In shocking news this morning, a wealthy man - Dan Neidle of Tax Policy Associates, who used to be senior tax partner of Clifford Chance, one the most prominent and highest earning firms of solicitors in London - has found that wealth taxes won't work using all the arguments usually used by the wealthy that have been created for them by the economists that they sponsor:
Next up, the Pope is a catholic, after all.
Now, he's right about the implementation details, which is why I propose other ways of achieving this goal, but the rest is total trickle-down nonsense.
No surprise there then.
I bet Labour loves him. This man, who has never been a friend of tax justice, goes down really well with the likes of Rachel Reeves, and staggeringly, he has always been a Labour Party member, despite his long-held views that opposed just about everything I have ever stood for on taxation issues.
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In Summary:
Dan Niedle – Knowledgable, successful man has good ideas about taxation.
Richard Murphy – less knowledgeable, less successful man has flawed ideas about how other people’s money should be taken from them to fund his pet projects.
So far this morning you have been Jackie Carter, Timmy H, James Brooker and Harrison.
And you think I am the one with a problem?
You trolls really are very stupid.
Are you a “knowledgeable, successful man” who has money you are worried about being taken, or are you just another turkey in favour of Christmas? I suspect the latter.
Thanks Richard for really giving concrete ways in which we can try and bring back some fairness and equality in our tax system. When I hear, as above, people dismissing a wealth tax on the grounds it wouldn’t raise the money needed, it instantly tells me they don’t care about the inequality currently increasing and making our country a disaster in the making, maybe already made! They never have any other suggestions, never say that the current situation is bad, because for them it isn’t.
The other day I heard a report that museums are now struggling to buy dinosaur bones as they are being bought by wealthy people and being squirrelled away in bank vaults. This really backs up what you say about wealth being difficult to value, and the amount of money people now have that they really are struggling to think of things but.
Keep up the good fight Richard
Thanks, and I will, Lucy.
Having actually read Dan’s report I can tell you that largely he rejects the wealth tax and adopts the idea that we should tax the income from wealth more/differently.Much the same as you. So what’s with the hostility?
The fact that he suggests taxing wealth more will harm the economy. It would not, and even could not.
I have already acknowledged the rest.
Makes me laugh about ‘growth’ – it’s always about an increase in the growth of money and nothing else – that is the big lie when Neidle and his ilk talk about ‘growth’.
I wish someone would challenge this common definition of ‘investment’.
What it should mean: “injecting capital into enterprises of all kinds so as to create new value by building new assets – including the intangible assets we so sorely need, such as health, wellbeing, biodiversity, climate mitigations etc. etc.”.
What it actually means: “buying up existing assets in order to make them scarce, so that the people who have no choice but to use them can be milked for all they are worth”.
Or, at best, “pouring money into any enterprise that looks capable of becoming a monopoly/monopsony until it’s competitors fail, and it becomes an asset that people have no choice but to use, so that they can then be milked for all they are worth.”
Very good
Well at least we can be thankful the ignorant unsuccessful trolls are wasting their time writing garbage, rather than doing something that might further their deranged agenda. Although I suppose they’re wasting your time too, and maybe that’s the point. Would you like me to try to train a machine learning model to identify troll posts?
They’re not hard. They have zero previous comments – but the trouble is, genuine people can also be in the same position and sometimes the difference is not clear for a while.
Indeed, the first comment I ever made on this blog, (and there have been very few) was dumped, but that was OK because when I looked at it, it was not much added value and a waste of bandwith – yours and the readers. You have explained your moderation policy and I feel that it works well because the comments are a very strong component of this blog, please keep it up.
I have to guess with new commentators: I will sometimes get it wrong. I am human.
And thanks.
But won’t someone think of the billionaires!
What I can’t quite grasp is that the government thinks the only way of getting investment is through the wealthy. There’s no reason why the government can’t open up a seed capital department who’s only job is to invest in new and promising businesses for a share and then when these businesses are working they sell the shares for a high price. This is what Mariana Mazzucato has been advocating for, it’s what the US does to an extent, why don’t we? Especially as you say the London stock market is no longer a source of reliable investment now.
There is a video coming on this issue in the wealth series.
Good points Alex. In the same vein, I don’t know why our wonderful Chancellor could not have used public sector pension funds to finance much needed green projects such as closed loop hydro projects. We need thousands of these and a return on investment can be assured. New companies could be established to take up this finance. Such companies could have shares held by Local Authorities, Trade Unions and consumer groups. Other projects / companies such as solar, wind etc could be financed in the same way.
Thank you for your work to educate people about how the monetary and tax systems work.
I was surprised to learn some time ago that you are opposed to a wealth tax, though it seems based on some of the reason you have given, that in particular you are opposed to a general wealth tax on all classes of wealth held in the uk (or whatever jurisdiction was to implement it).
You do, however, (according to my understanding) advocate for what is an effective tax on one class of wealth already – cash savings. You rightly point out that sovereign governments with thier own currency (and without significant debts not in that currency) have no hard limit in how much they can borrow and spend, there is of course an effect of that expenditure – inflation or a reduction in the value of assets denominated in that currency (most significantly cash deposits). So unfunded government spending is a tax on wealth, but only on cash deposits. This (in moderation) is great, but why only tax this class of wealth?
