I am aware that some, including national newspapers, are getting very exercised by the fact that I suggest that when the government spends it is not doing so using what is often referred to as 'taxpayer's money'.
It would seem that someone is spending some time reading my past blogs, writing, lectures and tweets, In doing so they came across the following piece from the Salter Lecture I gave at the Quakers' Yearly Meeting in Bath in 2014. I confirm I reiterate the view in the forthcoming 'Joy of Tax':
At its core tax justice demands that each person pay the right amount of tax at the right time, in the right place and at the right rate.
Right has a special meaning here. It means that not only do you comply with the law. Tax avoiders can claim they do that. It does not even mean that you comply with the spirit of the law — which is what HM Revenue & Customs expect. It is about putting this desire to do the right thing into action, so that what is declared for tax purposes reflects the economic reality of what the taxpayer has actually done.
That, at least, has been our usual explanation of the term ‘right' but the reality is that it reflects something broader than that. It is our belief that we are people who live in community. But that community is not made up of those immediately known to us, as neoliberalism might, at best, suppose. We think that community between people known and unknown is something that is a pre-requisite for a life well lived.
Without that community there would be a continual struggle to preserve ownership of property, to secure the means for survival, and to maintain the boundaries around communities that are necessary if it is to invest in its own identity, traditions and future, as all do, for a community does reflect a culture, even if it is one that should develop and evolve over time.
Tax provides the mechanism to achieve these aims in a non-violent way. It's not just that it pays for the process of government that defines in turn the extent of the community, the way it identifies and transfers property rights, and which protects its more vulnerable members: tax does this in a democracy with the willing consent of the members of that society. That combination of consent and tax takes away as a consequence the cause for much dispute. As a result, tax is one of the foundations of peace.
We pay a price for this: indeed American Judge Oliver Wendell Holmes, Jr. said in a speech in 1904 that ‘Taxes are the price we pay for a civilized society'. I would agree. But I would go further than that. I would suggest that we don't as such pay taxes. The funds that they represent are, I suggest, in fact the property of the state. After all, if we give the state the power to define what we can own, how we can own it and what we can do with it — and we do — then I would argue that we also give the state the right to say that some part of what we earn or own is actually its rightful property and that we have no choice but pay that tax owed as the quid pro quo of the benefit we enjoy from living in community.
This philosophy is, of course just about the polar opposite of that of the neoliberal who thinks that all taxation is, in effect, theft of the private property of the individual that the state must, by coercion and threats wrest from their possession. That notion of tax as theft is, by the way, commonplace in neoliberal thinking. Its expression in milder form gives rise to the term used by politicians of all parties in recent years when they talk about spending ‘taxpayers' money', with the clear implication that the government really does not own the funds in its possession. Well let me inform you that there is no such thing as ‘taxpayers' money': it is the government's money to do what it will with in accordance with the mandate it has been given and for which it will have to account. It is the government's money precisely because we owe it to them in accordance with the laws that we, by consent, have agreed to comply with and which underpins the society of which we are a part and in which we wish to live in reasonably peaceful harmony.
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In so saying, of course, let me make clear that there is taxpayer's money: it is the money they have the absolute right to enjoy after they have paid their tax.
It seems some don't get such things. Public discourse and understanding is all the poorer for it.
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MMTers would perhaps put the argument slightly different. They would say that a Sovereign Government can neither have, nor not have, any money in the way we understand it. That view seems a little odd at first but follows quite logically from an understanding of money as an IOU of the issuer. So, just as a person can possess IOUs issued by someone else that person can’t possess IOUs, or not possess, issued by themselves.
It then follows logically that Governments don’t need Taxpayers’ money (why would they need their own IOUs?) and that the purpose of taxation is primarily to prevent inflation and maintain the currency’s value. In this sense we can envisage the govt putting our hard earned tax money into the shredder!
So, does this argument negate the sentiments expressed in the article? Not at all. If we think in resource terms, taxpayers (by freeing up their spending space to government) are providing the resources the government needs to successfully run a modern economy.
However those resources could represent anything between about 25% and 50% of total GDP. We’ll never all agree on exact ideal percentage.
You know I broadly agree with that
I was addressing the issue in a different way for the audience I was talking to when making that lecture
“the purpose of taxation is primarily to prevent inflation and maintain the currency’s value.
