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A suggestion here

Desperate times need radical solutions. Even Churchill knew when it was time to tax the rich
Torsten Bell

Anyone who wants to call Churchill in in support of higher taxes should read about his turning and twisting over the money from the History of the Second World War. It was very – very – much tax for thee and not me, to put it mildly.

37 thoughts on “A suggestion here”

  1. The offcial Economic History of the war lays it out quite clearly. The govt had to maximise tax revenue without impoverishing the population. So they shifted as much as they could to consumption ( my mum and dad had to pay 50% sales tax on their engagement and wedding rings ) and introduced the concept of “Super Tax” which was a kind of wralth tax.

    There’s a world of differene between running an economy to build and crash Spitfires to one consisting of TikTok videos.

  2. One of Churchill’s solution to the problem was to retire as a writer (since he was being taxed at 19 shillings sixpence on the pound on his marginal income (an effective rate of tax of 97.5%), it was pointless him working for so very little return.

    ”I have gone into the whole thing very carefully with my advisers and they tell, me that if I come out of retirement—you see I’ve been in retirement ever since the election when the people turned me out—and write anything now, I would have to pay taxes of nineteen and six in the pound, so what’s the use?”
    &nbsp
    Then, gesturing towards his paintings, he concluded: “But these are something else again. Do you think your people might like to publish them—that is, to take them in place of one of the articles? I would like such an arrangement better for the time being, as the income, I am advised, would be considered as a capital gain and therefore non-taxable.”
    &nbsp
    The point was clear. Churchill was offering for $25,000 the reproduction rights to the paintings he had made on holiday. It was agreed that I would communicate with my editors. Before leaving I congratulated him on the excellence of his pictures, expressing surprise that he could find the time to take up painting on top of all his other work. Behind an enormous grin he murmured: “Genius has many outlets.”
    &nbsp
    Churchill and his Taxes: “Genius has many outlets”

    By avoiding the swingeing levels of taxation which his own government had instituted during Wartime, Churchill is guilty of at least hypocrisy, if nothing else.

  3. But JG, instead of the sunlit uplands of a post war world the British people were plunged into greater austerity and worse poverty than they had experienced during the War itself.

    I think WSC was the last one to expect that not only would the wartime tax structure still exist but would be tightened even further by Dalton and Cripps.

  4. ps I would like to point out that I am not actually defending Churchill, I am attacking Socialist economic policy

  5. All very well, but doesn’t justify the tax dodging he undertook on advice from his own officials in 1925 as Chancellor of the Exchequer.

    As chancellor he was responsible for the tax system; yet he owed £400,000 of tax in today’s money and had no means of paying it.

    Churchill summoned Richard Hopkins, the young chairman of the Inland Revenue, and asked for suggestions. Hopkins spoke to his technical staff before writing to Churchill in his own hand on plain notepaper.

    Helpfully he pointed to an ‘anomaly’, which would halve Churchill’s tax liability: he should ‘retire’ as an author, then claim any unpaid fees as capital receipts (which were untaxed) rather than income.

    He used this same dodge more than once.

  6. ‘Radical’ solutions? We already tax the rich (and the middle, and the poor). I’m not sure you can call proposals ‘radical’ if they’re tired clichés and can be predicted before reading the article.

    Want some actually radical proposals? Means-test the state pension; abolish the triple-lock; privatise healthcare; mass repeal licensing and permission rules; repeal proof of compliance regulations; ban state-funding of charities; and prefer scandalous but punished failures to bureaucratic monitoring and form-filling.

    Our fiscal path is such that someone will ultimately be forced to do some of these. In the meantime, I’m just enjoying the wailing as the state-funded realise there isn’t enough to go around.

  7. ps I would like to point out that I am not actually defending Churchill, I am attacking Socialist economic policy

    Fair enough, but where does Socialist economic policy begin? Implementation of income tax? When tax rates exceed 10%? 20%? 50%? 95%

    Ultimately the problem here is that taxes, particularly income taxes undermine individual effort, because at some point the value of spending the day gardening is greater than spending the day working if you get so little return.

