Christ almighty, he’s mad!

The controversial measure is set out in Mr Murphy’s new book, called The Joy of Tax, which is published this week.
Mr Murphy (below) says in the book that the new consumption tax could raise over £100billion a year and replace National Insurance Contributions, which disproportionately hits poorer people.

It says: “I think that a progressive tax on the total sum paid into and out of people’s and companies’ bank accounts is now essential.
“This simply requires that the rate charged increase as the total payments into and out of bank accounts connected to a person increase.
“This is the tax that can, in the 21st century, end the absurd need to tax labour and its wealth creation and instead shift that tax to excessive consumption, a shift we know is now needed.”

That’s not a consumption tax you fucking moron. It’s a transactions tax. You are taxing the transaction: it’s a transactions tax.

67 thoughts on “Christ almighty, he’s mad!”

  1. Company expenses get taxed. Birthday gift money? What is this lunatic bleating on about?

    Keep out if my bank account you crank!

  2. Funny – my first thoughts were along the lines of “that’s one way to make cash really popular”…

  3. “end the absurd need to tax labour” – what on earth does Richie think he’s been blithering on about for the past god knows how many years?

    More tax, more tax, more tax, and sod the incidence….

  4. OK, let’s put aside the obvious economic lunacy.

    The little nugget that I especially love is his touching faith in the IT capabilities of banks and finance companies.

    As someone who very much lives in the real world (and with some experience of these matters) I can spot a few practical issues with his master plan.

  5. Presumably buying books by Dickie would be exempt from this tax. And purchases from geography teacher outfitters.

  6. So, according to him my monthly salary, paid by my employer into my bank account, is “excessive consumption”? As is the rent I pay monthly to my landlord? Paying for shopping by card at the supermarket?

    What a stupid cunt he is.

  7. Now you know why Corbyn’s has dumped him. Even he could see what a colossal political blunder this fucking lunacy is.

  8. It’s fucking genius. I can order an item for £10 from Australia which has to be flown here. I can also buy a £100 small item made locally from organic materials. Murphy will tax the fuck out of me for the latter “to save the planet” but not the former.

    Truly, he is an intellectual colossus!

  9. I think it’s a great idea. You could create a couple of accounts in the name of R.Murphy, set up a few hundred offsetting transactions between them per day, and hey presto – huge tax bill !

  10. Hang on, taxing labour is now “abzzurd”? Then why has he been banging on about taxing the labour of the higher-paid more all this time?

    If his wife refuses to participate in the Joy of Tax with him, will he have to go and taxturbate in his shed (sorry, his annex)?

  11. @abacab

    If taxurbate is your own work, I salute you.


    I’ve been away – has Corbyn dropped him , then?

  12. @Interested

    Depends who you believe. According to Murph: he ‘declined an offer to join” McDonnel’s team.

    If you ask McDonnell he says “Richard who?”

  13. He’s just awarded a colossal tax break to anyone wealthy enough to have paid their mortgage off outright. Lol

  14. So remind me, how do non insane advocates of consumption taxes say they’d work? Zero incomes tax – labour or capital – and progressive taxes based on how much you spend on consumption goods (including property?) Per year? Does VAT disappear too in that world?

  15. I go on holiday with friends. One of us arranges and pays for everyone, the others pay their share into that person’s bank account. This fucking clown has now ensured 3/4 of the total amount will be taxed TWICE.


  16. And if not cash – then overseas current accounts anyone?

    Seriously, employees just give their employer sort code and account code details for their bank account. That’s basically it.

    Hence, salary (net of tax, quite rightly) is paid into that account (no evasion or anything like that). There is no requirement for the current account to be UK based.

  17. You know what – I am beginning to feel a bit sorry for him?

    If he really did write that in his book (and it’s not been misrepresented?), then it’s becoming increasingly clear that the poor chap really has completely and utterly lost it?

