Ragging on Ritchie

Third Ritchie of the day!

You lucky, lucky people you.

Stock market returns have been (by the S&P) negative over the past decade. This is true but miselading. We were having rather a boom in Dec 1999 for example.


This is not chance: this is reality. Markets have run out of steam. They have no more value to add unless and until more people have access to more wealth in the world – something markets themselves cannot deliver and which those who run them resist. Put simply – those with wealth have found out there is a limit to how many new white goods, cars, music, and IT you need. And most of the rest are poor and can’t now afford houses, let alone anything else. In that case markets can’t expand.

A tad Marxian (no, not Marxist, just influenced by) don\’t you think? Capitalism will collapse of its own inherent contradictions stuff: what will the market do when there are no more markets to exploit?

But let\’s just concentrate on this part:

They have no more value to add unless and until more people have access to more wealth in the world – something markets themselves cannot deliver and which those who run them resist.

We seem to have got the horse and cart arse about tip here. Markets, that voluntary exchange thing, are the mechanism by which value is added so that there is more wealth in the world so that there is more for people to have access to.

And what have we seen in recent decades? Why, we\’ve seen the expansion of markets around the globe. What else have we seen? The largest creation of wealth that can be shared in the history of our species. And what has the result of that been? Ever more people able to share in this newly created wealth: which in turn has led to the largest fall in human poverty since Eve voluntarily exchanged an apple with Adam in return for the knowledge of rumpy pumpy.

Anyone like to post Ritchie a copy of the GCSE economics syllabus?

Hurrah! Ritchie\’s learnt something!

My word, will wonders never cease.

OK, he hasn\’t realised that he\’s learnt something but learnt something he has.

For much of the rest Worstall is just wrong and Guido’s instincts are right. Whilst on the economic blackboard of so-called rationality Worstall lives by which bears no relationship to reality it is true that it can be shown that a limited company cannot of course pay tax – the reality is that they do change where, when and by whom tax is paid and at what rate – as all tax planning and offshore proves.

Time to do the happy dance!

Yes! Corporations do indeed change, dependent upon all sorts of things, who bears the burden of a tax. This is exactly what I\’ve been saying all along. The company itself does not bear the burden: it\’s some combination of customers in the form of higher prices, workers in the form of lower wages and capital (or shareholders if you prefer) in the form of lower returns. Hey, even Vince Cable agrees with me on this.

And the legal structure around companies and taxation will change which of those groups bears corporate taxation in what portion. This has been my whole point all along!

So well done to Mr. Murphy for finally getting the point.

Who bears it in what portion, now that we\’ve sorted out the logical point, is an empirical question. One where we need to look to empirical studies for an answer.

No, I don\’t say that this is the last word on the matter, only that it is as far as I know a decently done attempt to work this out.

Burdens are measured in a numerical example by substituting factor shares and output shares
that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly
more than 70 percent of the burden of the corporate income tax. The domestic owners of capital
bear slightly more than 30 percent of the burden. Domestic landowners receive a small benefit.
At the same time, the foreign owners of capital bear slightly more than 70 percent of the burden,
but their burden is exactly offset by the benefits received by foreign workers and landowners.
To the extent that capital is less mobile internationally, domestic labor’s burden would be lower
and domestic capital’s burden would be higher.

Please note this though:

As with any simplified model, the analysis is silent about some
potentially important issues – such as the effect of the corporate tax on savings, growth and other
dynamics – that may also have important effects on corporate tax incidence.

There are other papers which (purport) to show that these other important issues lead to the workers\’ wages falling by more than the corporate tax raised. That over time, a £1 raised in corporation tax reduces wages by more than £1. That is, that the incidence upon the workers is more than 100%.

Now I don\’t claim that either of these studies are the be all and end all of the question. But I do insist that now, as above, we\’ve got over this logical point it is possible for us to have a meaningful discussion of who actually does bear the burden of corporate taxation.