    This is also why I despise MP’s special status. If they were paid average earnings and taxed the same way as other taxpayers then they would understand the pain that we go through. Instead we end up with a situation like the French aristocracy in the last days of the Ancien Régime, where they are so cut off from the everyday lives of the ordinary folk that they cannot see or even comprehend the basis for their own destruction.

  8. JK277 (are you a Mark V Spitfire?) if they want radical they might try not spending the money in such a profligate manner. We are taxed enough already.

  9. JG

    Yep, I agree with you. And your examples illustrate the whole problem with how we “in the west” tax income. By making the tax burden too onerous we encourage people to seek flaws and loopholes in the system. A too complex tax code means that ferreting around for ways to avoid tax becomes an industry in itself.

    True radical solutions would be to pare the tax code right down. Have a few specific cases where tax is gathered ( eg Corporation, CGT, VAT, income ) and abolish all exceptions and allowances. Charge Income Tax at a flat rate for all but start tax free earning much higher (£20,000 ?).

    And as JK and RK suggest. Stop the government spending money.

  10. Horses for courses. If I were looking for ideas to win a war I would certainly look at Churchill. If I were looking for ideas to run a peacetime economy I would not.
    I note however that Socialists often view problems as the equivalent of war.

  11. If I were looking for ideas to win a war I would certainly look at Churchill. If I were looking for ideas to run a peacetime economy I would not.

    Which is a fair enough tribute to the old war horse. God put him on this earth to do the best that could be done in WW2. He was never an accountant or tax specialist and never claimed to be.

    As for the Socialists of Clement Attlee’s 1945 Government continuing and extending war time policies into peacetime, well that’s all very Stalinist, isn’t it. Indeed in the election of 1950, the Labour Party wanted to continue rationing indefinitely, but that was rather stymied when their 1945 landslide was cut to only 5 seats (Churchill would return to government the following year).

    And as JK and RK suggest. Stop the government spending money.

    I’m guessing that putting a stop to government spunking money up the wall will happen sometime after the 2nd coming of Christ.

    Prudence (or even “Not squeezing the taxpayer dry”) is an approach that has long been absent from Government and no major party espouses any form of significant overall reduction in either the size or cost of government.

    The best I can manage is a personal “Starve the Beast” approach.

  12. Alongside energy, the cost of food is on the rise. This is a heating and eating squeeze the like of which none of us has seen before.

    It’s worth it to “weaken Russia” tho.

    Take THAT, Putin!

    Btw does anybody think that maybe the US State Department, which forced these insane sanctions on a sceptical Europe (Third World countries wisely told Uncle Sam to fuck off), might not actually have Europe’s best interests at heart?

    Just a crazy feeling I get sometimes.

  13. It’s worth it to “weaken Russia” tho.

    Press “X” to Doubt.

    It might be worth it if it brings NetZero and similar Watermelon idiocy to an end, even if it does cost a temporary hike in energy costs, which can be mitigated on an individual level. If the cost of doing so is a rerun of the 1974 Power strike then I have no problem with that personally, since I’ve organised backup power for heating/cooking and lighting.

    If push comes to shove we’ll stand around a brazier in the street burning the garbage. Better that than let the Commies and Watermelons win.

    Putin? Fuck Putin though. Who do you think finances these cnuts like Extinction Rebellion and Just Stop Oil. Admittedly, it might be George Soros as well.

  14. Take THAT, Putin!

    The same politicians/media outlets who repeatedly tell us that Russia is on its economic knees also repeatedly tell us that Ukrainian victory is inevitable and only needs a final ten billion or so of our money.

  15. JG – I was being sarcastical, but I’m sure the sanctions are hurting the Russian economy to some extent. Unfortunately they’re hurting us a lot more and Russia is raking in more oil money than before so, strategically, we’ve basically shot ourselves in the face. An economic Charge of the Light Brigade. While simultaneously emptying out NATO armouries to prolong the war without changing the outcome.

    Wouldn’t be surprised if XR were being funded by the FSB or Gazprom, Russia has been very keen to discourage Western countries from fracking their way to energy independence since the 2000’s energy revolution in the United States.

  16. “It’s worth it to “weaken Russia” tho.

    Take THAT, Putin!”

    There is no thread that “Steve” can’t turn into a pro-Putin (or anti-Semitic) one.

    Truly a polymath. Either that or a monomaniac.

