It’s not just HMRC who make computer errors.
I got the following in an email form Easyjet at 2.20 this morning:
Dear RICHARD MURPHY
We are really sorry to inform you that we have been notified by the French Authorities that there will be Industrial Action in France by Air Traffic Control on Tuesday 7th September 2010, this means that your easyJet flight 3467 to CPH on 07/09/2010 has regrettably been cancelled.
We always aim to provide the best possible experience when flying with easyJet, however from time to time situations such as this arise which are out of our control.
Which is interesting, as the flight landed in Copenhagen, admittedly 2 hours late, at 11.45 last night — and I was on it.
The private sector is really not very good at these things.
And we imported their inefficiency into HMRC.
That’s when it all went wrong.
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The difference of course between HMRC and Easyjet is that no one forces you to use Easyjet and if you don’t like their service you can say “sod ’em”.
If you dont like easyJet, vote with your feet and stop using them. If we all do that they will be punished for their incompetence and go away.
Can you see where this analogue is heading?
It’s not quite the same really is it?
@SM
No – but the point is we dragged HMRC down to this level
That’s what annoys me
Of course it’s not the same
The public sector should be much better – and we need to pay for that
“The difference of course between HMRC and Easyjet is that no one forces you to use Easyjet and if you don’t like their service you can say “sod ‘em”.”
Exactly; HMRC collects tax, and pays some tax credits. These are not functions suitable for the free market, which is why HMRC does not have a competitor in the way Easyjet does. Unfortunately, the slavish adherence to the belief (to paraphrase Orwell) ‘private good, public bad’ of successive governments has meant that HMRC has been treated as though it is a private sector company making cars or widgets which can be made more ‘efficient’ by cutting the headcount and bringing in endless private sector ideas and reorganisations.
It’s not, it is a government department that deals with people, in all their variety; some trying to evade tax altogether, some trying to manipulate the law to avoid tax, some who are ignorant or confused about tax and need advice…….and so on. As Richard has endlessly pointed out, it needs to be properly resourced.
Other countries in the world have for more efficient public services while also having lower tax rates. What I fail to understand is why British should have to pay more for public services?
@JayPee
Evidence?
@JayPee
“Other countries in the world have for more efficient public services while also having lower tax rates.”
Go on then. Name them.
Guernsey for one. 🙂
@Greg
Let’s be serious shall we?
Apart from the apples and oranges issue Guernsey is very surely going bust
Richard – you are right that more of these assertions need evidence.
Here is the evidence that higher taxes do not deliver better public services. From the World Bank: “Across countries, higher taxes payable are not associated with better social outcomes, even allowing for country income levels. They do not increase government spending on
health and education, raise literacy or life expectancy or lower child mortality, nor are they associated with better infrastructure and other public services.”
Source: P13 of http://www.doingbusiness.org/documents/db_paying_taxes.pdf
I think at this point, the correct protocal is that I now ask you to submit your evidence. Why do you think higher taxes deliver better services, and how to you support that assertion with reference to an impartial piece of expert evidence?
@Gary
I offer as evidence the sheer outburst of anguish that will follow announcement of cuts
Universal anguish
Especially from the middle classes
@Richard Murphy
You’re not joking either – the cuts are already coming to my wife who works in Education.
But that’s not the same thing as the point you were raising which was that more funding delivers better services, and that cuts must equal less services. I offered evidence to the contrary. The burden of proof now rests with you…
@BenM
Australia.
@Gary
Respectfully, no it doesn’t
The WB is all over the place on this issue – as is the IMF and OECD
As is the whole history of political economics
If you seriously think
a) the use of my time is dictated by you
b) the world is changed by that one quote
think again
I guess that’s your opinion, but everything is pretty fine here at present! The introduction of a “Robin Hood Tax” would probably be very beneficial to local businsses and the CISX.
And we have better services and way of life than the UK, and we pay a lot less tax.
What you don’t mention, Gary, is that the authors of that World Bank study are making this argument in the context of DEVELOPING countries and their main argument is that it’s difficult for developing countries to collect tax revenue because businesses are good at avoiding or evading it. The study has nothing to do with whether there’s a link between the overall level of taxation in an economy and the quality of public services.