I say the majority is carried, at least in an open economy, by labour. Anyone want to try and prove me wrong? Richard?

It is to giggle with Ritchie

So, Richard Murphy, arch exponent of the \”if we tax them more they won\’t leave\” argument.

The reality is they are ‘looking at’ some departments relocating according to the Telegraph.

Not quite the same as Goldman leaving London.

Oh, but they are in part leaving! Or thinking about it as a result of higher taxes.

So where does this leave the argument that the Laffer Curve doesn\’t exist/isn\’t relevant?

Hmm, well, here actually:

And let’s also be clear: the time will come when we will simply have to change the basis of bank taxation to ensure that artificial relocations don’t work.

It’s possible: unitary taxation would do it.

So, let\’s think through that shall we?

The Laffer Curve doesn\’t exist/isn\’t relevant. This is the idea that there is some tax rate above which revenue collected starts to fall (and that there is equally some tax rate below which revenue increases). And vice versa for both of course.

Now Ritchie is an arch exponent of the idea that this is all entirely discredited/irrelevant/applies to very different tax rates than the ones we have/you\’re all neo-liberal bastards for bringing it up.

Now at the moment it is indeed easy for a company to shift its tax residence. It\’s one of those European Union things: free movement of people goods and capital. And companies, being legal persons, have the same right of free movement as individual people do. Further, you get taxed where the head office is, not where the economic substance of your activities takes place.

OK, now, so if we thought that the tax rates we were imposing were likely to make people move to avoid them, what is the implication of that? Yes, we\’ve implicitly accepted that the Laffer Curve is not discredited, is relevant, applies at our current tax rates and isn\’t the phantasm of neo-liberal bastards.

And even if we insisted in public that the Laffer Curve just didn\’t exist then what would we do about such a situation, if we wanted to raise tax rates still further?

Quite, we would change the rules about companies being able to move and restrict their ability to pay tax where the (highly mobile) head office is rather than the (highly immovable) economic substance of their activity is.

We would argue for a move from purely residence based taxation to unitary taxation for example.

That is, in order to avoid moving over the inflection point of the Laffer Curve, to where revenues decrease at higher rates, we would attempt to shift the Laffer Curve so that the inflection point was at higher tax rates.

And all of that means that however much Ritchie says that the Laffer Curve is entirely discredited/irrelevant/applies to very different tax rates than the ones we have/you\’re all neo-liberal bastards for bringing it up, he does actually believe it for his proposed actions are exactly what we would expect from someone who does.

Amusant, non?

Today\’s Ritchie!

So if the markets lead a double dip is nigh on certain.


So the man who tells us that markets don\’t and cannot predict slumps (because they didn\’t predict the, erm, slump) now tells us that markets can predict slumps.

Gotta love this intellectual consistency thing.

Ah, Ritchie, the gift that never stops giving

Third,we have to pay teaches more.

Well, yes….

However, the rest of it….

The basic argument is that wages paid by businesses like Tesco are too low and that this, plus the lack of tax money being spent on education means that we\’re locked into an underperforming economy by dint of the effects of a) depriviation and b) underspending on education.

The solution is thus that companies must pay more tax to fund education.


But average full time equivalent pay at Tescos in 2008 was under £13,000. Now, I know that might be distorted by pay in Asia – but the majority of employees are in the UK and so whilst pay may be higher than that in the UK on average it remains massively below UK average pay however calculated, which exceeds £20,000 by all measures used. And Tescos are the UK’s biggest private sector employer.

Lambert says that underachievement is linked to free school meals. These can be claimed by anyone with pay of less than £16,040. That’s on average all the staff at Tescos.

So like it or not Tescos, and employers like it, are paying the wages that ensure people claim free school meals which seem to be linked with a lack of aspiration and poor education results.

The solution to this is that there should be…. wait for it…..

The second is to massively reduce differentials in society by serious redistribution of income and wealth

You couldn\’t see that one coming, couldn\’t you?