  17. I have a colleague who is convinced that Putin funds the Express, the Mail, and the Conservative Party. “That headline was written in the Kremlin!” We just politely let him run out of steam and then move onto something else.

  18. If the inflation forecasts are right recent graduates will be paying 21.6% on their student loans next year. That should plug some holes in the deficit.
    Or they could charge VAT on interest, business rates, corporation tax and so on.

    /sarc

  19. I can remember my father warning me never to become a Churchill worshipper. He was the man for the hour in 1940 but the rest of his political career was largely poor stuff.

    I did feel a glimmer of sympathy for him though when I learnt recently that his mother had swindled him out of part of his inheritance.

  20. I can remember my father warning me never to become a Churchill worshipper. He was the man for the hour in 1940 but the rest of his political career was largely poor stuff.

    Most of his political career before 1940 was an absolute car crash as well, which was why he was in the political wilderness from the fall of the government in 1929 (he was Chancellor of the Exchequer) until his return as First Sea Lord in 1939.

    He should have retired from active politics after the disastrous (for the Tories) election result of July 1945, since he was clearly out-of-touch with both what the country needed and the electorate. That he was returned to office in 1951 was mostly thanks to Antony Eden rather than his own efforts, still approaching matters with a mindset more appropriate to the Gilded Era of pre-1914 than post-war 1951.

    Fortunately for the country, his body denied him the continuance that he wanted, otherwise he’d have been carried out of Downing Street in a pine box.

  21. Depends on where one looks at Churchill’s career.

    He was a far sighted Admiralty secretary ( apart from an anti U boat strategy, but then no one knew how to fight them ) and a “vigourous” Home Sec. He was a useless Chancellor in the 1920s ( he also had dud advisors, but he has to carry the can). He was wrong about India – I can’t remember his views on Ireland. After WW2 he was mostly a figurehead until he retired.

  22. Snag – maybe I’ll buy you a little red cape, so you can be Super Mad

    JG – Even if the Ukrainians do win, what do we get out of it? Crimea?

    Same as we got out of our last several wars: massive debts and loads of refugees.

  23. Bloke in North Dorset

    Churchill was a dangerous war time leader at first, trying to micro manage operations in Denmark and Norway. It want until the Generals and Admirals managed to get him out of their way that he found his true role, that of communicator. Even then he had to be kept away from interfering at times once policy had been agreed.

  24. @rhoda klapp:

    are you a Mark V Spitfire?

    Don’t reveal my secret identity; they’ll put me in a museum!

    As for prudence vs. profligacy, the only time we managed prudence was when money was voted by actual taxpayers. It always seemed sensible to me to scrap the Lords & Commons in favour of a house for genuine taxpayers (say, income taxpayers not employed by the state nor receiving UC, pension etc) and one for everyone else. First can vote on spending; the second taxes. Won’t give us miraculous minarchy, but it might just balance a budget or two.

    @philip:

    If the inflation forecasts are right recent graduates will be paying 21.6% on their student loans next year.

    Not sure if this was part of the sarcasm, but graduates don’t pay interest. They really have an extra income tax with a lifetime cap. Interest moves their lifetime cap; their monthly payment is unchanged.

  25. Bloke in North Dorset

    “ Commodity giant Russia is running out of tin.
    ● Due to a shortage of sheet steel, the country will soon face a shortage of tinned food and baby food lids, which were previously imported. If no alternative is found, businesses will be forced to shut down”

    https://twitter.com/jason_corcoran/status/1563577960468135937?s=21&t=7IM8Dxl-N8jGMSjYcK6S3g

    “ #Russia’s Finance Ministry reports that additional spending of 5tn rubles per year was requested by other ministries to deal with #sanctions effects (4% of GDP, or a 20% spending increase). Even if not all wishes will be granted, spending will rise drastically in the next years”

    https://twitter.com/jakluge/status/1557270316883263488?s=21&t=7IM8Dxl-N8jGMSjYcK6S3g

  26. @BiND – If I had a dollar for every time someone had said “Russia is on the verge of collapse”, I’d be able to pay this winters utility bills.

    The truth is that most of Russia outside the main cities are barely above subsistence level and even the cities have known worse privations in living memory, so they’ll substitute or say “Bring your own containers”.