Furthermore, earlier in the report the authors do say that “tax collection has long been a despised activity. But taxes are essential. Without them there would be no money to build schools, hospitals, courts, roads, airports or other public infrastructure that helps businesses and
society to be more productive and better off.”
That’s precisely the argument Richard makes on this blog every day as far as I can see.
@Gary:
The quote doesn’t make the claim you suggest. The finding is that the headline rate of tax that companies face is not associated with improvements in outcomes, but that’s unsurprising. The data used, for poor countries only, reflects high headline rates in countries with very weak governance, which are high and under little pressure to change because they are never in fact charged. If you look at the graph next to where you took the quote from, you’ll see the authors demonstrate that actual tax received is inversely associated – in this particular sample – with the headline rate payable.
[That is not an argument in support of a Laffer curve – the relationship simply reflects that ‘fragile’ states have unloved tax systems, and of course is shown (in the same graph) to reverse for less poor countries.]
In addition, if you look at the source for the quote that you gave, you’ll see it does not relate to any published or publicly available analysis, but rather to something that the authors themselves seem to have done, possibly using data for one year only – “Based on analysis of Doing Business indicators with health, education and infrastructure indicators in the World Bank’s World Development Indicators (2005) and Global Competitiveness Report 2004—05 (WEF 2004). The results hold controlling for income per capita”.
The weight of academic literature strongly supports the finding that tax is associated with superior economic and political development – which is one reason why the UK is now funding a research centre into tax and development.
[And as an aside – after significant pressure from the UK, the World Bank is reassessing how it looks at tax in the Doing Business Indicators – this is because the evidence suggests that the tax variable is negatively rather than positively associated with economic development(!).]
We sincerely hope so!
@Howard
and
@Alex
Thanks guys
Much appreciated
And yes Alex – I think this last bit of info is fascinating!
@Alex
Alex, Richard,
The conclusion is drawn from “across countries” which THEY define as 175 countries, which is the first clue that we are not just looking at developing countries. Another clue is that the sample includes UK and Norway for example. The third clue is that the paragraph contain 2 points: Firstly *developing* countries fail to improve infrastructure, and secondly, *across* countries, higher taxes are not associated with better services.
Guys I’m enjoying the debate, but I am noticing that I am the only one offering any evidence here, and it is not a fair summary to say that I am trying to advocate NO taxes. What I am trying to do is de-link the pretty simplistic “money = services” equation.
You have again made some pretty powerful assertions without any evidence or sources at all, and its difficult to accept your arguement without them.
Yours in constructive debate,
Gary
@Richard Murphy
A stern rebute indeed Mr Murphy! I will indeed think again.
You had asked for evidence and I supplied some. In common debate, that does not mean the world has changed, but – pending your submission of competing evidence – it does mean that the *automatic* link between tax and services has been disproved.
Of course I have no hold of your time (I never said I did) and its your blog so you can do as you please, but in the absence of any evidence the matter is concluded in my favour.
And no – “The WB is all over the place on this issue – as is the IMF and OECD. As is the whole history of political economics” – doesn’t count as evidence.
You remain under no obligation to provide evidence of course, but in the absence of any, the only evidence on the table says you are wrong.
The question then becomes – how can the left get past ‘tax and spend’ and design a coherent set of activities that 1) only the state can do, and 2) that they state can do better (while carefully delineating between funding and delivery). Then we can calculate the correct level of tax, and in turn the most efficient collection mechanism.
@Gary
With respect Alex (a world authority on these issues) and Howard have rebutted your “evidence” and Alex has suggested that there is an enormous body of literature suggesting you’re wrong
massed electorates from around the OECD also suggest you’re wrong
As does the obvious disparity between well being in low spending sates (let’s call them broadly developing countries) and high spending states (let’s call them broadly developed countries.
For you to claim ‘victory’ because you can neither be bothered to read or research for yourself is not to your credit, or to the credit of your argument
In fact, it’s somewhat worse than that
Lovely comment! That sort of attitude really endears your plight to others.