    I’m all for knocking those idiots that wilfully set out to damage and destroy us etc, but – to turn this on its head – shouldn’t we perhaps be showing a little bit more compassion here?

  18. Bloke not in Cymru

    So state benefits paid direct into your account will be taxed when they go in and when you take the money out, what about a payment to the tax man will that also be taxed?
    As for increasing the tax depending on amount spent then how would you deal with multiple bank accounts that are allow just below the increase threshold, because I’m pretty sure that’s a service that would be offered.
    Also he’s massively underestimating the complexity of this and the cost of administering it.

  19. He is taxing “excessive consumption”, presumably to end it as he considers it to be evil. What happens when it does end? The tax revenue goes with it. Richie has abolished NI and income tax…where will the money come from to pay for the Curajus State?

  20. Bloke in Costa Rica

    He wants to stop “over-consumption”. Given that the entire purpose, the sine qua non of production is consumption (even if deferred consumption via savings or investment) then what he is saying is he wants less economic activity.

    (this is getting cross-posted to the DT as I’m a lazy arse).

  21. I’m struggling with this one much more than some of his other ideas. Surely those that ‘consume’ the most will have the wherewithal to spread the ins and outs, most likely using secrecy jurisdictions to cover any tracks, and so the levy will be raised on upper middle incomes. As pointed out the revenue will shrink whilst those that are ‘over-consuming’ get away with it. Again.

    And how the hell will this be administered? It has to be presumed that whilst it’s all being calculated then some sort of withholding tax would need to be applied. Then double taxation, then appeals and credits etc etc.

    Without any meat on its bones, this is a shark-jumper.

    I do agree that NICs are regressive though.

  22. @ Luis Enrique
    We have several consumption taxes, one of them is called VAT, there are also taxes levied on alcohol, tobacco, motor fuel, airline tickets, insurance premiums …
    The Bahamas have created great prosperity since they abolished taxes on income and substituted taxes on consumption – you can go to to learn more of how sane people run consumption taxes.

  23. I agree with PF – while it’s immensely unfair to ascribe illnesses to people you’ve never even met, he really does come across as having something loose upstairs.

  24. @ Arnald
    NICs are progressive up to the top of the higher rate band. After that they cease to be a contribution towards pensions, industrial injury benefits, unemployment benefit etc and just become a tax on income which is, ipso facto, *progressive* since the tax is only on income above the threshold.
    However I find it difficult to disagree with either of your first two paragraphs (which is slightly worrying).

  25. John right. This I know. Those are not what i wa talking about which is a tax based on consumption expenditures summed annually by individuals at a progressive rate, not per transaction. It’s what people like Scott Sumner advocate to replace progressive income taxes, which I think is what Richie is getting at in his ususal cack handed way. Tim w can confirm I expect.

  26. Excessive consumption, that makes people poor, because only the courageous state knows exactly how much you need to consume in order to be neither poor nor too rich.

  27. PeteC

    Actually, anywhere, it wouldn’t matter?

    Unless Richard’s “latest idea from his garden shed” is to cover all bank accounts, no matter where in the world, and then to accumulate all those accounts in the name of any single tax payer into one for this purpose,, then it just wouldn’t matter where those accounts were?

    Unless you meant something else re the Channel Islands and I was being slow…

    It’s just plain bonkers / sky fairy stuff. I might even have to buy his book just to check that he really did write it……

  28. @ Luis Enrique
    No way you can do that until Andy Haldane’s drive to eliminate cash is adopted worldwide and every household has a single bank account.

  29. A progressive consumption tax works by having a sheltered wrapper (something similar to an ISA or SIPP) where you put the money in tax-free and you can invest it. You only pay tax when you take money out to spend it.

    If this is what Mr Murphy is trying to describe he has done it in am extremely mad way.

  30. Luis Enrique

    A progressive consumption tax?

    So… HRMC expects you to keep records for their tax purposes of everything personal that you spend (as there are bound to be all sorts of allowances?) …

    And hence using csah or overseas doesn’t matter because you will still need to declare it or your “annual return of consumption”?

