Ragging on Ritchie

On the economics of taxation

Guess which retired accountant needs to read up a little bit more on the economics of taxation?

Capital is an accumulation of property rights based on these and is not in itself wealth generating

That is why it should be taxed more heavily

The general consensus among economists is that returns to capital should be taxed more lightly than other sources of income precisely because the employment of capital is wealth generating.

And no, this isn\’t some neo-liberal baby eater consensus. It\’s how the achingly socially democratic Nordics operate for example. It\’s even the received wisdom at the OECD.

A tale of two charts

Ritchie gives us this chart:


It shows the distribution of household incomes in the UK. According to Ritchie it shows that there is clearly and obviously a bias in favour of the rich, one which we should do away with by taxing them more and redistributing that money to the poor. Do note that this is post tax and post benefit systems (although not post government supplied services which will roughly double the incomes of those in the poorest decile).

Here\’s another chart:


This shows the absolute standard of living of the poorest 10% in various countries. Yes, this is post tax and post benefits and makes attempts to include the value of government supplied services.

(By measuring at PPP and then translating those standards of living into a percentage of US median income we are able to get something which is truly comparable. The original underlying paper does indeed discuss such things as the more market based health care in the US against the free at the point of use most other places, differences in food prices and so on and still comes to this conclusion about absolute living standards.)

Well, as you can see, the absolute living standards for the poor in the UK, US, Sweden and Finland all seem to be around and about the same: between 35% and 39% of US median household income.

But as we can also see the redistribution in such places as Sweden and Finland leads to the top 10% of households enjoying only slightly above US median lifestyles while the UK and US systems seems to allow much greater than this.

So we would seem to have two systems of getting to the same end: that end being a certain lifestyle available to the poorest in the nation. We can have a very high level of curtailment of the living standards of those at the top and this lifestyle of 35-39% of the US median income. Or we can have much less curtailment of those lifestyles at the top and still have this living standard of 35-39% of US median income for those at the bottom.

Which you prefer, well, let\’s try and think through that. Which system provides the greatest amount of human joy and utility? The one where we take care of the poor and allow others to flourish or the one where we deliberately limit the flourishing and yet provide exactly the same standard of living to the poor?

Ritchie says limit the flourishing. I say provide the poor with the lifestyle while allowing the maximal flourishing possible consistent with doing so.

As Ritchie says:

That’s the difference between left and right.

That underpins what this blog is, in its UK context, about.

Well, quite, I think that is what his blog is about, it\’s also what this one is about.

Which version of the world, which socio-economic system, you prefer is entirely up to you of course. But I\’ll argue until the day I\’m dead that my preferred system is the only one which can possibly be called \”liberal\”.

Ritchie tells us all who really caused the crash

An interesting analysis really:

The reality is more significant. Ordinary people – the vast majority of people – were in reality priced out of some basics of living, like housing, by an elite. That elite – the holders of the vast majority of wealth – forced up the price of many assets – housing in particular. The result was people had to borrow more and more, and one income households had to become two income households and still borrow more and more, just to secure a roof over their heads.

So who were that elite?

On the evidence given there it was the local council planning committees.

The price of houses did not change at all during the boom: houses were, as they always are, at or around replacement cost. What did change in price was the right to build a house on a specific plot of land. A right that is artifically created and very much artifically limited by those planning committees.

The solution is therefore to change the method of allocating planning permission.

So, following Ritchie\’s analysis we get to burn the bureaucrats anyway.

Good Oh!

Oh dear

Yes, you can guess who this is from:

I wrote about short selling and the danger it causes a few days ago and the right wing blogosphere – blinkered to a man (are there any right wing women?) – led by Tom Worstall (as usual) responded with the usual clkaims that a) I had no clue on the issue b) there was no problem c) there were no consequences.

They are, of course, completely wrong. If you assume markets are efficient and allocate resources perfectly – as these bloggers do – then of course the outcome is always perfect. The reality is that markets are hopelessly inefficient much of the time – because they work on imperfect and not perfect information – and as a result the damage caused is substantial.

Dear Lord Almighty. Is there nothing this man cannot misunderstand?

The assumption that markets are efficient is not that they allocate resources perfectly. It is that markets process the information about what prices should be in markets efficiently.

Further, no one at all argues that markets work upon perfect information. Indeed, the assumption is precisely the opposite, that of necessity everyone always works upon imperfect information. \’Coz we\’re talkin\’ about the future, see? Which is inherently unknowable.