    Hardly the end of the world.

  27. JG – yarp, but also the nature of the sanctions.

    We’re trying to starve Russia of (mostly) finished products and services such as computer chips*, financial instruments, fast food brands and Gucci watches. Most of these can be substituted with Chinese or domestic alternatives.

    They’re starving us of vital raw materials and energy supplies the entire European economic zone depends on, for which we have no alternatives in the short and medium term.

    Remains to be seen if service and light industry based economies can defeat manufacturing and resource based economies in a major conflict, but I’m gonna say a major lesson from WW2 is that the side with the greatest ability to generate war materiel is the side that’ll win.

  28. I’m sure China will sell them machines to make sachets.

    By the way, I was listening to a round table discussion on German radio this morning. Their consensus was that Ukraine will run out of manpower before next Spring and will have to sue for peace. They also reckoned that although the situation will initially be bad, Germany will get around the gas problem, but the whole debacle will massively strengthen both the left and right, who are going around saying “I told you so.” And people are listening.

  29. Their consensus was that Ukraine will run out of manpower before next Spring and will have to sue for peace.

    Ukraine doesn’t have a manpower shortage, it has a weapons shortage. Russia is the one with the manpower shortage. I sure hope their views on their “gas problem” are better founded than that twaddle.

  30. While simultaneously emptying out NATO armouries . . .

    A big chunk, maybe most, of the US military funding “for Ukraine” is actually going to restock (and improve) US inventories. Don’t know about all the other NATO members but Poland is busy building probably the strongest forces in Europe.

    . . . to prolong the war without changing the outcome.

    Your crystal ball still isn’t real.

  31. Bloke in North Dorset

    I’ve no idea why some people think that sanctions against Russia would bring instant downfall, but everything I read said it would be a grind. I suppose they read gormless stuff like the BBC.

    Anyway, we said it should never be allowed to happen again and I don’t remember anyone adding a caveat that unless it was a genocidal maniac in Moscow.

    “ “Russian mercenary Igor Mangushev (Bereg) made a performance with the skull of a Ukrainian soldier killed near Azovstal.

    In his speech, Mangushev said that Russia is at war with the Ukrainian idea, so all Ukrainians must be killed.”

    Still think trading with Russia is a good idea?”

    https://twitter.com/fheisbourg/status/1563853233839374336?s=21&t=wM4lnHif1tuDKVtwBy30mg

    And unless you’ve deliver got your head up your arse you’ll be well aware that Putin’s aim is to destroy Ukrainians and keep their resources.

    That’s before moving on to the Balts and Poland.

    Too many men in the middle:

    https://twitter.com/j_bloodworth/status/1563113518085591041?s=21&t=wM4lnHif1tuDKVtwBy30mg

  32. PJF – Ukraine doesn’t have a manpower shortage

    Optimistic. Their trained, experienced, motivated veterans have been badly attrited over the last 6 months. Ukie High Command has been chucking old guys and TA into the meat grinder since May/June. These guys aren’t building up experience, unit cohesion and confidence, they’re being used as human speed bumps.

    Idk if it’s possible to convey just how demoralising being on the wrong end of artillery is. Ukranians have been getting pounded day and night, for months, with no respite and no territorial gains. Just a sad, depressing, slow retreat as their mates get killed and replaced in between every burnt-out village they pass on the way.

    I’m awed by their stoicism and the physical courage they’re showing, but this isn’t sustainable. It’s like watching a boxer die on the ropes, except it’s an entire country. Sunk cost fallacy also applies to war, unfortunately.

    Russia is the one with the manpower shortage.

    They entered Ukraine with something like a 3:1 disadvantage in manpower (something like 200,000 men on the Rooskie side, about 600,000 on the Ukie side). Despite this, they’ve been steadily kicking the shit out of our heroes for 6 months. Ukraine hasn’t launched a single successful counterattack of any significance yet, because they can’t. Which is why they’ve increasingly resorted to desperate stuff such as shelling atomic reactors.

    Russia, on t’other, is sticking with its original ~200,000 in-theatre. Most of whom aren’t even Russian regulars, they’re local militia, Chechens, etc. So the baddies have hundreds of thousands of troops sitting in Russia and Belarus, twiddling their AK’s, Slavically. They can send in division-sized forces at any time they choose.