@Gary:
I’m glad that you want to engage seriously in this discussion; but having said that, I’m afraid to say that your evidence doesn’t support you. As I’ve pointed out, the section you refer to deals with tax rates, rather than revenues, so has nothing to say on the “money=services” point you raise.
In addition, you suggest that I’ve misunderstood the basis of the claim that you refer to. It’s true that the Doing Business Indicators survey in which you found the claim contains data on 175 countries, rich and poor, but as I posted above, the source for that particular claim is an unpublished piece of analysis carried out on a different basis.
This does suggest that the onus is still on you to provide some evidence.
@Alex
OK – so we have now established that the WB/PWC report DOES include developed countries as well. You are concerned about tax rates, but it refers to “taxes payable”, not tax rates, so it is about revenue and it is therefore appropriate for the “money=services” point. So that’s OK too. Source data is public:
1) http://data.worldbank.org/data-catalog/world-development-indicators/wdi-2005
2) http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm
Also, while googling, I did also find this from the King’s Fund on the relationship between NHS funding and performance:
http://www.kingsfund.org.uk/publications/kings_fund_publications/our_future.html
I need to be honest and say that I am hearing very loud shouting from 2 or 3 people telling me I am lazy and ridiculous, and that you are the experts, but I’ve still got nothing from you all that actually counts as a source. This thread keeps alluding to/suggesting all this other evidence, and I am googling as we speak, but competing evidence isn’t as easy to find as I hoped. You wouldnt throw the dog a bone by giving me a URL or even a search term to use in google?
Facts are our friends. Lets share them.
Switzerland
Canada
Australia
Norway
Israel
shall we continue?
@Ted G.
Proof?
@Richard Murphy
1) http://data.worldbank.org/data-catalog/world-development-indicators/wdi-2005
2) http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm
3) http://www.kingsfund.org.uk/publications/kings_fund_publications/our_future.html
4) http://www.doingbusiness.org/documents/db_paying_taxes.pdf
I’m trying to entice you to offer something of this much vaunted ‘mountain of evidence’…
The only outburst of anguish I have noticed is DEMANDING cuts.
It is called the Tea Party.
@Gary
If you go back and read the World Bank ‘Doing Business’ report you’ll find that it says (page 02) “the conclusions are based on the findings of a survey on paying taxes which looked at the position of a standard modest-sized company in each of 175 countries.”
The study looks at the tax burden on business – not overall tax as a share of GDP. Also the authors assumed all taxes where the formal incidence was on business (e.g. employer NICs in the UK) were actually paid by the business as lower profits (and not, e.g. by workers in the form of lower wages) – which is extremely questionable.
The main result the authors emphasise is from Figure 2.2 on page 14 of the report and shows a negative association between “ease of paying taxes” and infrastructure quality and between ease of paying taxes and educational system. But there are several problems with interpreting that result as meaning that higher taxes do not improve infrastructure. For one, “ease of paying taxes” is a composite measure. It seems to include both the overall measure of tax burden on business, the number of taxes on business and the amount of time it takes for businesses to do their tax returns. (see Appendix 2 of the report for full details). So only a third of the measure relates to the LEVEL of taxation – and then, only on business – and THEN, measured in a suspect way, as I’ve claimed above.
Furthermore this is a two-way correlation rather than a multiple regression model and is therefore of very little value as an explanatory device. It doesn’t control for any of the other factors that affect the measure of “ease of paying taxes” or the infrastructure of a country. Developing countries have lower levels of infrastructure than developed countries in general anyway (because they have lower income per head). They also most likely have more problems collecting tax than developed countries (partly itself a consequence of infrastructure). So the result is most likely entirely spurious.
The authors say they have done an analysis of the relationship between tax rates and infrastructure controlling for income per head (footnote 9) but it looks to me like they’ve actually used their composite measure of “ease of paying taxes” rather than any measure of overall tax burden (so their write-up is misleading). Also it sounds like their analysis doesn’t control for any other factors. For example, the level of *private* spending on health and education and the general health of the population. For example studies of this kind using African data would need to take HIV/AIDS into account.