Indeed, if perfect knowledge of the present were possible then central planning would work. But, as has been pointed out in the socialist calculation problem, perfect information, perfect knowledge, even of the present is not possible.

So we do not, at any point assume perfect information: we assume exactly the opposite, imperfect information…and then go on to ponder what is the best method of processing that imperfect information to get as good a view of reality as we can….which turns out to be markets for they are efficient at processing such information as we do have.

Lordy be…..

Exploring Ritchie\’s logic

This is an amusing piece from our favourite retired accountant.

But this artificiality will not be the end of the problem. Copying the culture and failed policies of the Republic will be the biggest disaster for Northern Ireland. As the Republic has now resoundingly proven, building an economy on the basis of corporate tax rate competition does not work. That policy has virtually bankrupted the Republic. Why on earth would anyone want to replicate it?

Note the logic. Ireland had/has low corporate tax rates. Ireland had/has an economic collapse. Therefore Ireland\’s economic collapse came as a result of low corporate tax rates.

It\’s that last sentence there which is suspect. Suspect as in \”batshit crazy\”.

Ireland\’s problems came from being in the euro, meaning interest rates entirely inappropriate for a real estate bubble.

But of course for Ritchie the idea that the State doesn\’t take a substantial portion of economic activity is the cause of all troubles.

My lord the man has problems understanding markets, doesn\’t he?


FT.com / Currencies – Bets against the euro hit record levels.

Short-term speculators have raised their bets against the euro to record levels.

Positioning data from the Chicago Mercantile Exchange, often used as a proxy for hedge fund activity, showed speculators extended their short positions in the euro from 103,400 contracts to 113,900 contracts, or $18bn, in the week to May 7.

With complete contempt for society as we know it the markets attempt to bring down the Euro, utterly indifferent to the consequences for democracy, ordinary people, peace or anything else.

And you wonder why so many of us want hedge funds regulated?

Let’s start with defending society as we know it as the opening bid and move on from there shall we?

He gets his answer in the comments:

That’s not how futures markets work. There is an equal amount of long interest. Some people may be long but there is an equal amount of “speculation” or it could just as easily be “hedging”

To which our favourite retired accountant says:

How do you know

Why is the FT wrong?

Because of the way that futures markets work. By definition for every short speculator there must be a long speculator. For where is the short speculator going to buy his speculation from if it isn\’t from somone taking the other side of the bargain?

Think on it a moment. A short position is simply a bet. I think the euro is going to fall!

OK, great, now how can you make money out of that? Yes, that\’s right, you\’ve got to go along to someone show thinks that you\’re wrong. Someone who is willing to put their own money where their own mouth is. Someone, in short (sorry) who thinks that the euro is not going to fall. So, this other bloke, you give him some money (the premium) and if you\’re right in the bet and the euro does fall then you get some of the other bloke\’s (the long) money. If it doesn\’t fall, he keeps your money.

In an option, at least. With a future it\’s a even simpler. If the euro falls he gives you money, if it rises, you pay him.

By the very definition of it being a derivatives market there must be, by definition, as many longs as shorts.

Otherwise, who would the shorts be betting with?

Knickers twisted

Ritchie and the Tax Justice Network are up in arms that FIFA (the soccer bods) demand that FIFA be free of tax.

This is extraordinary.

Take, for example, the case of South Africa. It has spent a fortune building facilities for the Wold Cup and it seems unlikely that FIFA will be allowing it any return at all.

This is straightforwardly abusive, and abusive in the private interests of an enormously wealthy elite.

Right around the world people should be profoundly disgusted at this abuse of developed and developing countries alike.

Extraordinary, eh?

Following Christian Aid\’s superb report on the use of offshore tax havens in football, we thought we would draw attention to something else unhealthy in the not-so-beautiful game. This is South Africa\’s Revenue Laws Amendment Act 20 of 2006, which football\’s super-wealthy governing body FIFA demanded as a price for allowing South Africa to host the World Cup.

What this Act does, in effect, is to ensure that this struggling African country cannot tax super-profits that FIFA earns.


All of which makes Ritchie and the Tax Justice Network look a little dim really. For international organisations routinely don\’t pay local taxes. It seems to be part and parcel of being an international organisation.