Yes- but isn’t also (and equally importantly) a behavioural control on things we consider socially and environmentally bad-except this is rarely put to the populace-as Randall Wray puts it: ‘tax bads not goods’-it’s up t us to democratically decide what bads are and with politicians reneging on their function to educate and guide (whilst dancing to the perceived vox populi tune) we don’t really do this.
All to be addressed in The Joy of Tax
Yes, I tend to categorise these as secondary but they are still important. So I broadly agree with your point.
People generally use the term “taxpayers money” to express waste. To frame it in your language it’s when Goverment money is not used wisely. The government has a mandate to spend money wisely on infrastructure and services. When funds are wasted whether by incompetence or corruption the electorate are right to be critical. The language used isn’t really relevant in my opinion.
The point would be easier made by insisting people who use the term ‘taxpayers’ money’ refer to their own money as their employer’s, to remind them that their employers have an expectation that they spend it only on what sustains their work performance. Therefore scented candles would be fine but baby clothes would be wasteful.
As someone who spent most of their working life in the murky world of advertising, I recognise the phrase ‘tax payers money’ as something cooked up in an agency somewhere.
Politics and economics have been reduced to this level for many years.
During the past week it’s been interesting to watch the media’s confusion. They are trying to cope with a new reality, with real people,and real information.
I’m finding it difficult too, because I’m so used to disagreeing with everything!
Thank you, I will be following you with great interest.
You are right: this is PR speak
Well-put the media is sweating at present because the cannot cope with the fact they are discovering their own dumbed-downess and irrelevance- it think the BBC’s Norman Smith commented that it was strange to them that Corbyn does not demand the questions in advance and get researchers to cough up the memes and soundbites and does not carefully choose the setting and backdrop in advance as well as the smart suits and ‘ronsealed’ facial appearance.
You suspect that “someone is spending some time reading my past blogs, writing, lectures and tweets”. I’m sure you are right. They are not looking for wisdom, they are hoping to trip you up, and by association to get at Jeremy Corbyn.
One of the enormous benefits of Corbyn’s election, is that ideas, and voices, that have been suppressed for decades will now get an airing in the public forum. If that is the only thing that results from the current situation on in the Labour Party, it will be a huge plus.
In a thread yesterday, Richard, you said that a sovereign nation’s government that is a member of the EU cannot, under existing EU laws, issue and control its own debt-free money through its treasury. I did my research last night but I couldn’t find anything relating to this. Could you please point me in the right direction so that I can confirm what you say. If what you say is correct then this, I agree, would be a problem for the Bradbury. Many thanks, Justin
Art 123
I would argue that all money is debt based. Even the Bradbury Pound. It’s essentially a tax voucher. Any issuer of a voucher is creating a liability for themselves. They have to honour that voucher. Could they get around EU interference by calling it that? I don’t know!
Neither do I know what Richard means by Art 123 but, in any case, now that the BoE is nationalised and to all intents and purposes part of Govt, we can consider all pounds to be “Bradbury Pounds”. So I can’t see any real problem.
I only wish Peter that the BoE was nationalised in the true sense of the word, but I’m afraid it isn’t and it’s certainly not under the control of Osborne and HM Treasury but it IS under the ultimate control of the Bank for International Settlements (BIS) and the banking dynasties who devised, over the centuries, the debt-creating and fraudulent central banking system that we have today. This is what Professor Carroll Quigley (President Bill Clinton’s mentor and global elite ‘insider’) said about the BIS:
“The powers of financial capitalism had
another far reaching aim, nothing less than
to create a world system of financial control
in private hands able to dominate the
political system of each country and the
economy of the world as a whole. This
system was to be controlled in a feudalist
fashion by the central banks of the world
acting in concert, by secret agreements,
arrived at in frequent private meetings and
conferences. The apex of the system was
the Bank for International Settlements in
Basle, Switzerland; a private bank owned
and controlled by the world’s central banks
which were themselves private
corporations. The growth of financial
capitalism made possible a centralization of
world economic control and use of this
power for the direct benefit of financiers and
the indirect injury of all other economic
groups.”
BTW, the Bank for International Settlements controls sixty central banks and oversees 95% of the world’s money supply! And hardly one per cent of people, including many of our politicians, have ever heard of it.
Unfortunately, Richard, Positive Money and the New Economics Foundation will not look at this Big Picture which is very sad. My latest e-book will help explain more about what is REALLY going on http://www.thebcgroup.co.uk/austerity.pdf.
