A taxman who believes tax is legalised extortion?

I’m happy with that. Other’s aren’t:

I have to admit that I have form with Ed Troup, the executive chair of HMRC. As the Guardian has noted this morning, it was me who drew attention to his 1999 article in which he described tax as legalised extortion just before he appeared before Margaret Hodge at the Public Accounts Committee in 2013.

I said in 2013, and I repeat now, that if that is his opinion then he is not suited to the job he holds. That requires a person who believes that tax is rightfully owed, and not just for legal reasons but because the state has a proper claim on a part of a person’s income as a result of the role it plays in society from which the individual benefits in partnership with government. Without a person having that understanding I do not see how anyone can do the job Troup does in the way that society would want him to fulfil that task.

I’m overjoyed with having a taxman who sees tax as legalised extortion. On he grounds that acknowledging reality is a useful attribute in any of our servants.

33 thoughts on “A taxman who believes tax is legalised extortion?”

  1. he was also saying on Twitter this morning that he wants HMRC stuffed with people “who believe in tax”, like it’s some sort of quasi-religious zealotry.

    Mind you, he’s also saying that neo-liberalism is failing and presumably must be replaced with “neo-statism”, something that fits nicely with his desire to tell little countries full of brown people what to do. After all, what could be more courageous than telling other people why their politicians are wrong and must be corrected?

  2. Readers may not have noticed, but the man claims to be writing yet another book, this time on tax havens.

    No good bandwagon shouldn’t be jumped on.

  3. “Legalised extortion” is similar to “elective dictatorship”. Sort of true, and not really that interesting or controversial.

    The reality is that around two-thirds of HMRC staff will broadly disagree with the chancellor on tax policy. So what? They’re not employed to make policy, just to implement it.

  4. Insofar as you’re free to travel to and live in other jurisdictions, tax is just the price you pay to live in the place you live. If you don’t like it, you can up sticks and pay tax elsewhere instead.

    Obviously in the real world moving to a lower-tax jurisdiction will mean personal sacrifices, leaving family and friends behind, etc. But look at America: there’s a clear pattern of internal migration, of both businesses and individuals, from high-tax states to low-tax states. The freedom to choose who legally extorts you is incredibly powerful.

  5. Anyone here responsible for the bizarre commentator ‘Pilgrim Slight Return’ who has suggested on this post ‘The Joy of Tax’ should be a compulsory part of an induction to HMRC – surely he/she has to be a spoof?

  6. BraveFart

    The paragraph basically says that HMRC ‘has to be run by someone who thinks the same way I do’ – and of course assuming the authorities allow him access we will probably have Lawrence from Guernsey claiming that he ‘is not interested in power’.

    Although I do think his blog entries have shown he has become increasingly unhinged, I am sure people felt the same way in Germany circa 1926 towards a certain brownshirted figure – look how that turned out – scary stuff…..

  7. ‘the state has a proper claim on a part of a person’s income as a result of the role it plays in society from which the individual benefits in partnership with government.’

    Bullshit. The state has a right to tax. Period. It has nothing to do with whether you benefit or not. The above is Pocahontas Warren communist crap, that the state has a right to your production. It doesn’t. It only has the right to tax.

  8. Gamecock, in the end it’s all someone’s income, isn’t it?

    I’m more interested in (read: terrified by) this bit:

    “That requires a person who believes that tax is rightfully owed, and not just for legal reasons”

    Not ‘just’ for legal reasons? Not surprising that RM thinks the state doesn’t have to put it’s actions on a legal footing, but yikes…

  9. “That requires a person who believes that protection money is rightfully owed, and not just for legal reasons but because the Mafia has a proper claim on a part of a person’s income as a result of the role it plays in society from which the individual benefits in partnership with the Mafia.”


  10. Isn’t it time fopr Tim to poull together a book called “The Joy of Murph” or “The Ridiculous Murph”?

  11. Oh, puhleeze Dick. For makers of laws, there are no laws at all, cozy if you don’t like em, you just change them.

    See State Pensions.

    If Dick had saved with Dodgy Friendly Societies (Panama) Inc and they told him they were a bit short of readies, so the bond wouldn’t mature on time and would deliver rather less than the guaranteed amount, would he just shrug his shoulders and move on?


  12. Andrew M,

    “But look at America: there’s a clear pattern of internal migration, of both businesses and individuals, from high-tax states to low-tax states.”

    Is it really that clear? People aren’t fleeing California which is a high tax state. I will admit people are moving from northern states to southern states with different tax structures but for many the reason has nothing to do with taxes. Before they passed my grandparents had a winter home in Arizona. Climate was the factor, not taxes, although they did consider taxes in choosing which southern state to winter in. Ban air conditioning(I’m not serious) and we’d expect to see fewer people moving south. As Gamecock will attest few yanks are able to survive the full heat of a South Carolina summer.

    I’m not saying taxes are not important. I am saying that they aren’t the only factor in migration. Failing to consider other factors will lead to a biased result.

