Also interesting is page 3 where there is an illustration that the most equal of the developed societies do not have highly progressive tax regimes. They do have high consumption taxes and high levels of transfers.

Richard Murphy says:
January 6 2018 at 1:05 pm
The chart ignores the fact that pre-tax income range is lower in those states so less progressive tax is acceptable

Sweden pre=tax gini – 0.426. UK, 0.456. Switzerland, 0.409. Denmark, 0.416.

Don’t really see it myself.

11 thoughts on “A claim”

  1. “More than 130,000 UK firms will be forced to pay VAT upfront for the first time on all goods imported from the European Union after Brexit, under controversial legislation to be considered by MPs on Monday.”

    Quotes Ritchie. MPs are cunts he agrees, good so far.

    “I think my suggestion that Brexit would cause a credit crisis that would precipitate economic failure was right last November. I am doubly sure of it now. And of course, the problem of payment just compounds the issue I foresaw. This is very ugly indeed for large numbers of British businesses and those who depend on them.”

    Paying tax upfront isn’t fair he now claims. More good progress.

    A predication as well, excellent, we’ll check that out in 12 months time as well.

  2. I think he’s right on his first claim
    does have lower pre-tax and transfer poverty rates and lower Ginis for Den, Ice, Swe, Swi and Nor compared to other groupings.
    I wonder if he’s got cause and effect the wrong way round though – he’s implying a more progressive tax system will lead to lower inequality.
    The correlation is between less progressive systems and low inequality.
    Spud could be right, but he’s got all his work ahead of him to find countries or regions he likes which arrived at the promised land by ramping up the progressivity of their system. The Scots are about to do us a favour with their experiment on this.

  3. Bongo’s reference is interesting – the only country listed with a higher Gini for post-tax disposable income than Communist China is South Africa under its communist president Zuma.

  4. Actually I do remember seeing a graph that showed the highest incomes in Sweden were generally much lower than in the UK. To the order of 25% lower.

    Doesn’t make a big point difference in gini due to the large bulk of people who are middle income though

  5. Mr. Murphy has just posted on the subject of the MMT’s again today, Sunday. I have commented that this seems to put him on the side of the cavalry and militia at Peterloo.

  6. So it is all right not to have a “progressive” tax to lay waste to an economy if the economy is already in tatters? (Never mind that it is not.)

    Noel Scoper – Richard’s claim of doom following Brexit resonates with the claim of Paul Krugman that the election of Trump would lead to a stock-market crash.

  7. In Scotland pre-tax inequality could rise even in a closed-border world ( so no migration ).
    The rich would demand pay rises, and/or work more hours to keep their after-tax earnings up at the previous level.
    The low earners could drop an hour a week of work and maintain the same level of after-tax earnings if that suited their family situation..
    So making tax more progressive can increase pre-tax inequality. I doubt that Spud has considered this, it’s the more tax bit he likes, not what the outcomes are, from the way he comes across.
    Could go either way of course.

  8. So Murphy has two thoughts on Switzerland:

    1. It is a gloriously more equal society than ours.
    2. It is a secrecy jurisdiction and tax haven.

    So, following Ritchielogic, tax havens are bastions of social justice.

  9. Re. Switzerland – what’s interesting is that here, I’m making a salary of about 2-2.5x median income (depending on bonus). In the UK, the same job would be making me at least 3-3.5x UK median income.

    Part of that is the lower paid being paid proportionally more (FYI there’s no minimum wage)

  10. @ abacab
    The Swiss don’t need a minimum wage because demand exceeds supply – two of the world’s top pharmaceutical companies, two of the top engineering companies and *several* of the top banks are Swiss and …
    “In Lichtenstein the Guest workers are Swiss”

  11. @john77 – not the case in e.g. hospitality. Many people can’t get full-time jobs who want them. However, gross pay is still CHF 20-25 p.h. largely because people won’t work for less, and the immigration authorities won’t issue residence permits for furriners who will.

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