BTW, I’m only acting as a conduit for highly placed insiders who want to see the central banking system completely exposed and collapsed so that humanity can take back the lawful control it should have of all money creation and money supply in order to provide the debt-free liquidity needed to end ALL poverty and to create a truly prosperous and human-scale global economy. Such liquidity would be based on sovereign debt-free money issued and controlled by fully accountable and transparent democratically elected governments. The Bradbury Pound and the Greenback Dollar worked extremely well and there was no damaging inflation. With the greatest of respect, Richard is putting forward a theory that is connected to this central banking system — myself and my friends are simply reminding people about actual, but very little known, historical precedents which are very simple to understand and which did the job until they were brought to a sudden end by the central bankers and their ‘bought’ politicians.
I’m now investigating EU Article 123 as suggested by Richard — but as I said before in a previous post as well as in my e-book, the European Union was created by the same mindset that created the central banks and the BIS. We all have a lot to learn and we must all work together to get the REAL truth out about money creation and money supply, whether for this country or for the world.
I am very well aware of the BIS, as are my tax justice colleagues
This is your last comment: this commentary is wasting other reader’s time
Peter, Richard’s reference is to Article 123 of the EU Lisbon Treaty, paragraph 1 of which reads:
“Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.”
To extract and translate into the language of the PQE debate:
“Overdraft facilities or any other type of credit facility with the Bank of England in favour of a National Investment Bank shall be prohibited, as shall the purchase directly from an NIB by the BoE of debt instruments.”
So to comply with this an NIB would have to sell bonds into the market, which the BoE could then purchase as part of a QE programme.
Which is exactly why I prescribed that route
I came here to investigate after seeing you a couple of times on BBC2.
You say “In so saying, of course, let me make clear that there is taxpayer’s money: it is the money they have the absolute right to enjoy after they have paid their tax.”
What restriction if any do you see on the state’s right to impose taxes, or is it an absolute right?
If the latter, what distinguishes your views from those of the Communists?
There is a ballot box
And it works
It is fundamentally different as a result
Your question makes no sense in that case
We can all express a choice on how much we are taxed
The question makes perfect sense. It was a request for your opinion, Mr Murphy. The ballot box will indeed determine to an extent what the State will decide, as you say, but that determination will come from voters, of which you are one. So it’s entirely legitimate to ask for your opinion.
To restate then, “What restriction if any do YOU, Mr Murphy, see on the state’s right to impose taxes, or is it an absolute right IN YOUR VIEW?
Best
Geoff
It’s an absolute right of a democratic state to tax within the limits of its electoral mandate
@Kenneth Widmerpool, @ Baxter Basics,
Recognition of any state doesn’t signify approval of the regime in charge as I’m sure you’ll know. But if we recognise the existence of that state, whether it be Communist, Fascist, a military Junta controlled state, a democratically controlled state or whatever, then we do have also have to recognise its desire to levy taxation on its population, and upon any visitors, as it sees fit.
So, on that basis we can say there’s nothing to distinguish anyone’s views. But of course, as Richard points out, it’s always better to decide these issues democratically if possible. And, yes Mr Baxter, we understand that no democracy is perfect.
I think your question well-addressed by Ben Franklin:
“The Remissness of our People in Paying Taxes is highly blameable; the Unwillingness to pay them is still more so. I see, in some Resolutions of Town Meetings, a Remonstrance against giving Congress a Power to take, as they call it, the People’s Money out of their Pockets, tho’ only to pay the Interest and Principal of Debts duly contracted. They seem to mistake the Point. Money, justly due from the People, is their Creditors’ Money, and no longer the Money of the People, who, if they withold it, should be compell’d to pay by some Law.
All Property, indeed, except the Savage’s temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.”
Doolittle on property: https://www.youtube.com/watch?v=DEEXmNhbBsE#t=921
There is a lot to be said for replacing the phrase ‘tax payers’ money’ with something like ‘public funds’. For decades we’ve been used to hearing one message repeated over and over: market value takes precedence over all else. So when people talk about getting ‘value’ for ‘tax payers’, it turns everything into a matter of market exchanges. The problem is, it also turns social relations into marketised relations, so those who pay more tax (because they are richer) end up thinking they’re paying for those who are taxed less (the poor, the sick, the disabled). It’s almost as if the latter OWE the former. The ‘wealth creators’ get to call the shots on public spending, because, after all, it’s ‘their’ money. By the way, I suspect this is also why the Conservatives favour lifting the poor out of taxation, rather than paying them more in the first place and letting everyone chip in at least a bit. This whole way of thinking is pernicious, and destructive of the social fabric.