Now there\’s a logical error here. If we\’re going to talk about how much more redistribution we should have then we need actually to be talking about how much redistribution we already have. We cannot simply look at market incomes and decide that more should be done: we have to look at market incomes plus what we already do to see whether more redistribution is justified or not.

Ritchie of course fails to do this.

But the real howler is here:

Third,we have to pay teaches more. Especially those in difficult subjects. It’s absurd for example that few state schools can offer really good science curricula now. This has nothing to do with quangos or anything else. this is undervaluing education. and business must pay for this by paying more tax.

Firslty, there\’s the question of whether we do or do not pay enough for there to be a decent State education system. Cross country comparisons seem to show that Finland (often rated the best State education system in the world) spends less per pupil than we do (yes, adjusted or standard of living etc). Sweden is rated very well and they also spend less per head than we do. But their structures are different. For example, Finland has something like the grammar/secondary modern split. It\’s not at 11, true, a couple of years later, but there are two different school systems, one for the academic goats and another for the vocational sheep.

It\’s just ain\’t yer Auntie\’s comprehensive system.

Sweden of course famously has school vouchers.

Within country comparisons also don\’t seem to show a lack of resources as being the problem. Private day schools (when you include capital and pensions budgets) seem to have similar costs to the State system. Again, famously in the US, parochial schools have much better results on much lower budgets than the State schools.

So we\’d be justified in at least thinking that perhaps it\’s the structure of the education system, the way the budget is allocated, which is the problem, not the size of the budget itself.

But the truly barking part is that business taxation should rise to pay for the effects on education of low wages.

For as Vince Cable and even Larry Elliott have agreed, businesses don\’t pay taxes. People do. And in an open economy like ours, the largest share (according to the Congressional Budget Office at least, for the US) 70% of the burden of corporate taxation is carried by the workforce in the form of lower wages. Mike Deveraux (who Ritchie would never admit could be right about anything) has a paper out there that a £1 raised in corporate taxation reduces workers\’ incomes by more than £1.

And it\’s this (something I\’ve already mentioned over at Sunny\’s place) which absolutely drives me up the fucking wall about the varied unthinking leftists we have proposing policies.

Some of the goals I share: a better education system being one of them. Some of them I don\’t particularly: equitable distribution in the sense of more equal distribution isn\’t one of the scabs of our society I particularly care to pick. But my ire comes from those proposing things which will be entirely counter-productive. Things which on the surface sound vaguely plausible (Tax companies more to pay to teach Diddikins to read!) but on examination turn out to be barking mad.

Follow Ritchie\’s chain of logic here. Companies don\’t pay high enough wages which leads to deprivation. We should thus tax companies more to pay for the deprived to get a better education.

But on examination we find that the vast majority of corporate taxes come from lower wages for the workers: so the actual suggestion is that we should lower wages in order to deal with the effects of lower wages.

It\’s barking, innit?

In praise of Ritchie

Fair play:

The winner was crusading accountant Richard Murphy, of Tax Research UK.


However, now that we know where his expertise lies, in accounting for corporate structures, might we be able to encourage him to remain in his specialty? Rather than trying to redesign both the financial markets and the entire economy (to say nothing of the tax system itself), areas where he clearly knows little?

Today\’s Ritchie

The man\’s a marvel:

FT.com / Reports – Clean tech sector needs more capital.

That’s why we need green bonds

That’s why we need a Green New Deal

So, the clean sector needs more dosh. Hm, so what is the mechanism that we\’ve currently got to provide more dosh for the clean sector? Yes, it\’s the EU\’s cap and trade system. By making emissions more expensive it makes capital investment in non-emissions more profitable and thus increases the amount of such investment.

Great, eh?

