This is the economic plan which has merits

The proposals are-

Withdrawal of all 56 taxes including central, state and local body government taxes excluding customs or import duty.
Replace existing taxes with Bank Transaction Tax (BTT). That means every transaction routed through a bank will attract a 2% deduction as transaction tax. This tax will be credited at all government levels, central, state and local, at a fixed percentage. Banks will get a tiny percentage too.
Total withdrawal of high denomination currency above Rs 50 from circulation.
Cash transactions will not attract BTT but the upper limit of cash transactions should be Rs 2000. That means people with a low income do not have to pay taxes. Once their income gets increased they have to pay taxes automatically.
Cash transactions above this limit will not enjoy any legal protection.

So, The Sage of Ely disregards a couple of centuries of study on optimal taxation systems then. Even the ones Nobels have been awarded for (really, do not have transactions taxes!).

One advantage I suppose. The excise taxes on tabs and booze fall to 2% which would be something of a boon.

28 thoughts on “This is the economic plan which has merits”

  1. So, I get paid – bang, transaction tax – some money moves from my personal account to my joint account – bang, transaction tax – and then money moves from my joint account to the mortgage, leccy, gas, insurance, pension, etc – bang, more transaction taxes.

  2. For those who can’t remember the days when when armed robbers robbed pay roll delivery vans and when muggers mugged people for cash instead of mobiles, you will soon find out what those days were like.
    (Although I guess muggers will still want your mobile)

  3. Total withdrawal of high denomination currency above Rs 50 from circulation.

    Rs 50 is 59p according to the current exchange rate.

    He thinks anything above the equivalent of 59p is a “high denomination”. Does he consider the UK pound coin a high denomination?

  4. “Cash transactions above this limit will not enjoy any legal protection.”

    So, the market will provide and someone else will be offering ‘protection’.

  5. I presume he is taking about India here, given the currency. He wants to abolish the Indian equivalent of the GB pound coin. That’s a bit of a problem in rural India, where many or even most people won’t have bank accounts let alone VISA cards or the means to use them in buying or selling goods.

    You are a farmer in central India somewhere and you want to sell a few eggs to a neighbour, but you can’t because she doesn’t have a bank account and some fat ignorant foreigner stole nearly all of her money.

    It has been said a million times before but this man is not only ignorant but is incapable of thought.

  6. It’s an improvement on his usual proposals. Yes, transaction taxes are disastrous, and it would be impossible in rural India, but he’s proposing a flat tax! And one that it would be very difficult for him to meddle with.

  7. Fvck me sideways with a fvckin’ barge pole.

    Unfortunately, we will no longer be able to continue to refer to him as the 0.2 Prof.

    From his latest blog entry, as from 1 Dec, he will be a full time Prof due to being part of a team in receipt of an award of an EU research grant of €1.7m.

  8. I for one would move all of my affairs offshore and recommend this to everyone, including my enemies because this idea is really, really bad.

  9. Thankfully I am sure no one in India knows who he is. So he might as well be talking to a goldfish that has fin and brain rot.

  10. @BraveFart

    Indeed. And what a load of pointless shyte the research seems to be.

    Looking at MNCs (who won’t be likely to co-operate in any meaningful way) to come up with conclusions they probably already hold to produce a report which no government in its right mind would pay any heed to.

  11. Let’s say I have a boarder. Tax free limit on cash transactions is blah. If we arrange for monthly payment, we’ll exceed that. Ok, we exchange cash for board every 14 days. Or 6 days. Or whatever it takes to get under the limit. No transaction tax. Problem solved!

    It takes a special person to rail against tax evasion yet support something that is screaming out for loophole exploitation via arbitrary thresholds.

  12. ‘It has been said a million times before but this man is not only ignorant but is incapable of thought.’

    I am looking for the original source link but Rob’s description of him is apposite. Just mind blowing idiocy, and one has to point out to anyone thinking of paying fees to attend the courses in ‘International political economy’ at City University might care to ponder their merits when they have just hired a professor who makes a virtue of his ignorance of every aspect of the subject in question.

  13. Or I buy something on rental-purchase. Rock up every week to pay my installments in cash. None are individually high enough to trigger the ‘cash transactions over a certain amount do not enjoy legal protection’ clause. But the total purchase does. When does protection become unavailable – before, during, or after the final sale? Is BTT retrospectively due because the final amount exceeded the cash limit?

  14. Ohh, the frustration of waiters in restaurants when a group all want individual bills.
    Cooperative behaviour will not be rewarded in the Courageous State.

  15. Bloke in North Dorset

    Andrew C,

    “Looking at MNCs (who won’t be likely to co-operate in any meaningful way) to come up with conclusions they probably already hold to produce a report which no government in its right mind would pay any heed to.”

    Indeed, this has all the hallmarks of policy based evidence making all over it before they even start.

  16. “From his latest blog entry, as from 1 Dec, he will be a full time Prof due to being part of a team in receipt of an award of an EU research grant of €1.7m.”

    How long before he has a spectacular falling out with all of them? Two months?

  17. BraveFart said:
    “an award of an EU research grant of €1.7m”

    But we were promised that UK university funding from the EU would stop when we voted Brexit. You don’t mean the remainers lied to us? Can’t they be forced to keep their promise just for this one?

  18. You just know Murphy is only so obsessed with transaction taxes because it offers total central control over the economy.

    The only bit that i find bizarre (by his standards, admittedly) is that he’s effectively arguing to offload much of HMRCs workload onto the banks (bye bye unions), and actively encouraging a wider ‘tax gap’ (again, by his measure) by encouraging cash-in-hand work.
    Or has he lost track of the hole in the stump that shows that an FTT discourages ‘speculation’?

  19. “It takes a special person to rail against tax evasion yet support something that is screaming out for loophole exploitation via arbitrary thresholds.”

    Stump thinking at its best, coupled with a complete lack of intellect to comprehend second order effects, should do the trick……………

  20. The Speccie has a piece on how the students union at City University is banning The Sun, Mail and Express from the campus on account of fascistic, hate-spreading blah blah blah.

    You’d think with a big bloated fascist on the faculty, there’d be more obvious targets than a few harmless tabloids…

  21. @TMB

    I don’t normally read any of those papers, but if I was at city uni (not likely I add, I’ve better things to do with my time), I’d take to pradeing round campus with copies of all three may to make a point!

  22. Isn’t the trick here simply in justifying getting rid of all but small cash denominations.

    And paying 2% may be potentially easier than all the rigmarole of very heavy wodges of dosh…

    At that point, welcome to Ritchie’s curajus reich, as all the taxes – one by one – wing their way back.

  23. Bloke in North Dorset,

    Does “Tory scum” class as hate speech? We could have some reporting just about every lefty who opens their mouth.

Leave a Reply

Your email address will not be published. Required fields are marked *