Rather, we should get the message out that wealth is created in common – by communities (management, craftspeople, labourers and carers together) working together. And how that commonwealth is distributed is a matter for democratic scrutiny – by the (equal, single-tier) commoners, rich and poor alike!
One of the problems of language is that the “genitive” ( the “of” case, meaning, belonging to, or from, or consisting in) actually covers two diametrically opposed ideas, which are usually termed “the subjective genitive” and “the objective genitive”.
To illustrate, the phrase ” the fear of the state” could either mean “the fear which the state has” of some threat or danger, in which case it is a subjective genitive. In the alternate, it could mean “the fear felt by others with reference to the state, in which case it is an objective genitive.
The problem is that “taxpayers’ money” is almost invariably interpreted as meaning “belonging to” (when it would be subjective), when in fact it means “coming from”, when it is objective.
So it IS “taxpayers”, but only in the sense of “coming from”, and not, as Richard argues, in the sense of “belonging to”. There ARE languages, I believe, that distinguish these two cases, one of which I would guess is Finnish (of which I have no knowledge, other than that it has far more cases than Latin or Ancient Greek – 6 and 5 respectively, with fossilized instances of 1 or 2 further cases in both.
What this arcane contribution demonstrates is that precision in the use of language is fundamental to the development of an argument. But readers of this Blog will have no need to be reminded of that, given rge quality of the contributions of the Blogger, and those who post responses on this Blog.
Thanks Andrew
Although I would actually argue that the money does not even come from the taxpayer – they always hold it in trust for the state whose property it always is
I think we are back to Witgensteins’ interest in the way we are ‘bewitched by language’-no more so than in money matters. Until we wake up to these language games we are sleepwalkers. That’s why Bill Mitchel, in his NHS Action talk which Richard took part in,was right to emphasise language framing -Corbyn needs to start doing this PDQ.
I think the most important point about ‘tax is theft’ is that, by the same logic, property is theft. When someone owns something, the state has promised to exclude everyone else, by means of violence if necessary, from that thing. When the state taxes someone, it promises to exclude everyone but the state (or whomever the state pays) from that thing. There is no difference in principle, only in who is restricted from accessing particular things.
At time t=0, who says who owns what and who can violently exclude others from specific things, particularly natural resources? At present time, which processes and agreements are deemed legitimate enough that the state can be used to enforce them? Such matters can only be settled by political debate and institutions.
Where it gets problematic is when you move the ‘definition’ away from tax paid to money left after tax has been paid.
In the former case it makes a certain sense if you think that taxes fund govt spending but when you switich it around you have to contend with the fact the most of the money circulating is is private bank money that came into existence because of private bank lending and which has absolutely nothing to do with the govt or taxes. It will simply disappear when the loans are repaid. It’s all denominated in the same unit of account so I think you may have real problems getting this across.
“It’s an absolute right of a democratic state to tax within the limits of its electoral mandate”
Does this mean, Professor Murphy, that a democratically elected government has an absolute right to cut taxes, if this was spelled out in its manifesto? In which case opponents of the neoliberal tax policy should respect this “absolute right” (your term) and only look to reverse the policy at the next general election? If group A has an absolute right to do x, groups B-Z have no right to attempt to stop group A exercising its absolute right.
Within its own domain I have never argued otherwise
@ Roger Morbeck,
Your question is predicated on an incorrect assumption. Namely that “opponents of the neoliberal tax policy” are necessarily opposed to tax cuts.
We’re opposed to the idea that reducing spending and increasing taxes leads to a lower govt deficit. The experience of the 5 five years should have taught us all that.
We opposed the rise in VAT to 20% for example. We’d oppose any similar rise in future.
The govt deficit represents the savings made by the users of the £ in the economy. Those savers are mainly the central banks of the big exporters right now. Even if the average taxation level per transaction was only 1% the government deficit would be zero if no-one saved. Inflation would go through the roof though!
So taxation has to be seen in the context that its a brake on inflation. Not a revenue raiser per se.
This is an argument over the semantics of terminology. At the root of all the noise about this topic is the fundamental lack of accountability that is prevalent even in progressive and supposedly transparent governmental accounting.
