No Taxation Without Misrepresentation: The Telegraph on Richard Murphy

October 3, 2015

The Telegraph carries what on the face of things is a damning gotcha piece regarding Corbyn and Richard Murphy’s tax plans:

“Britons should be levied with a new £100billion “tax on consumption” paid directly from their bank accounts, according to Jeremy Corbyn’s tax adviser…Richard Murphy, who drafted some of Mr Corbyn’s economic policies during the Labour leadership campaign, said people’s money should be taxed as they spend it.

…The controversial measure is set out in Mr Murphy’s new book, called The Joy of Tax, which is published this week…Mr Murphy (below) says in the book that the new consumption tax could raise over £100billion a year and replace National Insurance Contributions, which disproportionately hits poorer people.

…It says: “I think that a progressive tax on the total sum paid into and out of people’s and companies’ bank accounts is now essential…“This simply requires that the rate charged increase as the total payments into and out of bank accounts connected to a person increase…“This is the tax that can, in the 21st century, end the absurd need to tax labour and its wealth creation and instead shift that tax to excessive consumption, a shift we know is now needed.”

I mention the Telegraph piece because it is the only one I have found that actually mentions Murphy’s thinking on tax (aside from an article the Sun, which is behind what is probably the web’s least attractive paywall).

From Richard Murphy’s own Tax Research website, a more complex and accurate picture emerges:

a) Murphy doesn’t think that National Insurance works: “Because it is regressive. Because it can discourage job creation. Because it was designed for a world where people were employed in one job, often for life. Because it is too easily avoided. Because the contributory concept has long gone. Because it no longer works as a result.”

b) What Murphy calls a “progressive consumption tax” would be fairer and a more efficient way of raising revenue: “For those on median pay very little tax would be due. The same would be true of small businesses. But as personal spending grows or as the size of business does so would the tax charge.”

The Telegraph may not be dissembling by claiming that “YOUR BANK ACCOUNT” will be plundered by a Corbyn government, if we assume that the “Your” in question refers to a tiny sliver of the rich – the paper’s natural constituency. But everyone else should welcome a more progressive alternative to NI contributions.

It is interesting to read papers like the Telegraph at the moment. Spurred on by the election of Corbyn and the leftward drift of the Labour Party, the far right press is giving plenty of space to the ideas of people around the Corbyn camp. In the process, ideas that have been out of favour on the mainstream left for decades are enjoying enviable exposure – as in this litany of the policies proposed by Corbyn’s economic adviser Andrew Fisher [“Ban sackings, scrap the City, create a three-day week: The world according to Jeremy Corbyn’s new political adviser“].

Most readers are not deeply invested in the ideology behind the papers they read. They take what they will. When people read that two thirds of British land is owned by 0.3% of the people, that with technological progress working weeks can be shortened, that private renters could be given the right to buy from exploitative landlords or that workers could assume onwership of the companies they work for – not all of them will sneer or recoil in horror.

The genie is out of the bottle – be careful what you wish for.


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