Listen to the arguments on financial transaction taxes

Posted on March 3 2010

Loved by the good | ToUChstone blog: A public policy blog from the TUC.

Nigel Stanley has, as I have before, waded into the debate on financial transaction taxes and the anti-union diatribe being pursued about it by Giles Wilkes on the Lib Dem (and seriously pro-free market) Freethinking Economist blog.

As Nigel says, much of the criticism of what we have had to say has been aimed at straw men - things we have not said.

As he also says, those who seek to make this a union bashing issue (as Giles seems wont to do, unfortunately) also miss the point, the TUC plays but a small part in this.

And those who seek to say it's a one trick pony are also wrong. Nigel says:

Given our work on tax avoidance and evasion at the TUC, I don’t think anyone would accuse us of going soft on tax dodging. Our work — and that of groups like Christian Aid and Tax Justice - has helped put this on the policy map.

Quite so.

I think Nigel correctly concludes, peeling off many layes of the oinion when doing so:

The RHT is therefore an indirect tax that firstly targets the institutions that did most to cause the crash and who have made super-profits, and secondly, is a progressive indirect tax that is hard to evade. It can make a significant, though only partial, contribution to finding the funds we need to avoid cuts, meet the Milennium Development Goals and tackle climate change.

That is how it should be judged, and while I have rarely been involved in a campaign where I didn’t squirm a little at some of the arguments of allies, that is what I happily endorse.

Giles has argued very well that now is not the time to make spending cuts as that will risk recovery, but I suspect that when it comes to dealing with the structural deficit — he is mainly a cutter, while we are mainly progressive taxers.

I have a strong suspiscion that is true.

And Nigel's words are wise.

Disclosure: I've known Nigel for many years. I have never knowingly met Giles Wilkes. I advise the TUC, including on financial transaction taxes.

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2 Responses

  1. Giles says:
    March 3 2010 at 2:00 pm

    Hey, Richard, don’t guess what I think: read what I said about spending cuts. I was the first to kick back in that one-sided debate

    http://www.centreforum.org/publications/a-balancing-act.html

    And before you say it, yes I know VAT is regressive, but this is largely because of the bottom decile, who can be targeted with compensation.

    my best wishes

  2. Richard Murphy says:
    March 3 2010 at 5:04 pm

    @Giles

    I’ve read much of it

    Not exactly very progressive is it?

    Increase VAT

    Cut top rate tax

    They aren’t winners on that score, are they?

    And assuming VAT can be increased benefits does assume take up is 100%. It never is

    I have sympathy on property taxes

    But most surprising is the absence of any comment at all on avoidance and tax havens and just one cursory mention of evasion and no real discussion of allowances

    That’s a profoundly superficial discussion of tax, if I might say so – and this is an issue on which I think I can claim some knowledge

    It’s not surprising Vince ran into problems using that as a basis last September

    Good job he reads more widely

    Sorry – this is not seeking an argument – I’m told by mutual acquaintances they think we’d get on – but whilst I note you’re not just a cutter, I also note you’re not into progressive tax either

    Which does rather leave Nigel’s comment unchallenged if I might say so

    Best

    Richard