Because the authors give no details of the analysis in footnote 9 it’s impossible to give more detailed criticisms. But certainly this isn’t analysis of the quality you’d find in an academic journal (for example). For one thing, academic journals would give full details of the regression model used and the results thereof.
Let me finally note that the analysis is produced in conjunction with PriceWaterhouseCoopers, an accountancy firm, rather than (for example) academic researchers. For me, that makes the research conclusions a lot flimsier than if reputable academics had been brought on board. The lack of serious econometrics in the report (for example) is testament to its sloppiness.
I would be happy to provide some additional academic references on this subject for you to go and look up but will have to do this sometime next week as too busy at the moment. In the meantime can I suggest you read a book called “Globalisation and its Discontents” by Joseph Stiglitz. It’s a brilliant expose of what the World Bank’s role is in spreading the neoliberal agenda in developing countries. Once you’ve read that you certainly won’t assume that the World Bank are “impartial”.
Sorry for the length of this post but it seemed to me that you were drawing entirely the wrong conclusions from this report – but also, that unlike a lot of the right-wing posters on here, you were open to debate and other perspectives. So I thought it was worth spending some time explaining why the World Bank analysis isn’t much use.
@Gary
I note what you’re trying to do and I note that Howard and Alex have ably demonstrated why you’re failing to do so
This is a relevant debate
And one I’ll engage in – when I choose to do so
In the meantime – might I suggest superficial quoting is not evidence?
@Richard Murphy
If quoting third party research from WB, PwC and Kings Fund, complete with links to the underlying data doesn’t count as evidence, then I await with eager anticipation the sheer volume of evidence that should be forthcoming.
‘Cos in my day job, I am regularly called by HMRC as an expert witness in my chosen field, and in the Tribunals and Hearings I attend, what I have provided certainly does count as evidence. And I have a high court ruling to prove it.
@Gary
Full CV please, on public record
And the High Court ruling that says misreading of documents counts as evidence?
@Howard
Howard I think I’m picking up two points
1) The WB/PwC report is flimsy
2) IT addresses a different point
1) I am familiar with PwC. I am a Director of that firm and I am VERY proud of the firm’s integrity. I have personally been in some tight spots where we have told clients to piss off if we didn’t think it was the right thing. We are just gonna have to disagree on this one.
I’m not familiar with WB, and you are right that this is not a per-reviewed academic level of research, but my own experience is that academics come with their own Bayesian priors.
Where I have a little sympathy is that the central point of the WB report is different to the one we are discussing here although the sub conclusion I quoted is directly relevant.
The real (and only) flaw with WB is that it is BUSINESS tax, not total tax. Fair cop. But I am still left with the King’s Fund that tells me that the MASSIVE increase in NHS funding and very modest increases in output, and indeed productivity fell (and in fact where most of the improvements did happen, they were as a result of better drugs and equipment supplied by the private sector).
My own personal hypothesis is actually that a well governed state can provide excellence at the lower levels of service, but is quickly subject to diminishing returns. That would explain why the “money=services” relationship can hold in developing countries that are well governed (consistent with WB), but why the King’s Fund is also right (because we are at/close to diminishing returns). With our basic needs met, you and I will likely diverge wildly in how we want the 101st billion pound spend on health – I think CBT matters a lot, you might say facial disfigurement. With that fragmentation, the incremental effectivness of the state diminishes rapidly.
PS: I’m not far right. I’m actually Orange Book(ish). That sure ain’t that far right of the average voter, although it may or may not be far right of where you are standing.
@Gary
@Richard Murphy
I have a Tribunal Hearing here on my hard drive, and HMRC are looking out the High Court one now, but I don’t see how I attach documents to these comments.
I’ll happily email them to you if you trust me with your address, but here’s the thing – so far I have made ALL the running in this debate, provided ALL the evidence and defended the challenges. You, Alex the World Authority and Howard have collectively contributed NOTHING but assertions, suggestions and allegations (“your’re lazy”).