Ah, but no, you\’ve missed the genius of Mr. Murphy\’s logic:

Now let’s note what this broker does:

Tullett Prebon operates as an intermediary in wholesale financial markets facilitating the trading activities of its clients, in particular commercial and investment banks. The business now covers the following major product groups: Volatility, Rates, Non Banking & Sterling Cash, Treasury, Energy, Environmental, Credit, and Equities. Tullett Prebon’s electronic broking division offers electronic solutions to these products. In addition to its brokerage services, Tullett Prebon offers a variety of market information services through its IDB Market Data division, Tullett Prebon Information.

So they trdae in a great deal of what is ’socially useless’.

Please feel free to go.

I note that word \”environmental\” in there. So what do they do?

TP Global Green continues to build on its established presence in the emissions market through brokerage of European Union Allowances (EUAs), Certified Emissions Reductions (CERs), Emission Reduction Units (ERUs), Options on EUAs, CERs and ERUs, and Voluntary Emission Reductions (VERs).

Oh, they make the cap and trade markets work. Gosh, how socially useless of them.

So, we need to have more investment in clean tech but those who by their actions encourage greater investment in clean tech are socially useless.

No, that\’s a Good \’Un, even for Ritchie.

Ritchie doesn\’t do nil nisi….

Let the body cool first, eh?

He, more than most mathematised economics. Which means he had to assume people were rational. In the process he broke the link between economics and reality.

Then he assumed the existence of stable equilibria in an economy – which is contrary to all known evidence. So once more he remeoved economics from the realms of usefulness.

And he wrote a textbook that has created more bad economists dedicated to harming the society in which they live than almost any other.

So what he got a Nobel prize? His legacy is dire.

Paul Samuelson has died. A Nobel laureate economist he has a lot to answer for, and his legacy (eulogised in the FT by the BBC’s Stephanie Flanders) is pretty dire.

And Ritchie presumes to lecture us on ethics and morality.

Update: and of course, Ritchie is too dim to realise that he was one of the greatest popularisers of Keynes, Ritchie\’s economic hero….

Glorious Ritchie!

A pair for today:

The New Economics Foundation challenges one of the most fundamental tenets of conventional economics today – that the price of something can be equated to its worth.

And if we are not to price things by the worth that people put on them, what then?


I think neo-liberal economics is a lie. It does not seek to maximise well being. It seeks to shift resources from many to a few.

Gosh, so that\’s why we neo-liberals argue for lower taxation on the poor, for globalisation so that the global poor might grow rich, against tariffs which are a subsidy to domestic capitalists and why we continually argue that as everyone has a different definition of their own wellbeing that everyone should (excepting those things which must be provided both collectively and with the monopoly of coercion of the State) disperse of their own resources as they wish so as to maximise their wellbeing as they see it.

I\’d never realised that what we were actually arguing for was to shift resources from the many to a few.

I think much right wing and libertarian philosophy is a lie seeking subjugation for a majority.

\”Let it all hang out\”, \”Do as you would be done by\”, \”Navigate your own path from cradle to perdition, as you see fit\”. Yes, I can see the intent to subjugate in those.

I think many say we can live without limits now, and that is a lie: we live in a finite world.

Given that the first principle of neo-liberal economics is that resources are scarce this is pretty difficult to combine with lie 1) really.

I, for some reason, seem to be made of grit.

He thinks he\’s John Wayne now?

Fascinating to see someone arguing for more State control, higher taxes and the ever expanding reach of the bureaucracy thinking he\’s swimming against the tide as well…..

Today\’s Ritchie


Deloitte\’s say that tax avoidance by large corporates is around £2 billion.

HMRC says that tax avoidance by large corporations is around £3 billion.

Ritchie says that tax avoidance by large corporations is around £11 billion.

In Ritchie world the HMRC figures are proof that Deloittes are wrong and Ritchie is right.

Update: Today\’s Ritchie bonus:

It so happens that HMRC are much closer to my estimate than Deloittes estimate – and I think that is clear indication of which is more credible

Debate over

Today\’s Ritchie

There\’s something close to fascistic about some of his ideas:

Let’s get over this fetish with rating agencies: the reality is the markets will provide the cash and if they don’t we’ll require that bankers do so by lending money to the government through Treasury Deposits.