Here\’s HMRC on the tax arrangements for the Olympics in London:

Who is likely to be affected?
1. The London Organising Committee of the Olympic Games Ltd (“LOCOG”,
the company set up to organise the Games), the International Olympic
Committee (“IOC”), and non-UK resident competitors and support staff
temporarily in the UK for the Games.
General description of the measure
2. These measures will exempt LOCOG from corporation tax and will provide
powers for regulations to be made in relation to the IOC and non-resident
athletes and other persons temporarily in the UK to carry out Olympicrelated
business. The powers will allow provision to be made to ensure
that the IOC\’s revenues generated from the Games, income of non-UK
resident athletes from their performance at the Games, and income of
other persons temporarily in the UK to carry out Olympic-related business
will not be chargeable to corporation tax, income tax or capital gains tax.

Here\’s the World Bank on staff taxes:

Under a treaty concluded with the U.S. government when our headquarters was established, foreign nationals are exempt from federal and state taxes on World Bank Group income. U.S. citizens working for the World Bank Group are required to pay federal and state taxes on their salaries. To keep after-tax income in line for all staff members, our salary scale is on a net-of-tax basis; staff members who are liable for income taxes receive a tax allowance. All staff members also pay local property, sales, and other non-income taxes. These tax arrangements are similar to those of other international organizations.

Here\’s the IMF on staff taxes:

Tax Equalization Adjustments

The IMF strives to treat all staff equitably regardless of nationality, a principle which extends to tax treatment. The Fund\’s base salaries in Washington, DC, are paid net-of-tax. However, because some staff members are liable to income taxation on their Fund earnings while others are not, tax equalization adjustments are applied to two potential sources of inequity:

* Tax Allowance for U.S. Taxpayers
Although IMF member countries have agreed to exempt from taxation Fund staff who are nationals of other countries, they may impose taxes on their own nationals. As the United States taxes U.S. nationals on their Fund earnings, the Fund pays a \”tax allowance\” to staff members paid on a net-of-tax basis who are subject to U.S. national, state, or local income tax on their Fund compensation.

Here\’s the OECD on staff taxation:

Emoluments are exempt from taxation in most Member countries of the Organisation, including France.

Here\’s the European Union on the taxation of staff:

As a European civil servant, your salary is not subject to national income tax.

And don\’t forget, this non-payment of local taxation now extends to MEPs as well! Yes, really, since the euro-elections of last year MEPs no longer pay UK income tax on their salaries. They pay the special EU rate, something which saves them around £1,700 a month on their tax bill.

So, there\’s nothing extraordinary about this at all. International organisations routinely don\’t pay the taxes that the rest of us plebs have to pay. International sporting organisations routinely don\’t have to pay the taxes that us plebs have to pay.

Oh, and did you notice the bit where FIFA is a charity? Charities don\’t pay taxes either. As the Tax Justice Network doesn\’t pay the same taxes that the rest of us plebs have to pay….and nor does the Scott Trust (which as we know owns the Guardian).

I do look forward to John Christiansen\’s and Richard Murphy\’s next visit to the World Bank, IMF, OECD and or EU and EU Parliament (and of course Guardian newsroom) you know. I really do.

This is straightforwardly abusive, and abusive in the private interests of an enormously wealthy elite.

They will tell them that, won\’t they?

And send in a cheque for what taxes the TJN doesn\’t pay like the rest of us plebs have to?

Ritchie on democracy

But electoral reform has to remain on the agenda. We cannot afford the Tories ever having the chance to secure a majority in its won right – the prospect for democracy in the UK is just too horrible to contemplate.

Apparently democracy doesn\’t include the possibility of people Ritchie doesn\’t like getting elected by the people.

Oh well done Ritchie!

Another confident claim from our favourite retired accountant:

The private sector is not creating jobs. None at all.

That would be why unemployment is rising by 47,000 a week then would it?

GEP used data from the Office for National Statistics\’ Inter-Departmental Business Register, which records all businesses in the UK.

Researchers discovered that on average a total of 47,000 private-sector jobs are destroyed every week — equal to 2.35 million a year. But another 53,000 a week — in other words, some 2.6 million a year — are created as part of the relentless \”churn\” in the job market.

Yes, he\’s tripped over the stock and flow concept again. What we measure as unemployment is the stock of people who do not have a job. Underneath that there\’s a huge flow of people from jobs disappearing to jobs newly created (and unemployment numbers include part of that flow as well, as people claim benefits for some short period of time while moving from old to new job).