So a direct question – after submitting multiple sources, identifying myself as an HMRC expert witness credentialising myself via the UK courts to you, would you actually consider changing your mind?
@Richard Murphy
Apologies richard, but it the credentials thing going through? I think I submitting something twice.
@Gary:
A little more tersely:
i. Again, the section you cite as evidence relates to taxes payable, not revenues. The authors use tax payable to mean the rate, not the revenue: this is how they are able to graph tax payable against tax revenue, as you’ll see next to that section in your source, in figure 2.1. (That’s the one headed “Taxes and revenue — unrelated in poor countries”! In fact, the claimed result is not really serious; but the point for you to understand is that the authors are talking about tax rates, not revenues, in the section you quote.)
ii. Again, if you read the whole paragraph from which you quote, you’ll see that the evidence for that particular statement (as opposed to the DBI in entirety) relates to developing countries, specifically. I’ll agree it’s a little carelessly written, but I think it’s clear enough.
iii. On the other links you provide as ‘evidence’: First, I would say that linking to the data sources which the authors say they used in their unpublished and unavailable analysis does not count as evidence. Do you disagree? In addition, you link to a King’s Fund study. As you don’t indicate, I’m not quite sure what point you think it contains. I’ll quote what I take to be the relevant section of the summary in full – I can’t see any way in which this supports you:
“OUTPUTS: AN OVERALL ASSESSMENT
With increased resources, the NHS has been able to do more work in most areas. Elective admissions increased by 7 per cent between 2002/3 and 2005/6 and outpatient attendances by 3 per cent. There have also been very large increases in emergency care (+21 per cent) and accident and emergency attendances (+33 per cent). Three-quarters of the 20 per cent increase in prescription items dispensed between 2002/3 and 2006/7 is due to just 10 drugs. Lipid-regulating drugs (statins) account for nearly a fifth of the total increase and are on target for achieving the 2002 review’s recommendations at a lower than-expected cost.
Overall, in terms of outputs, this places the NHS between slow uptake and solid progress.”
The report does not emphatically say that productivity has increased with higher spending, but then you wouldn’t expect that in the private sector either; on the question of whether money translates into more services, the report is absolutely unequivocal.
iv. Finally, I couldn’t help but use the WDI data that you suggest to look at the apparent relationship between tax revenues and services. I suggest you try this yourself, if you’re interested. A couple of simple ones: download WDI data for all countries (or all developing countries, if you prefer), for series including tax/GDP, nurses per 1,000 people, physicians per 1,000 people and infant mortality, for — say — the period 2000-2009. What you’ll find if you do simple two-way plots and fit trendlines which are just linear regressions, is that the links are there as one would expect. Take the last link: even on a simple linear regression, allowing no time lags or other contextual explanations (e.g. around disease prevalence, conflict, nutrition etc), the number of physicians per 1,000 people ‘explains’ almost half of the variation in infant mortality. Tax/GDP similarly ‘explains’ about a fifth of the variation in nurse numbers, and so on.
Clearly this is not the most rigorous analysis (probably a little more so than in the DBI report, but I don’t think that’s a good benchmark); my point is that even a simple use of the sources you’ve suggested seems to point in one direction only. If you’d like some heavy-duty analysis of these links, then I’d be happy to manage a consultant for you; for free, this is all you’re getting!
Money very definitely gives rise to outcomes; or, more specifically, a lack of resources in developing countries gives rise to some awful shortfalls in basic human experience. This is so widely recognised I’m surprised you’d query it; but a basic piece of analysis would be this World Bank calculation on the costs of achieving the Millennium Development Goals:
http://www.worldbank.org/html/extdr/mdgassessment.pdf
I’d query their approach, but not on the issue of whether money buys services that people need. Would you – seriously?
OK let’s try this another way. I see this is not the right forum for a quantitative approach. Let’s say that more taxes deliver better services. Is there a limit to that strategy/policy? is there any point at which that statement would stop being true? If tax take was 95% of GDP, would 96% be better? An extreme example I know, but its just an illustration.