Forced loans now….

Today\’s Ritchie

My word, is there no beginning to this man\’s knowledge?

It is important to stress the fact that this report is about tackling tax avoidance. This is distinct and different from raising taxes. This is the wrong time for the UK to raise taxes: they could shatter a fragile economic recovery as they are equivalent to spending cuts in their economic impact because they such aggregate demand out of the economy. Tackling tax avoidance is different. Whilst the aim is, of course, to stop revenue loss the impact is different from raising taxes because stopping tax avoidance actually increases voluntary tax compliance by most of the population who do not think some (and most especially the richest) are getting away with tax abuse that they cannot have access to, largely because wealth is required before tax avoidance pays in most cases.

Somewhere out there Keynes is revolving in his grave.

Whether you suck aggregate demand out of the economy by raising tax rates or whether you suck aggregate demand out of the economy by increasing collection of taxes already extant makes no damn difference to how much aggregate demand you\’re sucking out of the economy.

You\’re still providing a fiscal contraction by increasing taxes collected and reducing the budget deficit.

Remember, this is the man who is proud of not having paid attention to the economics part of his economics and accounting degree after the first term. \’Coz it were all rubbish, wern\’ it?

Lords preserve us from the ignorant…..

Well Done Ritchie!

So Reform proposes that:

Research for this paper indicates that the public sector workforce needs to reduce by at least one million people (15 per cent of the total) if the structural deficit is to be eliminated, over a period of years.

Hmm, we\’ve a large structural deficit, one which we need to deal with in some manner.


Ritchie then tells us that:

This is how ludicrous this proposal is.

But what is more ludicrous is the economics. 1 million unemployed means, when there is a lack of demand in the economy, which will spiral out of control with all these extra out of work, that all these people will remain unemployed – at cost to the benefit system.

Oh dear.

That\’s not a defence of a structural deficit nor an attack on closing it over time.

That\’s a defence of a cyclical deficit.

If only Ritchie knew enough economics to recognise the difference…….

How to finance the Green New Deal

In their new report.

Green Quantitative Easing of course!

In this way, quantitative easing could be used to increase long-term, sustainable economic activity and with it a huge growth in jobs. The Chancellor, Alistair Darling should announce in his pre-budget report that the extensions in quantitative easing would be used to fund a Green New Deal, as called for by Gordon Brown in the run-up to the G20 meeting.
There are historical precedents in crises for governments to generate debt-free money to fund massive projects, Abraham Lincoln paid for the American Civil War by printing $432 million in new greenback bills, with Congressional authorisation. The French revolutionary government was financed by the creation of assignats.

Those might not be the very best of examples you know…..

To his admirers, Abraham Lincoln (1861-1865) is remembered as “the Father of the Union.” But the first Republican president was an inflationist in monetary affairs, and his policies led to consequences that are still visible today. To pay for the Civil War, Lincoln abandoned specie and launched a paper dollar (the “greenback”) that resulted in rampant price inflation.

The Civil War led to an enormous growth of federal spending, from $66 million in 1861 to $1.3 billion four years later.[7] Lincoln tried to finance the war initially with government bonds, but public demand for specie payments led to their suspension at year’s end. Lincoln took advantage of the fact that the United States was on an inconvertible paper standard by signing the Legal Tender Act of 1862, which authorized greenbacks to pay for the war. Initially limited to $150 million, a second $150 million issue was approved in July and a third $150 million issue passed in early 1863.[8] By mid-1864, greenbacks were worth 35 cents in gold. But at war’s end, they had risen to 69 cents on the prospects of future gold redemption.[9] Prices rose 110.9 percent from 1860 to war’s end.

(A biased source I agree but the facts are as they are).