If it were really true that the private sector is creating no jobs then all of that flow out of old jobs would be added to the unemployment lines. That isn\’t of course, what is happening:

The unemployment rate for the three months to February 2010 was 8.0 per cent. The rate was up 0.1 on the quarter and it has not been higher since the three months to September 1996. The number of unemployed people increased by 43,000 over the quarter to reach 2.50 million,

Allow me to round things a little…call it 45,000 jobs destroyed a week, 45,000 added to unemployment lines in a quarter. Now we can see that there are (and while this is both govt and private sector, the private sector is the vast majority of this) 11 times as many jobs created in a quarter as there is a rise in unemployment.

It\’s as Chris Dillow has repeatedly pointed out. Recessions, these rises in unemployment, are not when no jobs are being created. Nor are they when (particularly) more people are losing their jobs. They are when the creation of new jobs lags the normal destruction of old jobs inherent in the churn of the labour market.

We can also look at this again on an annual basis. If unemployment (extending that quarterly figure) is rising by 200,000 a year and the standard job destruction is 47,000 a week (2.34 million a year) then we must in fact be having 2.1 million jobs a year being created out there in the economy.

OK, so this number is a few months out of date:

The ONS has confirmed a quarterly increase in public sector employment of over 23,000 people, to 6.1m employees.

So call it a net increase of 100,000 a year for the public sector.

This means that the private sector is still creating 2 million or so jobs a year.

Somehow I just can\’t escape this feeling that private sector job creation of 2 million a year is both quantitavely and qualitatively different from \”The private sector is not creating jobs. None at all.\”

I\’m missing something here

For Greece has not – as is often claimed or implied – lagged behind Germany in raising productivity: on the contrary hourly labour productivity increased more than twice as fast in Greece than Germany during the ten years of the euro since 1999. Nor do frequent claims in the media of Greek ‘laziness’ stand up to scrutiny: average annual working hours are the longest in Europe (and hundreds of hours per year longer than in Germany!). The problem has been with nominal wage and price setting.

Due to strong differences in wage setting, Greek nominal unit labour costs increased by more than 30% since the start of EMU – and the increases in Italy, Spain, Portugal and Ireland were even higher – whereas in Germany they rose by just 8%.

Can someone help me out with what I\’m missing?

How can Greek labour productivity have increased twice as fast as that in Germany if nominal (and they do use the same currency) unit labour costs have gone up in Greece some three times the rise in Germany?

Aren\’t these really the same thing? Attempts to measure relative labour productivity and the changes in it? So how can one be pointing one way and the other another?


My friend and writing colleague George Irvin makes a simple but highly effective point. Greece still has a choice. It could abandon the euro and default on the bulk of its debt. After all, it worked for Argentina when it defaulted in 2001-02.

What is more it would nip contagion in the bud.

While I agree that Greece can indeed default, in fact I\’d agree that it should and even go as far as to say that it almost certainly will at some point, the idea that this will nip contagion in the bud is laughable.

Let\’s look at two scenarios. Investors (people, banks, insurance companies, pension funds, whatever) have Euro somelargenumberofsquillions lent to various eurozone governments. Those same eurozone governments also want to borrow euro notquiteaslargeanumberofsquillions in coming years.

1) Everyone scrambles together to make sure that those investors get back the money they have already lent in some manner.

2) One of those eurozone governments sticks up the middle finger to those investors and says \”You\’ll not get your money back from us\”.

Which of these scenarios is more likely to have said investors running for the doors on the loans they\’ve already made and refusing to make the potential ones in the future?

Which will increase the contagion?

Option 2, clearly.

Especially since the general feeling is that the eurozone itself won\’t let a sovereign borrower default: if it becomes obvious that they will then the pressure on those currently thought of as possible but not likely defaulters becomes greater….they have become more likely defaulters as that restraint against default provided by that view of the eurozone has been lifted.

Now I\’ve already said that I think default is not just likely but near certain. But you don\’t always start from where you\’d like to be. However, the idea that contagion, financial panic, will be reduced by such a eurozone sovereign default is laughable. It\’ll be triggered by it as there are those out there who really do believe that the eurozone won\’t allow such a sovereign default.

How absolutely incredible

Ritchie has just proved that markets cannot work:

This is an argument I have made here, often.

Markets can only work when there is choice. By definition that means there needs to be excess capacity. Unless there are vacant spaces in all schools there is no choice. But excess spaces are wasteful in terms of productivity. We can’t afford that waste.

