Complete nonsense

nonsense

Equality, inequality, are defined as personal incomes. This we can alter whatever we do to corporate taxation rates.

So, nonsense.

But then think about it as Ritchie does. Which is that corporate taxes are carried by the business itself. It’s not the shareholders, they don’t change their actions as a result of a change in corporate tax rates (they are the same statement).

Thus corporate taxation doesn’t change inequality when measured against incomes, does it?

29 thoughts on “Complete nonsense”

  1. I guess these “please, please print these as posters – they have my name at the bottom” blogs have replaced the risable venn diagrams?

    Not exactly catchy slogans though are they? Not “Keep Calm and Carry On”.
    Truly pathetic.

  2. Complete non sequitur. Why would lower business taxes of necessity result in greater inequality?

  3. @ Theophrastus
    Because the Curajus State can take £billions of tax from business and use it to increase benefit payments and Tax Credits so increasing the income of the “poor” while eliminating the ability of the companies to pay dividends so decreasing the income of the “rich”. Murphy assumes that decreasing corporate tax rates has a mirror-image effect.
    The idea that if a company has no reserves it will go bankrupt during the first cyclical downturn and thereby render all its workers unemployed hasn’t crossed his mind.

  4. he’s a prat

    Not only is he a prat, he’s a peerless prat. Isn’t it lovely that we’re now getting slogans calling for greater equality from a guy who spent close on a year angling for a peerage?

  5. @SJW indeed.

    Although fwiw my own view is that BHS went under because it was a crap store no one shopped in any more.

    It might have limped on for a few more years with more reserves but it was really a store that had had its day.

  6. @Andrew C

    “my own view is that BHS went under because it was a crap store no one shopped in any more. ”

    A view shared by many of those commenting on the BHS affair. Because indeed, THEY don’t know anyone who shopped there. But it would come as a surprise to them – nor does anyone else..

  7. Business tax rates of 99%, 98.9%, 98.09%, 98.009%, 98.0009%… are ever decreasing, but I bet Richard Murphy would be willing to accept them.

    Except that he probably doesn’t understand real analysis either.

  8. Most of us, capitalists and socialists alike,have our retirement savings invested in funds which in turn invest in corporates. The less tax, the more for me.

  9. Ironman & John77

    Quite so. What intrigued me is that the Murphatollah imagines that his statement is backed up by some form of necessity (causal or logical?) – i.e. that it is simply impossible to have decreasing corporate taxes and greater equality – when there are several conceivable scenarios in which this could be achieved (eg lower corporate taxes + higher personal taxes would increase equality).

  10. The only surprise is that he hasn’t had this chiselled in stone, as one in a series of ten.

  11. SJW

    The idea that if a company has no reserves it will go bankrupt during the first cyclical downturn and thereby render all its workers unemployed hasn’t crossed his mind.

    John77: May I quote your last paragraph in one of the Bhs threads?

    If it’s helpful at all, some quick extracts from here:

    https://beta.companieshouse.gov.uk/company/03858895/filing-history?page=1

    Green was appointed May 2000.

    I can’t format columns easily on here, for annual amounts, so some summary numbers:

    At March 2000, the company balance sheet had net operating assets of £328m, pension deficit of -£25m, and S/H funds of £303m.

    From 2000 to 2008, accumulated PAT was £358m, dividends -£414m, other S/H changes (actuarial etc) -£21m, net change of £-77m. Dividends were in the years 2002 to 2004, nothing after that (roughly consistent with press reports?).

    At March 2008, the balance sheet had net operating assets of £224m, pension surplus of £2m, and S/H funds of £226m (to compare with 2000).

    From 2009 to 2014, accumulated PAT was -£298m, dividends £0m, other S/H changes (actuarial etc) -£184m, net change of £-482m.

    At August 2014, the balance sheet had net operating assets of -£145m, pension deficit of -£111m, and S/H funds of -£256m.

    Re John’s comment, the company had a reasonable balance sheet at 2008.

    Would one have expected it have built up S/H funds by 2008 of some £640m (ie if no dividends had been paid), especially given that annual turnover was only in the £800-900m range or so through those ‘good’ years?

  12. Bloke in Costa Rica

    CayleyGraph: “he probably doesn’t understand real analysis either”

    Well he’s demonstrated repeatedly that he doesn’t understand Rolle’s Theorem*, so that’s a pretty safe bet.