Assignats were worse:

Assignats were paper money issued by the National Constituent Assembly in France during the French Revolution. The assignats were issued after the confiscation of church properties in 1790 because the government was bankrupt. The government thought that the financial problems could be solved by printing certificates representing the value of church properties. These church lands became known as biens nationaux. Assignats were used to successfully retire a significant portion of the national debt as they were accepted as legitimate payment by domestic and international creditors. Certain precautions not taken concerning their excessive reissue and comingling with general currency in circulation caused hyperinflation.

Originally meant as bonds, they evolved into a currency used as legal tender. As there was no control over the amount to be printed, the value of the assignats exceeded that of the confiscated properties. This caused massive hyperinflation. In the beginning of 1792, they had lost most of their nominal value. In 1796, the Directoire issued Mandats, a currency in the form of land warrants to replace the assignats, although these too quickly failed.

Don\’t forget, these are the examples that the Green New Deal themselves put forward as evidence of the likely success of their plans.

One doubling of the price level in 5 years and one hyperinflation followed by a second hyperinflation…..these they think are recommendations?

Yes, by the way, Richard Murphy is involved here.

We also get the £25 billion from tax avoidance in tax losses. Even Murphy\’s own report this figure comes from says that £25 billion is the summation of Parliament\’s intentions, tax planning, tax avoidance and tax evasion.

They seem to think a Tobin Tax would raise £400 billion a year: that\’s so cute of them. They\’ve obviously not understood the implications of that Austrian think tank (no, not government) report.


We believe it essential that part of this wall of money, much of it saved in funds that create no new investment in the economy, has to be used more constructively to create a Green New Deal.

Y\’see, pensions savings are often invested in extant shares and bonds. Thus they don\’t mean \”new investment\”, just that ghastly secondary market. But, we, we will be different! Green Bonds!

It must be liquid so that people can buy in, knowing with confidence that they can get their money back when they want.

Which means that people must buy Green Bonds on the secondary market because for each seller there must be a buyer. Which means that, after the initial burst, the vast majority of the Green Bonds will be trading in the secondary market and not providing any new investment (the stock is of course, after a few years, going to be hugely greater than the flow, by definition almost).

Meaning that we\’ve just replicated the financial markets at great cost and to no effect. Aren\’t we wonderful!

This is also excellent, about Green savings vehicles:

It must be capable of paying real rates of return.

Well, yes, but that\’s the problem, d\’ye see?

Without carbon taxes or cap and trade, green investments can\’t pay a real rate of return because they\’re more expensive than not green projects. This is the classic externalities problem of course.

But once we\’ve imposed either carbon taxes or cap and trade, thus priced the exteralities into market prices, we don\’t need to have green bonds or green investment schemes. Because our traditional savings and investment methods will do just fine, for such green projects will now be capable of paying real rates of return.

In short, the plans either won\’t work or they\’re not needed.

Anyway, I\’m bored with these fools and knaves now. It becomes tedious continually pointing out that these idiots simply don\’t understand what it is that they\’re pontificating about.

A couple of Ritchie\’s nuggets

The reality is that tax is paid by consent in the United Kingdom. This may not appear to be
the case for those in employment with limited investment income, but for those who are self
employed or who run companies the relatively high rate of compliance with tax law is the
consequence of voluntary disclosure to HMRC since the resources it has available to pursue
those not willing to pay are very limited. This rate of voluntary compliance is dependent
upon widespread acceptance of the tax system being, despite all complaints made, broadly
When additional revenue is being demanded the obligation upon political parties of all
hues to close loopholes exploited by those avoiding tax will be high since the existence of
persistent tax avoidance, especially when undertaken by major corporations and those with
significant earnings, will undermine the widespread perception of tax justice that exists at

There\’s some logic missing there really. To put his suggestion simply.

The poor and low earners don\’t have much opportunity to dodge tax. The rich do and we don\’t have enough taxmen to stop them. Thus we should crack down more heavily upon the rich because we rely on them voluntarily cooperating with the tax system……


The UK’s domicile rule should be abolished as a first step towards simplifying the UK’s
overly complex rules on personal tax residence.