There is no reason at all for this logic not to apply to all things. Markets require choice, choice requires surplus capacity, surplus capacity is wasteful and thus we shouldn\’t have markets in anything.

There\’s nothing special or specific about schools or education in this logic chain you might note.

Yet we do know that markets are, at times, more efficient than not markets. Thus we know that, at least at certain times and places, this logic chain is not in fact correct. So what is the fault in it?

It\’s in that word \”productivity\”. In an entirely static society, one static in terms of the technology of production and one static in the desires of the consumers, one where productivity itself is static, then the waste of resources by the creation of spare capacity can indeed be something which makes us worse off.

But is society static? Are either the technologies of production or the desires of consumers static? No, most certainly not.

Which is where markets do start to show their value. For what a market does is allow producers to vary their technology of production and also their items produced. And consumers can also pick and choose not only among these varieties but can also express their own changing desires.

We still have this \”waste\” of spare capacity of course: but we also have that continual increase in productivity as solutions to desires get ever better.

Just as an example. I\’ve heard it said that Gorbachov gave a speech in the late 80s, just as he gained power. In which he said that productivity per head had not increased in the Soviet Union since 1913. Yes, there were more people, there was greater capital accumulation and there was more resource extraction. But the actual efficiency with which those things were used had not changed over all of those years.

That\’s why the place was shit poor of course.

For over the same time period productivity in the market economies had been rising by 1-2 % a year, year after year. 70  years of cumulative 1% improvements is, given the joys of compounding, a 100% improvement. 2% over the same period is 300% (ie, at the end of the period production from the same resources is 200% or 400% of starting production from those same resources.).

That\’s one of the things about markets. They are discovery mechanisms as to what is the better way of doing things. And over time, the discoveries of what are those better ways completely swamp any of the inefficiencies of having surplus capacity in which markets can work.

Bonus point: you\’ll have noted those various attempts at measuring the increase in productivity in the provision of public services? You know, the NHS stuff and so on. Recall the fact that productivity hasn\’t in fact been increasing, rather regressing? At the same time that private industry was increasing productivity by some 25% or so over 15 years?

Quite, that\’s markets for you…..even though they do have spare capacity.

Green Party Manifesto

The very
way we measure economic ‘success’ today
shows the bankruptcy of business as usual.
‘Gross Domestic Product’ measures all the
economic activity in Britain – even the money
spent on picking up the pieces of our unfair
and unsustainable society.

Well, yes.

GDP measures value added. We think that picking up the pieces adds value. Thus we include the vale we\’ve added by picking up the pieces in our measurement of the value we\’ve added.

It\’s not really all that controversial or difficult an idea, is it?

Our energy policy is not just the best for climate change –
it also produces the most jobs:
energy source jobs per year per terawatt hour
Wind 918–2400
Coal 370
Gas and oil 250–265
Nuclear 75

Rampant stupidity. Jobs are a cost, not a benefit, of a plan.

Promote gender equality. The pay gap
per hour between men and women remains
as high as 38% for part-time workers

Complete bollocks. The gender pay gap for part time workers is actually a pay gap in favour of women. That is, average wages for women working part time are higher than average wages for men working part time (so say the statisticians).

To get this 38% pay gap you have to compare women working part time with men working full time. Which the statitistical authorioties have several times said is not the correct way to measure it: indeed, it\’s entirely misleading.

Support a National Minimum Wage that
is a living wage, at 60% of net national
average earnings (currently this would mean
a minimum wage of £8.10 per hour).

Helllooooooo mass unemployment! Minimum wages over the 45%-50% or so level of average wages do indeed have horrible effects on unemployment.

We favour a Robin Hood Tax – a tax on
financial transactions (see page 47) – but
because that would work best with wide
international agreement we do not rely
on it to fill the gap in the Government’s
finances, though we believe there is also
scope to act unilaterally by introducing a
tax on sterling foreign exchange transactions,
and that the UK should demonstrate global

Nope, it\’s illegal under EU Single Market rules. It\’s a tax on the free movement of capital and you\’re not allowed to have those.

Crack down on tax havens and other
methods of tax evasion and avoidance, raising
£10bn in 2010 rising to £13bn by 2013.
In particular press for a transparent international
accounting standard that requires
companies to report on a country-by-country
basis so that their profits can be located
and taxed.

Are you getting the same idea that I am about who has been writing this stuff for them?

I especially like the tax and economics bit of the Green’s manifesto

Can’t think who advised them on that!