    The extremely polite response to that is “Isn’t this taking our surveillance state to all sorts of new heights”?

  31. The language of the article is suggestive of growing madness. Even Arnauld has attacked it. Blimey.

  32. Rob – £100bn? Lol. Why not £175bn? A trillion?

    How can one get to that kind of number if everything under £20K of consumption won’t be taxed (per the article), and the rate tops out at 1.5%?

    It smells! The 1.5% max is clearly nonsense.

    Is it all just click-bait to get some of us to go out and buy his book…

  33. What is “excessive” consumption” anyway?

    I spend my money carefully, and I don’t buy something “excessive”, pretty much by definition. I don’t know anyone that just spends money on things they don’t want.

    Really what he means is he dislikes people “being rich” isn’t it? But saying that looks like the politics of envy.

  34. @PF
    You mentioned employers needing an a/c number and sort code. That wouldn’t work if you wanted your money to turn up in a foreign bank account as the company would need to do an international transfer using the full IBAN.

    Presumably, and I admit I don’t know this for sure, if one had an account with one of the UK dependencies (IOM?) then you could provide just the sort code and account nubmer.

    All this being strictly academic, of course 🙂

  35. I’ve left a comment for him…

    “Such a tax would, as others have pointed out, create all kinds of incentives that would need to be policed. An increase in the grey economy activities paid for by barter … large single cash withdrawals instead of debit card payments to minimise the number of transaction… a consequent increase in cash theft, muggings and petty crime because cash is a much less secure medium than bank accounts.

    I also don’t buy the argument that the losses from those folks who set up foreign bank accounts could be reclaimed from those banks who aided them to do so – the assumption that these folks would need a UK bank to aid them is a tenuous one. If I were an executive in “Bank of Foreign” I would be planning a big marketing campaign in the UK as soon as this legislation was announced.

    All in all, the second order effects of this would be substantial, and measures to police them would be necessarily illiberal and wide ranging. You underestimate people in general.”

    In the past he’s replied to me and I’ve not been banned yet, so let’s see.

  36. I can see a tax system which penalises families (who obviously spend more) and rewards single people being a tremendously popular policy. And just.

  37. PeteC

    “IBAN etc”

    Yes, you’re right, extra complications – I understand, re the dependencies.

    “All this being strictly academic, of course”

    That’s the real point, isn’t it? I mean, there is just no way any of this flatulence could ever genuinely get implemented, is there…

  38. The thought occurs that if the banks are effectively turned into tax collectors, assuming the tax is deducted from each transaction , then there’s no need for HMRC to be any substantial size at all. How much have the union been paying him recently?

  39. “john77

    @ Arnald
    NICs are progressive up to the top of the higher rate band. After that they cease to be a contribution towards pensions, industrial injury benefits, unemployment benefit etc and just become a tax on income”

    In our brave new world of flat rate pensions, it makes no difference now to pension entitlement how much NIC you pay, only that you have qualifying contribution years and since the LEL is below the primary threshold, the truth is that once you are earning above the LEL it makes no difference if you pay Nil NIC or £100,000 NIC a year. Your entitlement to pension is the same. Since you don’t have to pay a single penny to earn a full entitlement to state pension, it’s hard to see that your NIC is actually ‘earning’ you anything.

  40. Bloke in North Dorset

    Some good comments tonight, had quite a laugh reading to here.

    Anyway, what is it with the left and consumption? They whinge like fuck that we don’t manufacture enough stuff and they whinge like fuck when we buy stuff.

  41. As an approximation NICs total around 6% of national income. For the cost of a committee meeting supplied with single malt I and others here could abolish around 3% of national income from govt spending and shift the balance into income taxation, with other finesses such as abolishing contribution-based benefits apart from the State Retirement Pension.

    Thus Richie’s primary aim is achieved, and entry costs for new employers are slashed, and we don’t have the palaver of dozens of 12hour a week jobs being advertised in the press because employers want to pay less than the NIC threshold.