Don’t bother with data. This is your blog and you can say what you like. I’m simply trying to understand where you think the limits of this idea might be? What tax/GDP ratio are we shooting for here?
@Alex
A great reply Alex – I obviously need to look into this, but first I quickly wanted to say that I have another post immediately below yours which talks about a lack of data. It looks like we were writing at the same time, and it is definately NOT my reply to your thoughtful post. It was actually directed more at Richard.
That said, the question it poses could apply equally well to you: Let’s say that more taxes deliver better services. Is there a limit to that strategy/policy? is there any point at which that statement would stop being true? If tax take was 95% of GDP, would 96% be better? An extreme example I know (‘cos I dont want to put a number in your mouth so to speak), but its just an illustration. What tax/GDP ratio are we shooting for here?
@Gary
I think I’m beginning to be able to translate from Garyspeak into English now.
When you say “I see this is not the right forum for a quantitative approach”, what you really mean is “Alex has rumbled me by actually being able to analyse the data properly.”
On the “right” ratio of tax/GDP – 95% seems ludicrous. I’d be very happy with 45-50%. I think that 35% or less, which it seems to me is the long-run ratio that the Con-Dems are aiming for, will bring about the total collapse of many of our public services.
The Orange Bookers, for me, are not that far from the Tea Party in terms of being libertarian extremists. Of course you will probably see me as an extremist. It’s all relative.
@Howard
I have already replied to Alex explaining that that post was NOT a reply to him, but my posts are taking several hours to pass through moderation. I notice your posts seem to take minutes to pass through. I have also posted a public record CV as requested(twice) this morning, but that doesn’t seem to have made it either. no complaints, just observations that might explain the gaps and overlaps in the replies.
Dismissing my 95% number was SO predictable I already that I prempted that by telling you it was an extreme illustration, so I’m not sure you are adding much by pointing out to me what I pointed out to you first.
I am going out now and I promised Alex a more thoughful reply, but I’ll tell you my real learning so far: if a member of the LibDems is not far from “extremist”, then I have strayed too far from the mainstream by engaging with this site.
@Howard
hmm…but given that Tax/GDP was 36% under Labour, aiming for 35% or less doesn’t strike me as extreme. Maybe you’re thinking of public spending/GDP (which from memory is c.42%)?
http://www.oecd.org/document/4/0,3343,en_2649_34533_41407428_1_1_1_1,00.html
@Gary Taylor
Do I hint a little paranoia?
You get the same treatment as anyone else – but it so happens that I run this blog between and around work
And today the pressure of work was pretty flipping high
So I’m very sorry I wasn’t here to service your every need – but sometimes the needs of PWC partners don’t come first
Maybe it’s a lesson you might need to learn
And you might also need to note that being an Orange booker is in the eyes of a great many politically moderate people occupying he centre ground of British politics very extreme indeed – and wholly destructive of the LibDem party. They’re right to think so. Howard’s right to think so. I share the opinion.
What you clearly don’t understand is how unacceptable the neoliberal prescription is to the ordinary person in this country
But in time I guess you will
@Alex
Alex
Many thanks
I’m sorry you (and Howard) are having to suffer some abuse in return and that due to work pressure I’ve really not engaged
I will – but in my own due time
Best
Richard
@Alex
Howard I promised you are more considered reply.
i) The WB/PwC report refers to “taxes payable”. You have a different reading, but to my eye, a taxpayer can only pay money (i.e. costs to taxpayer and revenue to state). It not at all obvious to me that a taxpayer can pay a *rate* to the state. I can only pay money, and that seems obvious to me, but I accept in good faith that we have different readings.
ii) I addressed this point already in comment #22 (“the paragraph contain 2 points: Firstly *developing* countries fail to improve infrastructure, and secondly, *across* countries, higher taxes are not associated with better services.”), and the paragraph clearly sources the DBI data in the footnote which in turn draws on all 175 countries. It is of course possible that the author is wrong or lying, but they do not suggest they edited the data, so the more likely explanation is that they said it was across countries and they used the data they quoted, which covers 175 countries.
iii) You don’t think they count as evidence, but Alex at comment #26 suggested that my argument was invalid without full disclosure of the underlying data, which he said was unpublished. He was wrong about that so I provided him with the URL link. I reckon you and Alex need to agree between yourselves whether citing it is a good idea or not. Personally I think it is helpful to cite it based on my own experience of giving evidence, but my public record CV has not passed moderation so you’ll have to take my word for it.