Shrug, whatever. But it\’s going to make this more difficult:

Any such rule must also include
significant anti-avoidance rules so that those leaving the UK to live in a location with low
or no taxes and no history of tax cooperation with the UK should face considerably higher
obstacles before being considered non-resident than do those leaving for locations such as
other EU countries.

Because of course tax domicile also applies to those who leave as well as to those who come. To skip inheritance tax for example you\’ve got to be non-dom, not just not-resident. I\’ve seen no sign anywhere that Ritchie has even considered this point.

There should be reform of the rules on company residence so that the artificial relocation
of a company’s place of management and control in an effort to escape the UK tax net
becomes considerably harder to achieve.

Sorry mate, simply not in the powers of the UK Government. That\’s EU law that is, free movement of people, goods and capital. And yes, companies count as people here (they being \”legal persons\” you see?). Brussels defines this, not Westminster.

Radically reform the way in which small companies are taxed to both simplify current
arrangements and prevent abuse – this would require the income of such companies to
be treated as belonging to their shareholders unless those shareholders are not resident
in the UK, so preventing tax deferral by use of corporate structures.

Fascinating. He regularly rants that Jersey is a nest of vipers for doing exactly this.

Introduce an additional tax charge on investment income above a set limit so that
it is taxed at rates similar to those applied to earned income when national insurance
is taken into account to reduce the incentive to shift income between partners in a
relationship and to create fairness between those living on earned and unearned income,
which does not exist at present.

Oh dear. Seems to have forgotten that national insurance is, well, national insurance. You pay in to get stuff out. Like unemployment pay, pensions, just to give two examples. If you\’re self employed then you pay lower NI…..and you also get a lot less help when the work dries up. If you live on investment income you don\’t pay NI at all. But then nor do you get unemployment pay nor a State pension.

Y\’see, he\’s forgotten that if people pay their insurance premiums then they\’re supposed to get the insurance that premiums buy.

His final lines:

It is not possible at this juncture to quantify precisely the benefit that would result from
this programme of tax reform. It is reasonable to expect the benefit to considerably exceed
£10bn per annum.

Oh aye? Yet another figure plucked entirely from the air then. No doubt by the next report from Mr. Murphy this will have morphed into a fixed and exact figure, for, you see, he\’s a habit of making unsubstantiated assumptions in report n+1 into solid facts in report n+2. By referring back to report n+1 of course. See, there \’s a reference!

Typical Murphy nonsense and sadly the peeps at the TUC are stupid enough not to realise it.

Ritchie\’s report cont.

He\’s not even capable of quoting himself accurately. The new report:

The TUC published its report on tax avoidance in the UK entitled The Missing Billions1 in
February 2008. That report suggested that the UK was losing at least £25bn a year as a result
of tax avoidance activity, £13bn of this resulting from the actions of individuals and £12bn
arising from tax avoidance activity by companies.

No, that\’s not what Ritchie\’s own report said. This is:

If the estimated loss is extrapolated
across all of these 700 companies then the total corporation tax expectation gap
might be some £11.8 billion. This is an increase from £9.2 billion, which was the
estimate made the last time a similar exercise to that undertaken here was completed,
relating to the period to 2004 30.
As a proportion this may be the highest gap of all. Much may be due to legitimate tax
planning, but by no means all is. Some, undoubtedly, is due to tax avoidance.

See what he\’s done there? In the first report he\’s got tax planning (otherwise known as exactly what Parliament intended and wanted companies to do: the R&D tax allowance as an example, the training relief etc.) and tax avoidance mixed in with each other.

In the second report he\’s dropped the \”legitimate tax planning\” and simply stated that all of it is due to tax avoidance.

Come on now, how are we supposed to take seriously someone who cannot even quote his own conclusions accurately?

Ritchie\’s new report

Yes, another one for the TUC.