Yes, it\’s Ritchie.

Ritchie want\’s to raise taxes on the poor

In fact, he wants to raise taxes on everyone. In his \”accountant\’s manifesto\” we have:

Deny tax reliefs of more than £5,000 a year to any person to prevent wasteful tax planning

The personal allowance is a tax relief. The personal allowance is currently £6,475 a year.

Therefore not only will that have to be reduced (and the elderly will lose their higher personal allowances etc) but no one will ever be able to claim any other form of tax relief at all.

I\’m unconvinced that this is a good idea really.

The rest of it is just as bizarre:

All accountants to be required to subscribe to a Code of Conduct requiring that they comply with the spirit as well as the letter of all law…


Companies to have a duty to stakeholders equal to that of shareholders

That\’s not actually possible. For the interests of stakeholders conflict at times.

Ritchie writes a report!

Amusing this. Full paper here.

The basic argument is that using tax havens is very bad indeed, oh yes! The Govt owned development corporations use tax havens and this is very bad indeed, oh yes!

So they shouldn\’t use them, oh no!

Absolutely nowhere is there even the merest consideration of the alternative. That those Govt run investment funds (and of course they are the people who would know for of course the State knows everything which is why we should do what the State tells us) know that the taxation policies of the developing countries damage foreign investment in those developing countries which is why they dodge such damaging tax policies by using tax havens.

That is, and if you\’re a Statist it\’s difficult to argue against it, if State bodies are using tax havens because those State bodies, who know all, realise that it increases the effectiveness of their aid then tax havens are indede doing something useful. They\’re mitigating the bad effects of bad developing country tax policies.

ie, tax competition works.

But the true ghastliness is this:

Richard Murphy is a chartered accountant and
graduate economist.

\”Graduate economist\” is usually taken to mean someone who did graduate courses in economics. Not someone who graduated in economics as their first degree.

And Richard\’s first degree was in accounting and economics at Southampton* and he\’s famously told us that he ignored all the economics after the first term because \”it wasn\’t right\”.

A touch of qualification inflation here perhaps?

* In the interests of disclosure I should point out that my own undergraduate (and only) degree was in accounting and economics at the LSE. But then I don\’t claim to be a graduate economist: indeed, I continually point out that I\’m no more than an interested amateur.

Bye Bye Robin Hood Tax!

Via, the IMF\’s report on financial sector taxation.

is not focused on core sources of financial instability. An FTT would not target any of the key attributes—institution size, interconnectedness, and substitutability— that give rise to systemic risk.

Its real burden may fall largely on final consumers rather than, as often seems to be supposed, earnings in the financial sector. No doubt some would be borne by owners and managers of financial institutions. But a large part of the burden may well be passed on to the users of financial services (both businesses and individuals) in the form of reduced returns to saving, higher costs of borrowing15 and/or increases in final commodity prices. … It is far from obvious that the incidence would fall mainly on either the better-off or financial sector rents

My point I think? That the incidence of the tax would not be on those eeeevil bankers, but on us plebs?

And my, how I have been mocked for making that point.

The ever Glorious Richard Murphy!

Lordie be, the man\’s got some nerve. So the IMF comes out and says that we shouldn\’t have a Robin Hood Tax, that we shouldn\’t have a financial transactions tax. We should, instead, have an insurance levy on balance sheets (or liabilities, same thing).

Richard then says:

I have recommended both taxes here

And he refers us to his own report, \”Taxing Banks\”.

And in that report he says:

As the report notes, the short term alternative of an insurance charge that some promote as an alternative to
financial transaction taxes does not have any of the benefits flowing from adoption of these taxes as noted
above, nor can it raise equivalent revenues. In addition, whilst financial transaction taxes should only eliminate
marginal trades but leave markets intact with ample liquidity, the proposed rate of the US levy at 15 basis
points is well above margins on many of the trades noted in this report and is consequently likely to be
harmful to the operation of some markets. This should not be the case for financial transaction taxes which are
to be preferred as a result.

That is, he specifically argues AGAINST an insurance style levy on liabilities and IN FAVOUR of an FTT.

The IMF argues entirely the opposite, against an FTT and in favour of a liabilities tax.

And this is evidence that the IMF agrees with Ritchie.

One more lovely line:

And amazingly financial transaction taxes have been ignored – incorrectly in my opinion.

No, they haven\’t been ignored. They\’ve been considered and rejected.