Waste in government circles is abundant and while it may not be abundantly clear, mainstream society foots the bill for the bulk of the economy with a significant and Ill defined shadowy grey market successfully avoiding making a contribution but nonetheless benefiting from Wendell Holmes naively termed ‘civilized society’.
It is an uncivilized society that allows corporations to successfully lobby favorable terms from government, an uncivilized society that permits public funds to be used in pointless wars in foreign lands where no direct benefit is derived at home and it is uncivilized society that facilitates the use of public funds to bale out financial institutions that have effectively gambled in markets.
There is a lot to answer for in the way government manages it’s budget, collects taxes and administers the nation and arguing the question as to whether the monies are taxpayers’ or not, doesn’t progress the debate.
@Clinton Jones “There is a lot to answer for in the way government manages it’s budget, collects taxes and administers the nation and arguing the question as to whether the monies are taxpayers’ or not, doesn’t progress the debate.”
You are talking about an “agency problem” or really a “defectors’ problem”. Some people in both public and private sector delivery of goods and services can and will abuse others. The trick for the well-being of all in a society is to set up forms of control that mitigate against this abuse and clearly shared control over capital deployment between workers and entrepreneurs, competitive markets and government safety nets, services and infrastructure are examples of such control.
@john
“Doolittle on property: https://www.youtube.com/watch?v=DEEXmNhbBsE#t=921 – See more at: http://www.taxresearch.org.uk/Blog/2015/09/19/there-is-no-such-thing-as-taxpayers-money/#sthash.GQLG4h0t.dpuf”
Libertarianism’s distorted version of Adam Smith’s Invisible Hand (otherwise known by economists as the General Equilibrium Theory) fails to incorporate a necessary condition for the alleged beneficial outcome: the condition that human sociality and morals must set limits to the individual pursuit of self-interest.
This simply means thinking in socio-economic terms not libertarian!
Neatly put
“At its core tax justice demands that each person pay the right amount of tax at the right time, in the right place and at the right rate.”
I am glad to hear this said. Effectively, it as arguing for a tax morality which is not determined by individual feelings or convictions, nor even what the law exactly prescribes.
Moral relativism is an issue today. It is the idea that what is right for me may not be the same as what is right for you. If this were correct, then the right amount of tax would be a variable that depends on individual interpretations and judgements. The only way out is to have what is ‘right’ defined by law, so that there is a clear standard of arbitration should any dispute arise. This is how tax avoiders and HMRC can justify their approach.
The argument for tax morality supposes that there is an absolute standard (the exact details of which would still be worked out according to the law). The first step therefore consists in convincing people that an absolute standard of tax morality exists. The second step consists of persuading them to put it into practise.
Cutting out the talk about ‘taxpayer’s money’ would be an important contribution to the first step.
Thanks
One of the many quotes from the much missed Christopher Hitchens stored in my Kindle library is in reference to his Polish dissident friend Adam Michnik, who claimed that the battle of ‘systems’ was no longer ideological, but the crucial political difference was between those who did, and those who did not, think that the citizen could–or should–be “the property of the state.” I worry that arguments used by Mr Murphy suggest that he’s on the side of the authoritarians in this debate.
Thankfully, in modern-day practice it does not make much sense to say that the Government is the original owner of wealth – since many of us can change government very easily (ask a million Poles in Britain), and many of our businesses and even wealth portfolios are spread over many countries. So the Government of a particular territory offers merely a service, a big and complicated service, but really like any other service (supermarkets, broadband suppliers, airlines) – and of course in using that territory as a base or targeting the residents of that territory for sales then I sign up to pay for that service, including all taxes due (and I fully agree that people should be prosecuted for breaking their ‘social contracts’, in this regard). But, if I don’t like the service of that territory, well I can take my business elsewhere – in the modern liberal globalised world, I am not the property of any state, what is mine is mine (until I hand it over to a service I am contracted to pay for), and I think it is this level of freedom that really irks the authoritarians. They see other people using their freedom in ways they don’t like, and they yearn to make those individuals the property of the state once more.
I have absolutely no inclination to argue as you suggest
My thinking is libertarian
If we know what is the states and what mechanisms exist to hold it to account (not the same as owning, of course) then what is not the state’s is ours
There is a big plus in that
I have to say I cannot see the objection
I agree with others here and of course Professor Murphy.