It\’s a cracker as well. In the opening lines:

This paper does four things.
• It assesses the reforms the UK Government has proposed in that period to tackle
tax avoidance. It estimates that measures undertaken by the Government since Budget
2008 have saved the taxpayer £1bn.

Ooooh, goodie! We like it when the taxpayer saves money. So, what have they done? Reduced spending? Well, no not that. Have they become more productive? Well, no, not that either.

Actually, they\’ve raised more tax money.

Yes, seriously, in Ritchie world, collecting £1 billion more tax is the same as \”saved the taxpayer £1 billion\”. As opposed to the real world meaning of \”cost the taxpayer £1 billion\”.

Higher taxes are, you know, a cost to taxpayers?

Speaking with forked tongue

Today\’s Ritchie installment:

Alistair Darling is under pressure to slap a punitive new income tax rate of up to 70 per cent on top earners in a “tax-the-rich” mini-Budget next week, it emerged last night.

Gosh! But put your mind at rest:

This is nonsense: I am certain there is no such plan at all


But what\’s this?

Well, I rather hope that is what the Treasury is thinking in due course – because much of it comes from the Compass tax report

Ah, yes, that\’s right, the Compass report that insists that we should raise marginal tax rates on the top decile of households to 75%.

So, what we\’ve got is the man who wrote the report calling for 75% marginal tax rates insisting there are no plans or pressures to create marginal tax rates of as high as 70%.

Consistency is so undervalued in today\’s world, don\’t you think?

This is fascinating

Leave aside that it\’s about trucks and look at the general principle:

Simon Nicholls, Mr Denby’s lawyer, said: “There appears to be a lacuna in the regulation. There is a general principle that if there is an ambiguity in the law it should be read in favour of the defendant.”

That\’s the bit that Ritchie wants to overturn with his insistence that any ambiguity in the tax law should be read in favour of the prosecution, HMRC.

He\’s nothing if not ambitious, is he, desiring to overturn one of the basics of Common Law.

Today\’s Ritchie

Certainly a bee in his bonnet.

And all those who support the secrecy these places provide to facilitate this abuse should be ashamed of themselves. By offering your excuses you will, undoubtedly, be causing hardship beyond imagination and death as well.

Which is why I campaign for the abolition of secrecy jurisdictions – the BVI and Cayman included.

Strong words about an organisation using the courts to enforce their legal claim to an unpaid debt really.

In fact, there\’s nothing about secrecy jurisdictions facilitating this at all. Richard Murphy himself, as an individual UK citizen, could use exactly the same prcedure to insist upon payment of a lawful debt in exactly the same way.

Indeed, I think it odds on that in his business career he did so.

The hard right and a secrecy jurisdiction acting in concert: no surprise there.

Secrecy jurisdictions are captured states that are used to promote the hard right.

There will be howls of protest – but let’s be clear.

Err, perhaps howls of laughter at that absurd conjunction. For this is about the Swiss voting to ban the building of new minarets. And I\’m having an extremely hard time thinking up any manner at all in which Swiss bank secrecy makes the population a group of religiously intolerant xenophobes.

I can think of something interesting that could be said about this story:

The 57 per cent approval of the minaret ban

That there\’s a difference between human rights, perhaps liberty, and what we can get the masses to vote for on any particular day or subject. But then, you see, if we admit to that, that the expressed will of the hoi polloi is not to be listened to in some circumstances then we then need a system of deciding when it will and when it won\’t be listened to.

As in, for example:

But she’s wrong about the electorate. Compass did some polling with YouGov on a sample of more than 1,000 people to support this report, which I co-wrote. The polling was pretty emphatic……..The finding to this one was 78% strongly in favour or agreeing;…….Here the finding to this one was 59% strongly in favour or agreeing…….And the finding to this one was 62% favoured the first statement…….

As we\’ve already noted, just because the people will vote for it does not mean that it\’s something we should do. Which is a teensie little problem for Ritchie there who is arguing that we should do it because the public seem to like it.