It’s also the case that it would be foolish to tax some other wealth classes. Taxing movable productive assets would be madness. But a modest tax on land value and the value of intangible property rights enforcable in the uk would be great (and easy because non-payment can lead to a lapse of that property right). Also, while it has in the past been a tequnique to avoid tax by offshoring intellectual property rights and then reducing a uk based entitie’s profits by paying for those rights, this kind of taxation would not be susceptable as it taxes the value of the right in the uk irrespective of where it’s held.
In short there should be taxes on some classes of wealth but not others!
Very politely, if you choose to make up what I say, and you are, and then you draw incorrect conclusions about what I think, or propose, and you do, you end up writing nonsense, and you have. Why have you wasted your time doing that? Why not, instead, read what I have actually suggested, which is readily available here https://taxingwealth.uk/ and then come back and provide your recent comments, if you have any?
Prof. Murphy,
I am sincerly sorry if I have misrepresented any of your views, that was not my intention.
I understood that you advocated that the uk goverment should run a deficit and inded a greater one than it does currently.
I also understood that you were opposed to a weath tax, favouring instead changes to taxes on income, https://taxingwealth.uk/ seems to support that understanding.
You are right. But how can those positions be related to your earlier comment? I can’t see the connections.
I thought it was uncontroversial that unfunded government spending tended to (all else being equal) cause inflation. The government spends out money without clawing it back in that increases money supply which tends towards devaluing the currency (ie cash savings are worth less). Up to a point this is a good thing, but it is in essence a tax on one form of wealth – savings.
In guess my more fundamental point, though, is that wealth taxes shouldn’t be seen as all or nothing, different wealth classes should be taxed differently just as different forms of income are taxed differently (and I very much agree with you that ideally unearned income should be taxed if anything more than earned income). Spoons should not be taxed but IP and land should.
1) Your first para claim is simply not true. It is wrong. If there are under utilised resources in the economy putting them to use cannot create inflation.
2) There is no such thing as unfunded government spending. It is all funded identically – by the Bank of England.
3) Inflation is not a tax unlessa you are a neoliberal fundamentalist and then you are just wrong about this.
4) All wealth has to be taxed equally or you encoruage loopholes and abuse.
You need to up your game to stay here.
Your point 2: I’m happy to not use the word “unfunded” as it might seem perjorative (not my intent), all I meant to denote by “unfunded” was spending not matched by taxation. If I haven’t made it clear: I understand very well that the UK government can essentially spend as much as it chooses (though there are consequences).
Your point 1:I’m suprised that you seem to flatly deny any link between, deficit spending and inflation. If the private sector continues to spend the same and government spending increases I agree it will utilise previously under used resources (it will stimulate the economy) but as demand has increased it will also increase prices. I know that price elasticity of demand is a simplistic model and there are lots of exceptions and nuances but (at least in the short term) it is almost always the case that increased demand will result in an increase in price. Essentially the under utilised reasources are more expensive than the previously used ones to achieve the same effect.
If inflation (or interest rate rises to combat it) in no way constrain deficit spending what does? Can a government increase its deficit without limit? To be clear I’m not saying that there shouldn’t be a deficit or that the deficit should not be increased, I am saying that there are negative as well as positive effects of it which should be weighed.
Your point 4: I don’t think that the introduction of a novel tax of the types I’m suggesting would create loopholes in other existing taxes. Of course, the introduction of any tax is going to create loopholes but that isn’t a reason never to introduce novel taxes. That they are broadly enforceable is esential. A more reasonable critique might be that different taxes on different asset classes would create market distortions. They would, but as I’m not a neoliberal I’m more interested in whether those distorions are beneficial or detrimental.
Yours sincerely, respectfully and in good faith,
Ian Barker.
Re 2: noted
Re 1: You keep making up what I say, and that is why this is your last time wasting post. I have never denied this link. The whole of MMT is based on the link. There is a link when full employment is reached. You miss the critical point.
Re 4. Your novel taxes are exceptionally poorly designed.
Sorry, but you are arrogantly wasting my time.
Are you sure? My reading of his work is a little different:
1) Common ground that direct taxes on wealth are hard to implement;
2) Common ground on some of the ways more revenue could be raised from income arising from wealth;
3) Common ground that HMRC should be better resourced to tackle evasion.
Granted, I find Neidle a little unambitious about how far we could pursue 2) but to honest I am increasingly fed up of the left and centre’s insistence that everyone must be perfect or discredited whilst the wealthy carry on laughing all the way to the bank.
Sorry, but all the economic drivel he includes is what I made clear I took issue with.
And Neidle has never been a friend of tax justice, in my opinion.
Much to agree with, except… the Pope might not be Catholic, after all!
https://www.youtube.com/watch?v=RMf4OtC7SXY
Who knew?
(Apologies – just being mischievous!)
Thank you for being an honest man. You say out loud what we all know.So make sure you cover your back at all times. I particularly like the way you stand up for Scotland. Thank you and be careful.
I will be. Thanks.
I read Neidle’s article and reached very similar, if substantially less educated and knowledgeable, conclusions and, having followed the links in his article to his proposals for tax reform; it all seemed to me very much trickle-down nonsense and a set of reasons not to do anything that might in any way slightly inconvenience the very wealthy financially in case they abandon us.
So I was very pleased to find your article in my email confirming my thoughts.
Like others I feel the ground being prepared for significant cuts to welfare, with preliminary skirmishes to establish the impossibility of a wealth tax.
As a sometime historian I recall that when William conquered England in 1066, among his first moves was to establish who owned what and where (Domesday and Little Domesday) so that, by right of conquest, he could raise revenue.
I think we need a new Domesday, aks a new valuation for council tax.
KBO