on banks that reduce risk”
    lending==risk, so reduced risk==reduced lending (and therefore lower profits==less tax).

  5. “It’s a key tax in rebalancing some of the presently seriously unbalanced elements in our economy as well as many of the economies in the EU and the world at large.”

    I’ve noticed Murphy frequently drops these Petitio principii bombs. “Seriously unbalanced elements” is not in evidence. But if he says them often enough, . . . .

  6. This hysteria has been going on for some years. I listened to a corbyn supporter on a radio call in claim it would make 900 billion in the uk allowing the government to split it between the citizens, if it ever hot these shores derivatives and currency’s would be gone, the collapse in tax revenue would be hilarious.

    I am sick to death or murphy already, how this ends better be good enough to put up with him for 5 years

  7. As an Irish passport holder, he will undoubtedly be familiar with the Gaelic word for an eminent professor of his abilities and experience.
    Fockineejit.

  8. You’ll attract the attention of the greater good Here Tim, as you (and I) did on this occasion

    http://www.debatingeurope.eu/2011/09/15/should-we-have-a-financial-transactions-tax/#.VfcDKhDSpGU

    Led to us being quoted both by the then European Commissioner for Fisheries:

    http://www.debatingeurope.eu/2012/04/24/can-the-eus-fisheries-policy-be-reformed/#.VfcDpRDSpGU

    and the Swedish Green Leader – what circles we move in…..

    http://www.debatingeurope.eu/2012/03/26/does-the-eus-fisheries-policy-do-more-harm-than-good/#.VfcEARDSpGU

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