I wrote a series of tweets last night on the break down of the old tax consensus that was the foundation of much of post war prosperity in the UK. I put them on the blog, here. It may be worth explaining why I wrote them. On Saturday night I began another of my not infrequent disagreements with Prof Judith Freedman at the Oxford Centre for Business Taxation. This was the exchange: The article Judith Freedman referred to is here. So why did I think it boringly predictable? The list is long.
You could start with the patronising tone: that's the Oxford Centre for Business Taxation all over. I have academics queuing up to tell me how offensive they find its tone to be. Civil society is treated, as in the article, as a bunch of simpletons to whom a few academic home truths need to be recounted.
Second, there's the fact that the argument is, after the patronisation, decontextualised. The possibility that a financial transactions tax (FTT) was proposed precisely because it may reduce the risk that is imposed on society by financial markets is ignored in the discussion. It is assumed that the only purpose of the tax is to raise revenue. This is a typical neoliberal perversion on taxation. It is assumed by neoliberals that whatever the market might want to do is right and therefore any use of tax to alter those outcomes is wrong. Here, the argument is made by simply ignoring the possibility it might exist.
Third, the fact that the incidence of the tax may well be on bankers and their bonuses is ignored; a disingenuous claim (admittedly stated with less stridence that usual) is made that unspecified final consumers may suffer is offered instead. This is not a technical argument. Technical arguments would consider possibilities and state them all: this is deliberate one-sided suggestion that the mainstream reader may suffer alone and is therefore mistaken in their simplistic belief in the tax which the assured technocrat author is telling them, in thinly veiled code, might hit their pension. Actually, I strongly believe the reverse is the truth. An FTT will hit the churning which currently denudes many pensions of any increase in value. The fact that this argument is not considered makes clear there is nothing technical about this article.
And then the straw man is offered. Although an FTT is not a tax on wealth as it is a tax on trading it is suggested that a wealth tax be introduced instead. But I know this is a straw man because in the Mirrlees review, an Oxford Centre for Business Taxation production by proxy, the following is said of wealth taxes:
Levying a tax on the stock of wealth is not appealing.
In substance that sentence is the entire consideration of the issue as far as consideration of wealth tax goes, and it's very clearly not technical; it's subjective opinion, even in the form of its drafting. From then on Mirrlees only considers taxes on wealth transfers, which are not the same thing. That's why I can say this is a straw man argument: the author must have known that if the idea was adopted by the charities and NGOs proposing the FTT it could also be dismissed on the same 'technical' basis used for the FTT.
So my argument is? It is simply that then neoliberal view: a deeply subjective view based on a view of the human being as a rational being in which markets always provide best solutions, not because they actually do, but because of the assumptions made by theoreticians that are intended to guarantee this outcome in their limited world view based solely on their belief in a mathematical reduction of human behaviour. There is nothing technical about this apart from the faux maths involved, it is a subjective choice that is offered and one that happens to neatly coincide with the neoliberal inclinations of the sponsors of such bodies as the Oxford Centre for Business Taxation, all of which are antithetical to the world view of the likes of Oxfam and the Robin Hood Tax campaign with its 'irrational' concern for redistribution of wealth, the externalities of markets and social justice, all of which are dismissed as irrelevant, or simply hysterical.
How do I know that? This was Judith Freedman's reaction to what I wrote:
Oh dear: poor little subjective me with my concerns for human well-being that are leaving me overwrought. She followed up with this:
Unless, of course, she really does not know where it comes from. But in that case she Oxford need to wonder why she has a chair.