Still not getting it

The banking industry needs to be subject to a financial transaction tax on all flows to compensate for the lack of VAT paid by it.

An accountant doesn’t know the difference between VAT exempt and VAT zero rated?

Plus, a professor of some sort of economics doesn’t know the difference between a transactions tax and a consumption one? Is entirely unaware of tax incidence?

This would be progressive, and at very low rates for most UK households, but should rise in rate as flows increased.

For example, if the rate differs per household income then how is that a tax incident upon the banking industry?

This quite apart from the macroeconomic effect of a financial transactions tax, which is to shrink the economy and thus lower overall tax revenues. Making this a bit redundant:

Additional revenues raised should be used to lower tax rates, most especially for those with lower income. This is not a plan to increase tax rates: it is a plan for a better tax system.

Amazing how ignorant you can be and still teach in the British university system, isn’t it?

12 thoughts on “Still not getting it”

  1. So how does this control inflation?

    I was wondering when he would wander back to this particular pile of vomit for another sniff. Anyone remember his brilliant idea of punitive transaction taxes on any household with annual expenditure over £20,000? Not too bad for fat, sad old men living alone, bit shit for a family. Progressive and caring!

  2. Let’s be honest. If you’re going to talk about the ignorant teaching in the university system, you’re going to need a much longer post & a much wider field then just Spud.

  3. The arguments for VAT on everything are (i) varying VAT rates reduces the utility of consumption (i might prefer 5 apples 5 oranges, but differential taxation pushes me to 3 apples 7 oranges); (ii) the cost of policing boundary products.

    e.g.
    Prescription pharmacy – somehow I don’t see this have very elastic consumption
    Financial products – ditto.

    In both cases you buy what you have to there isn’t much discretion. Oops, I made the mistake of giving a technical answer to Make-it-up-murphy

  4. It makes perfect sense. They could use the money raised from the FTT to lower the FTT. It’s astonishing no-one’s thought of this before…

  5. It is utterly futile to argue with the likes of Murphy about the defects inherent in an FTT. Lest we forget in the closest real world example of the ‘Courageous state’ there are no Financial Markets – for him this is ‘mission accomplished’ as the state can direct economic activity for the wider good of civil society and against neoliberals, Conservatives , Brexiteers, free marketeers, libertarians and basically anyone who disagrees with his wider vision.

    BF – it was good to see that man who was widely believed to have been executed by being ripped apart by a pack of 120 dogs alive and well and giving Murphy some much-needed support

  6. So when I work and wages gets moved into my bank account, I get clobbered, and when I move money from my personal account to my joint account, I get clobbered, and when I move money from my joint account to my mortgage, I get clobbered. Why doesn’t he just confiscate everything to start with?

    Oh! And it’s bigger than this. At my parish council at the finance meeting each month we tweek the finances and move money to and from reserves, to and from the operational account, to and from the current account, to and from the building maintance account. This would cripple us. But of course, never mind, Murf’s solution is that we increase the parish taxes. ‘Cos Tax Is Good innit. How *DARE* people have their own money, we must take it off them.

  7. @jgh – it’s worse than that. He wants all private bank accounts to be monitored for excessive consumption. I can’t remember what punishment he suggested , but as he likes too mention his time in a concentration camp, i can imagine it means reeducation and forced labour – kim jong potato.

  8. Surely even this fat fuckwit doesn’t believe that something that suppresses economic activity like this can be a good idea?

  9. @ jgh
    You will just have to keep almost all the cash in the current account and forget about getting some interest on the balances. It’s quite easy to increase the rates (sorry, “Council Tax”) by a couple of % to offset the loss of interest. That only hurts the ratepayers so not those who are exempt and vote for Corbyn.
    Presumably Murphy now gets a “single resident discount”on his Council Tax …

  10. Get paid in cash. Problem solved. Oh no! The black economy is growing!! How did that happen? We need more State spies to monitor the tax cheats!

  11. It would never be published on the spudsite but VAT exempt means that you cannot reclaim all your input vat. So instead of seeming to be just a VAT collector, you are paying VAT on inputs that you have to recover from retail margins, making it a 90 – 100 % tax on the end customer

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