The concept of ‘tax payers money’ is a confection meant to encourage public sector service users/the public to engage with people who deliver or who are responsible for public services. The theory being that if we feel that we have a personal stake in the service our involvement will improve the service provided and VFM will be generated.
By mentioning the phrase ‘tax payers money’ we are inferring that this money belongs to us/service users and denotes that we should be concerned about how it is spent. It is meant to help us take notice and become interested.
I’ve worked in social housing since the late 1990’s and in order to get tenants motivated to get engaged we talk about ‘their rent’ as a means to get them interested in the quality of our services.
To some extent it has worked but it has lots of drawbacks. For example I have found that by telling people it is ‘their rent’ (and it isn’t really – it’s the housing provider’s fee for providing the house – it’s a transaction) lots of personal opinions, value judgements and perspectives get pulled into the interaction.
For example, if I talk to tenants about how to help people in rent arrears or who are causing anti-social behaviour, the reponse is usually that this problem is caused by people who have no self control and those involved expect us to be punitive rather that helpful (I can testify that some good policy ideas have never seen the light of day because of bringing in such jaundiced views into the policy development process of a service provider).
I see the same phenomenon in public opinion about welfare reform – having told the public that taxes pay for welfare, it’s unsurprising to me when I see people’s reactions to the cuts (mostly positive I am told). The ‘tax payers’ money concept just helps to give free reign to people’s prejudices and over-personalises debate.
A concept meant to help us become engaged and have a form of critical consciousness about why things are as they are has only led to a sort of naieve consciousness – allowing us to look no further than our own opinions and feelings.
It plays to the “it’s mine” narrative
And that does not help when working in communities
Yes indeed. And modern politicians exploit it mercilessly.
This undermining of the fictitious concept of ” Taxpayers’ Money” is very useful to an amateur observer such as myself. It would be useful Richard if you could also help me understand the cliche of journalists and neo-liberal politicians of institutions (various) which are allegedly “owned by Taxpayers”. This phrase is usually associated by Organisations essentially owned by the Government such as Banks (RBS) and Railways (East Coast). I can understand politicians using this gambit to avoid the term “nationalised” but the universal parroting by the Media (TV, Radio & Newspapers) whatever their political leanings seems reprehensible to me.
Agreed
They are collectively owned: we have no personal stake in them
This is an interesting idea, but I think you’re confusing two things.
1) The tax that the government is spending is “theirs” to spend (by virtue of the framework in which it’s been collected).
2) That the provenance of the tax is the people.
In other words, it is taxpayers’ money. They therefore have a reasonable right to expect that it is spent fairly.
I think that taxpayers also overstate their rights to control that spending (given where it came from), but the tax now sits in the hands of government.
The issue is one of correction latency. The people do indeed have an option to correct misuse of state funds through the democratic process of elections and through less democratic use of QANGOs etc.
I feel though to reject any ownership (moral, strategic, cultural etc.) of that money though is flawed.
I really think there are some seriouys logical pproblems with what Richard Murphy is suggesting.
On the one hand I’ve seen him say that a government doesn’t need taxes (or debt) to fund itself. If that is the case, why is he always arguing for higher taxes?
Secondly, the idea that there is “no such thing as taxpayers money” is a very dark idea from a totalitarian land. Money is just the median of exchange used to value the fruit of our labours. So really this isn’t about “money” as such, and really is saying that our work and effort belongs to the government first, and not to us.
a) Tax is about reclaimning money spent in a way to meet social and economic gioals
b) If spending rises to must tax if infaltion is to be avoided
c) The idea that confirming what is the taxpayers is beyond doubt the taxpayers within a democratic framework seems to me to be stating a fundamental human right: the exact opposite of tiotalitarianism
I think MMT challenges the notion that banks ‘create’ money because loans do not create net assets-this is a moot point between MMT and the Positive Money stance.
The main issue with bank lending, in my view, is HOW it is used and how it can control highly destructive developments (asset bubbles).
MMT clearly states that ONLY the Government creates NEW money.
You are correct if you define money as proper money i.e currency. It’s just that hardly anyone else does.
It would certainly make things a lot clearer though.
There’s a clip on Youtube of Warren Mosler about to introduce Paul Davidson and he says one of the things Davidson taught him was never to use the work ‘money’. Always specify the financial asset you’re talking about. Bank deposits, Cash, Bank reserves whatever.