    Hmm, I wonder why they haven’t done so. (Probably because they’re stupid or something, amirite)

    A big chunk, maybe most, of the US military funding “for Ukraine” is actually going to restock (and improve) US inventories.

    Massive reductions in inventory across the whole of NATO. We’ve been giving stuff away to Ukraine a lot faster than we can build replacements and it’s not 1945 anymore – armoured vehicles and missiles don’t get churned out in their thousands, we have small-scale production lines. It’ll take years to get NATO back to pre-war levels, and that’s in the best case scenario.

    Funneling more pork into Lockheed Martin isn’t going to change the outcome for Ukraine, because Ukraine doesn’t have years. But then, it wasn’t intended to benefit Ukraine, a country with the worst luck in its “friends”.

    Your crystal ball still isn’t real.

    I don’t remember anybody claiming magic future-telling powers, but I might have mentioned back in February that Ukraine can’t win this and that getting involved will be disastrous for us too. You dislike that opinion, obvs, which is perfectly fine by me. I don’t like it very much either.

    Of all sad words of tongue or pen, the saddest are these, “Steve was right, again!”

  33. Of all sad words of tongue or pen, the saddest are these, “Steve was right, again!”

    Initial response: up your own arse much?

  34. I’m awed by their stoicism and the physical courage they’re showing, but this isn’t sustainable.*

    *Steve’s opinion on what is sustainable and what is actually sustainable may differ.

    They entered Ukraine with something like a 3:1 disadvantage in manpower . . . Despite this, they’ve been steadily kicking the shit out of our heroes for 6 months.

    They’ve been able to achieve what they have because they enjoy a massive advantage in firepower. But firepower alone does not make combat power. They’re now saving the Donbas from the “Nazis” by utterly destroying it.

    And the “steadily” hasn’t been so steady. We saw the brilliant feint disaster around Kyiv, and the complete withdrawal of forces from the north. The Ukrainians counterattacked at Kharkiv and forced the invaders back to near the border, denying them the best logistics route for their reduced war aims. The Ukrainians halted the Russian advance in the south and forced them onto the defensive.

    Speaking of sustainability, the Russians just announced that they’re slowing the pace of their attacks in order to ” avoid civilian casualties™ “. Lolz for all.

    They can send in division-sized forces at any time they choose.
    Hmm, I wonder why they haven’t done so. (Probably because they’re stupid or something, amirite)

    Again, your opinion that they can and whether they actually can may differ. You should indeed wonder why they haven’t, but you’d rather just believe they’re being fiendishly clever like with their brilliant plan to make themselves look like utterly useless cunts in front of the entire world just in order to divert Ukrainian forces.

    Seriously, you seem to believe that the Russians have the easy ability to resolve the war in their favour in short measure, making it a fait accompli for the world to accept, but for mysterious reasons of amazing cleverness they’d rather drag it out and make themselves look feeble spazzers while their economy is increasingly battered and isolated.

    Massive reductions in inventory across the whole of NATO.

    Not really, it’s very specific and limited stuff. It’s not as if we’ve handed Ukraine our air forces and navies, or indeed much of our armies. Nine Himars out of five hundred and forty (plus three hundred and sixty [+ nine] more in production) with limited ammo doesn’t make us vulnerable to all those “massed Russian divisions twiddling their AKs Slavically”.

    . . . I might have mentioned back in February that Ukraine can’t win this and that getting involved will be disastrous for us too.

    Yes, you did. And some of us countered that while Ukraine can’t “win”, Russia can certainly lose. Yes, it’s going to be miserable beating the cunts down but it’s best done now instead of in five or ten when we really wouldn’t have any capacity. Russia’s withdrawal of supplies is the only hand they’ve got and we’ve called them on it. So they play it or they don’t, but they know if they do they’re fucked forever.

  35. Just a sad, depressing, slow retreat as their mates get killed and replaced in between every burnt-out village they pass on the way.

    Factually wrong.

    They are losing ground in the Russian’s area of focus — Lugansk and Donetsk — very slowly.

    They are making ground near Kherson, and to a certain extent Kharkiv. Those are much more important to them than the Donbas.

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