  13. I fully agree that taxes are legalized extortion. Every paycheck I have social security taxes taken out. I have zero faith that when I finally reach the retirement age to qualify(probably around 95 at the rate we are going) that there will be social security for me.

    I’d love to not pay that tax. The problem is that the government has set up a system, which if ended, would cause massive social upheavals. If anyone has a solution that mitigates the upheaval and gives me a reasonable chance to get part of what I put in back I’m all ears.

  14. Since this topic is taxes I am re-asking a question from a previous thread which most likely won’t be seen.

    Wouldn’t corporate tax also reduce the amount of money that could be paid as wages?

    If not, why not?

    I know the primary effects of corporate tax won’t affect wages at all. I have a gut feeling that there is a second order effect that would lead to either job loses or wage cuts. Any thoughts that will allow me to identify these are appreciated.

  15. LY, you are asking about tax incidence. Does corporation tax fall on employees, shareholders, or customers? I think the answer is “all of those”, but in proportions unknown.

    The one entity it can’t fall on is the corporation itself, because it is a legal fiction, not a consumer.

  16. dearieme,

    Thank you. That allows me to frame the question better.

    Would it be safe to assume that the tax incidence will vary wildly from business to business?

    For businesses with little flexibility in labor costs like fast food, retail or a union contract is it safe to say that the bulk of the tax would be passed to the consumer?

  17. “Wouldn’t corporate tax also reduce the amount of money that could be paid as wages?”

    I’m hoping this was a friendly enquiry, but it does come across as the sort of question only a lawyer could ask – i.e. one where the answer is self-evidently ‘yes’ but is really designed to ask something else, in this case the extent of the effect.

    There’s some material here:
    The effect varies depending on the industry, and capital mobility, but it’s logically obvious to me that a combination of workers, customers and shareholders ( who are often workers ) get to negotiate a bigger slice of the pie for themselves if the pie is bigger.
    Customers seem to get the smallest boost ( <5% ) , owners and workers split the rest. ideas.repec.org has many abstracts on the effects.

  18. Liberal Yank,

    I accept that climate is a big factor. Still, tax does seem to impact on people’s decisions: particularly people with money.

    The US social security (pension) system will probably pan out OK; there are enough new hard-working immigrants arriving every year to cover the cost of pensions in a few decades’ time. That’s more than we can say for many European countries. I wouldn’t fancy my chances as a Greek pensioner.

  19. If taxation is legalised extortion, what does that make Polly’s calls to surround tax havens with solider’s and starve them into coughing up more tax?

  20. When I was working in NJ, several of my colleagues chose to live across the border in Penn, even though it meant a 50 mile commute. Because: taxes.

  21. Henry Marsh,

    That is almost exactly what I thought I was looking for. Thank you.

    I wasn’t trying to sound like a lawyer. I was in a discussion with someone on another site who stated that corporate tax falls solely on the consumer. As my google-fu skills failed I didn’t come across the link you provided which would have been very helpful at the time.

  22. Liberal Yank asked:
    “Wouldn’t corporate tax also reduce the amount of money that could be paid as wages?”

    See here for probably the biggest study on it, by Oxford University:

    The short answer is yes, and in the sort of systems we’ve got, most of the incidence falls on the workforce (in some situations the workers’ loss can be more than the corporate tax charged, due to second order effects).

  23. Richard,

    That is now two sources that show far more of the tax incidence going to workers than I had thought. It’s been a long time since I’ve had this big of a ‘that’s odd’ moment. My hypothesis was that consumers would carry far more of the burden. It feels good to have found a new thing to learn.

  24. It would probably not surprise anyone who does not know, but Professor Murphy thinks the Said Business School is more morally repugnant than Sodom and Gomorrah squared and its research conclusions utterly wrong.

  25. VP

    Murphy’s spats with the Oxford Centre for tax are legion and occasionally nasty. I believe he has been barred by them from attendance at all their future events for sitting at the back and tweeting critical comment during a seminar there (I may have the organisation wrong here). He has I believe put the boot into them on twitter, but I’m not a twitter person, but I did find 2 TRUK blogs using google.



  26. Bravefart

    Yes – that’s the OCBT – I thought it was something he’d come up with today. His attacks on Judith Freedman (I think – apologies if that is wrong) are the stuff of legend! Didn’t he compare the organisation with ISIS or something equally asinine – what a despicable piece of crap he is – a really vicious thug.

  27. And meanwhile darling Ritchie has refused on his blog to publish his tax returns saying that the accounts of just one of his companies tells a better tax picture than his personal return will. One wonders what he is hiding?

  28. How much effort is it to whip up a twatter pitchfork mob? “Tax transparency campaigner refuses to publish own tax returns! Even those evil baby-eating Tories Cameron and Osborne have published theirs!”

    Bonus points if you can get Brillo to lead with it next time the LHTD is being interviewed 🙂

  29. ‘People aren’t fleeing California which is a high tax state.’ – LibYank

    ‘Roughly 5 million people left California in the last decade.’ – Sacramento Bee

    Yank, you are entitled to your own opinions; you are not entitled to your own facts.

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