More wonders from Durkin.
The amount of benefit paid in the UK must be cut massively.
Then:
Low taxes in Hong Kong did for them what they did for the UK in the 18th and 19th century.
So now we know the model. It’s low tax. But no benefits. No minimum wage, no doubt. No health care (he says we should not have an NHS for the poor — they must have compulsory insurance instead — which of course they won;t be able to afford, as in the USA). And no social housing. And no doubt the end of statutory holidays. And no provision in the case of sickness. And no doubt no right of access to education.
Sheer madness.
And now he’s onto Laffer. No evidence given (because there is none — none at all — remember Hong Kong’s a tax haven that imports its profits — it does not generate them).
The absurdity of this is madness.
I sincerely hope C4 is going to offer a bunch of those who know better a right of reply.
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I have rightwing friend crowing about it on FaceBook. I’ve sent him your 2 blogs. Hope more to come tomorrow. How on earth was this allowed!
When Durkin talks of low taxes in Hong Kong he misses the point in any case. The Hong Kong government was financed by leasing land. Hong Kong diverted what otherwise would have been private land rental income into government coffers and from there back into public spending. So it had no need to levy high taxes. It was possible to fund the HK government without low public spending commitments because it, in effect, levied a high Land Value Tax upon those who wished to use its territory. If Hong Kong had merely reduced taxes without taking this action, it would have ended up in the same impoverished state as the other low tax/low spending/low GDP ex-colonies which you listed in your recent excellent graph showing the relationship between GDP and tax.
Similarly in Britain it would be quite possible to go to a high benefit/low tax situation if the UK government used a similar model and introduced a substantial Land Value Tax while cutting other taxes as Andy Burnham recently suggested.
I watched it, I was gobsmacked, 10 out of 10 for sheer audacity, I didn’t know it was possible to paper over cracks that large. Despite the unanswered questions, the ignored data and the dodgy editing I still found the most unpleasant aspect to be Mark Littlewood.
I expect to see it spouted all over the place for a while though. It’s like the climate change deniers of the financial world, it’ll bolster some very narrow minds.
Absolutely. Generalising from Hong Kong to argue that if every country had low taxes, we’d all have high growth is like generalising from the example of the Great Train Robbery to argue that if everyone went out and robbed a bank, we’d all be millionaires.
Although in fact of course it’s the bankers who are now the robbers rather than the bank robbers. Fred the Shred Goodwin is the new Ronnie Biggs – except he’s not on the run, because we let him get away with it.
HK is by no means perfect, and what works in HK may not work in the UK, but to correct a few points:
“But no benefits”
A basic safety net is available, along with a government run voluntary fund (HK$10bn), public housing, generous tax allowances and no sales tax/VAT or tax on income from investments (including bank interest, pensions, shares) for individuals.
“No minimum wage”
Foreign domestic helpers have had a minimum wage for some time. For local workers, one is about to be introduced. With a tax free allowance of HK$100K, those on it won’t be taxed. (Tax free allowances increase for couples, those with dependant children, adults and parents).
“No health care”
17% of government spending is on public healthcare.
“no right of access to education”
12 years free and compulsory education.
“Hong Kong’s a tax haven that imports its profits — it does not generate them”
http://www.ird.gov.hk/dar/2008-09/table/eng/ch2.pdf
@Adam Smith Fan
People keep saying HK has land value taxation. The government certainly does own the land and leases, and keeps prices high by restricting supply, but to say most (or even significant) income for the government comes from this is wrong (HK$833m from a total government revenue of HK$273b in 2009). They are actually property taxes that get declared as part of income (distinct from “salary”).
I know what my landlord pays to the government from my rent as tax and it’s about the same as UK council tax for a similar rent in the UK. If you live in the property you own the taxes are lower. The land value tax level certainly does not stop property price bubbles in HK.
[…] appalling documentary on Channel 4 last night, but one, perhaps last, issue has come up. As a commentator has noted on this site: When Durkin talks of low taxes in Hong Kong he misses the point in any case. […]
I watched the first 3 minutes and then turned the TV off to do something more productive and interesting. A parade of cheap cliches, such as a tall bowler hatted man standing next to a very short man to represent the bloated public sector compared to the poor downtrodden private sector – laughable.
The claim that the public sector is now larger than the private sector in Britain; 6 million public sector workers out of a total workforce of 27-30 million – eh?
A national debt of £4.8 trillion – as of September 2010, UK public sector net debt was £952.8 billion, so he’s exaggerated it by a factor of five.
As was proved by Durkin’s previous C4 “documentary” about global warming, Durkin is basically a propagandist for the raving right. Increasingly, the loony right in the US and UK follow the Joseph Goebbels propoganda model. Tell big lies, and keep telling them, at maximum volume.
I managed to sit through most of this program somewhat incredulous for the most part.
I think it is imperative C4 lets a right of reply program of equal length be aired.
I actually burst out laughing when Durkin was in Newcastle and they were talking about the UK “Tiger” economy of around 1900. Workers then were better clothed than the aristocrats of 200 years was one quote from this sidekick. Completely oblivious of course to the fact we had appalling working conditions in mines, mills and other factories and a sweat shop economy.
The trouble is we seem afflicted in the UK at the moment whereby people accept simpleton economics like his and challenge nothing. A right of reply is essential.
@Dave
Come off it. There was a left-wing programme on C4 on tax avoidance a few weeks back which contained a lot of misinformation (not least omission of the fact that Hammond is required to dispose of his shares when he joins the Cabinet, so any tax advantage gained by the shares being held by his wife is unavoidable); there was a right-wing programme on C4 last night.
Every side gets a chance to be heard, so stop the guff about right of reply.
@Tony Cole
Oh come on – that’s mad – as mad as Durkin
The Dispatches you refer to asked people to comply with the spirit of the law and pay their taxes
Left wing?
Please pull the other one
All it did was say people should not abuse the law
That’s upholding society as we know it
That’s mainstream politics
Durkin is trying to tear down democracy
[…] appalling documentary on Channel 4 last night, but one, perhaps last, issue has come up. As a commentator has noted on this site: When Durkin talks of low taxes in Hong Kong he misses the point in any case. […]
@Tony Cole
If you are referring to the Dispatches program I don’t see how that was left wing as such. Ponting out Osborne would not pay any inheritance tax on a £4m trust fund is factually correct is it not?
Now you can argue that is OK if you like and you can class those who say it is not as left-wing but you can’t say it is factually incorrect.
The Durkin program on the other hand was breathtaking at times in its selective views and misleading interpretations.
I will give you an example. He dismissed the service sector as a contributor to the economy because hairdressing doesn’t travel. Well I work in the service sector in IT and we export our software all over the world. Not a mention of such industries.
And as I mentioned previously the way Durkin and his side kick waxed lyrical about the 1900’s economy as if it resulted in some sort of utopian society was a complete joke. He’s obviously never read the Road to Wigan Peer.
I actually agree with one thing he said right at the beginning of his program which was basically we don’t manufacture and produce enough any more. The trouble is his solution would never work. We could have the same 0% / 20% tax regime he proposed but unless we want to pay our workers low wages and return to sweat shop working practices we still won’t be able to complete with economies that do this.
His program was libertarianism in the extreme presented as fact with any inconveniences ignored.
Did it highlight any of the Labour MP’s who have questionable tax affairs?
@Greg
You may not have noticed this, but Labour is in opposition, and of remarkably little interest to filmmakers when there is a new government made up of largely unknown people to consider
That is much more likely explanation for the choice