King’s Fund
I’m not sure the “money=services link is unequivical” in the NHS is as obvious as you suggest. To wit:
“What has happened to [NHS] productivity?
Independent estimates suggest that productivity (the ratio of outputs to inputs, adjusted for quality) has been broadly static or slightly negative over the last decade, with reductions in the years of most rapid input growth.”
http://www.kingsfund.org.uk/publications/improving_nhs.html
“Given that whereas private sector productivity in the services sector went up by 20% over the period from 1997 – 2007, public sector productivity in fact fell by over 3.4%. If the public sector had matched private sector productivity over that period, then it would be nearly a quarter more productive. This is equivalent to now spending £60bn more than we need to every year. This sum is of the same magnitude as the underlying structural deficit in Government’s finances.”
http://rd.kpmg.co.uk/mediareleases/21654.htm
I’m not at all sure I’m getting more services for more money.
iv) I conceed all points about the developing world entirely. Partly becuase I didn’t try to make any. Richard asserted (i.e. unsupported) that, in the context of HMRC (i.e. UK) that we need to pay for our services, and that costs, and that more taxed deliver better services. I take that to mean this is about the HMRC, UK taxes and UK services. I am not challenging the very different situation in developing countries and I don’t think that is within the remit of the point Richard was raising.
Where I think we may well have common ground is your excellent re-formulation “a lack of resources in developing countries gives rise to some awful shortfalls in basic human experience”. Referring you to point iv, I do not challenge that. As I say though, Richard raised this topic as the impact of Tax revenue in the UK.
And so back to where we started. Richard has pronounced that more revenues will deliver better services (in the UK) and vice versa. I wonder what the causal relationship is? If we raised Tax/GDP from c.36% now to Italy’s c.44% would we get Italy’s level of public services? (hardy bloody har!).
More money delivers better services (in the UK). How do you know?
@Richard Murphy
I apologise profusely and unreservedly for all abuse to you, Alex, Howard or anyone else. I also challenge you to point it out. I realised you had a position regarding the far right, but I thought (wrong it seems) that a lib dem position was in the bounds of mainstream debate and would not constitute abuse. 23% of the vote certainly seems mainstream to me. You might not agree with it, and that’s fine, but it IS mainstream, and it is not abuse.
There have been personal insults in this thread, but not by me.
@Howard
You know the more you encourage me to research this, the more the evidence is piling up in one direction.
Say we WERE to increase Tax/GDP from 36% to 45%. We might get lucky and end up with a Denmark/Sweden scenario. Terriffic. Or we might end up with a Spain/Portugal/Czech/Italy. Not so good. It is clear then that more money will not necessarily deliver better services.
Put it the other way around. Say we cut from 36% to “35% or lower”. We might end up with a Greece/Poland secenario (boo!), but maybe we get Canada/New Zealand (yeah!).
So we have countries spending more than us but getting more, we have countries spending more than us but getting less, we have countries spending less than us but getting less and we we have countries spending less than us but getting about the same.
How do we know that more tax will deliver better services (in the UK from where we are today)?
@Gary Taylor
Apologies – I did indeed misread that you were talking about spending/GDP. But one of the reasons a structural deficit opened up before 2007 was that Labour didn’t raise tax enough to pay for a 42% level of spending. So If you had spending at (say) 45% of GDP then tax would probably have to be only a few points below (the gap consisting of investment spending – as per the much-maligned (but correct) “golden rule”.
I’m sorry you thought my 95% reply was flippant – I was just trying to make clear that I don’t think spending should be as high as that.
On the Orange Book liberals – let me ask you a question for a change. If you had to outline the most important differences between the Orange Bookers and the US Tea Party movement, what would they be?
best
Howard