    Big thumbs up then for the Norfolk man of ideas.

    Oh sorry, Richie doesn’t want to cut government spending, despite it still exceeding the record year for tax receipts for more than 8years in a row, because exceeding the record is not enough for him. Well then, if the total of bank transactions is within +/- 50% of national income then the average transaction tax will be in the 4.5% to 9% range, nil for sub 20k earners, higher by a lot more for those earning more than that.

  42. Bloke in North Dorset

    Wouldn’t a progressive consumption tax be something like I pay x% tax on my first pint and then x%+y% on my second pint, usw? obviously basics like bread would be zero rated, unless you were a fatty and the you pay an incremental tax on each slice.

    Facisim ad absurdium is always where he was heading.

  43. His thinking has received some very high praise in authoritative quarters:

    “Conventional economists have run out of ideas. But Richard Murphy abounds with them.He writes with electric clarity about what went wrong and what could be done to put things right. He is a new economic thinker, and guided by a sharp and practical accountant’s eye he knows where the money is hidden, who has it and how to release it. Murphy is is as courageous as he says our politicians should be.” (Polly Toynbee The Guardian)

  44. Based on some of his other stuff even sharp practical accountant is a stretch. He certainly has no real working knowledge of the sort of big companies he is claiming are avoiding tax and the complexities of multinationals

  45. Loads of excitement here, as all of a sudden there is the possibility to pay a tax on purchases. Do not forget – no NI to pay any more!!!

    Taxes on sales, we have already, of course, VAT.

    Equally, we already pay a “tax” to the financial services sector, if we pay by credit card. You notice it when you buy a flight ticket, but otherwise the commission is included in the price.

    So VAT and credit card charges fine, but new tax (instead of NI) is supposed to be bad??


  46. Is Murphy now proposing a personal allowance of £20k for his new consumption tax?

    But hasn’t he spent the last few years complaining that a high personal allowance is a neo-liberal plot to starve the poor (or something like that)?

  47. Given all the stick he gets here (most of which is justified), let’s acknowledge Arnald’s intellectual honesty in calling this a shark-jumping moment.

  48. Matt U

    It’s the proposed mechanism to calculate it, based on movements in and out of bank accounts, that is insane. Not the idea of a C tax.

    More sane would be to use bank accounts to corroborate self reported annual consumption spending, but of course these would be only a subset of payments.

  49. @Bloke not in Cymru – October 2, 2015 at 6:06 pm

    S…when you take the money out, what about a payment to the tax man will that also be taxed?

    Assuming that there are to be NO EXCEPTIONS to this wonderful taxation system RM has just invented the “Recursive Tax”… viz:

    1. Receive tax demand from HMRC.
    2. Pay Tax from bank account thus generating a further tax liability – therefore GOTO 1.
    Repeat until death or bankruptcy occurs. 🙂

  50. Ooops, looks like I made a mistake earlier. The BACS web-site reports total transactions around 4.4 trillion GBP a year. So around 2.5 times national income from bacs transactions alone passes through the banking system.

  51. @ Matt Usselmann
    Your American-Brazilian lawyer hasn’t heard of the cash economy nor of the problem that a self-employed person will pay tax on all his business expenses as well as his income. The fat-cat corporate lawyer only pays transaction tax on spending from his salary, the small self-employed guy pays it on all his business expenses, which may be ten times his profits, as well as his personal spending out of income.

  52. @john77

    Indeed. You can easily do millions in turnover and make a loss, for instance.

    Which would then be taxed more by this than doing the same turnover but making a profit. (because less outgoings)

  53. ya’ll r irresponsible. left moves away from taxing income should b encouraged

    carbon tax for corporate income tax is the great trade out there, for me

    also, please explain why the Tories want to raise the minimum wage paid by businesses, and remove tax credits paid to low-income workers. this would seem, to me, to be backwards

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