    * as does anyone who disputes the central assertion that Arthur Laffer made.

  13. @ SJW
    You are a free agent, not my slave* (heaven forfend), so of course you can and you also may – provided you don’t attribute to me a claim that 2015/6 was the first downturn that BHS faced.
    *It was I, not my wife, who asked the “obey” item to be omitted from our marriage vows.

  14. @ Southerner
    An awful lot of socialists have pensions that aren’t invested at all but are paid out of taxes.

  15. @ PF
    My comment wasn’t aimed at BHS. Not my sector – I never covered fashionable sectors (except briefly when Parmaceuticals was split off from Chemicals and I was the only guy in the office who knew anything about it as a side-effect of being the expert on manufacturers of fertilisers). SJW has made a good spot, for which he deserves credit, but that was not the point that i was trying to make.

  16. BiCR,

    Folk like Murphy deny even the existence of the Laffer Curve; because in their world a 100% tax should produce 100% of the revenue, and any shortfall is down to “evasion” and can be punished with gleeful enthusiasm by the loyal servants of the Curajeus State.

    So, since in their minds tax revenue simply equals a linear “taxable sum x tax rate”, there’s no “curve” to discuss – merely the most pleasurable way to punish “tax evaders”,

  17. “Murphy denies even the existence of the Laffer Curve”

    He does so because it inconveniently fucks up what he desperately wants to be true. He is the sort who would deny the existence of gravity if he could get away with it.

  18. @ PF – My comment wasn’t aimed at BHS.

    John, I know. I was responding to SJW, not you – as he was aiming it at BHS?

    SJW has made a good spot, for which he deserves credit, but that was not the point that i was trying to make.

    That was my point. I wasn’t entirely sure that he was making a good point, with regard to BHS and based on the facts of their balance sheet.

  19. Interested

    The only surprise is that he hasn’t had this chiselled in stone, as one in a series of ten.

    Perhaps rather childishly, I persist in calling him the Murphatollah precisely because his announcements have the religious quality you identify.

    PS Agree with you on Trump.

  20. “Complete non sequitur. Why would lower business taxes of necessity result in greater inequality?”

    Inequality (in the Socialist ‘equality of outcome’ sense) is the result of different people having radically different wealth-generating capacity. Some people produce the goods and services that make the modern world hundreds of times more prosperous than any previous age in the history of mankind, and others don’t.

    If you destroy that wealth-generating capacity by taxing the wealth-generators into either bankruptcy or simply giving up and retiring on their modest savings, then you make everyone more equal. Equally poor, that is.

    The ultimate in equality is a 100% tax rate that means everyone has exactly zero.

    That’s not Murphy’s thinking, though. The core Marxist belief is that trade is a zero-sum game, that the more powerful businesses can only make wealth by taking it from the poor, and that tax-and-redistribute policies are therefore essential to even things up.

    It’s like thinking that inequality between successful farmers producing bountiful crops and poor farmers producing a bare subsistence is solved by taxing the most successful farmers into oblivion, and handing the spoils to the bad ones. It doesn’t make the bad ones any better – why work if you can steal from your neighbour? – and it makes the good ones worse – besides starving them of the funds needed to use and extend their methods, why would they work if they’re not going to benefit?

    The inevitable result is that production stops, as everyone stops working, and the resulting starvation leads to the government enslaving the workers and forcing them to work. (See for example every effin Communist country that ever existed…) Only the people running the system, like Murphy would dearly like to, can (temporarily) escape the workers’ Gulags.

    If you don’t understand their theory, you can’t successfully argue with them. The idea that tax-and-redistribute reduces inequality is at the black and rotten heart of their entire deranged zero-sum system of beliefs.

  21. NiV
    Yup, I broadly agree; and socialism is half-witted and dire. However, I was delving into the psycho-pathology of the Murphatollah: his ‘thinking’ is bizarre because it is not thinking – it’s a series of disconnected, rambling, angry and egotistical utterances which he imagines are connected by some kind of unspecified necessity.

  22. NiV

    Murphy would be quite comfortable with a 100% tax rate – after all, you owe everything to the state so it would be the logical conclusion to give it everything you have.

    Theo

    I object to the ‘Murphatollah’ designation partly because for me you are doing the Ayatollah a disservice – Murphy is substantially more delusional and doesn’t have the excuse of religion as an explanation – nothing in the Quaker faith he professes to follow justifies his stupidity.

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