Vir Cantium

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Category Archives: Politics of envy

7 Ways In Which Polly is Wrong

She’s at it again, giving the Grauniad all £110,000-worth of her wisdom. This time, it’s …

The tax and finances of every citizen must be open to public scrutiny

…Taxes are the price we pay for civilisation: soon that price must become a public declaration for all.

So, let us count the ways in which Polly is wrong. This might take a while…

1. The idea that confidentiality of tax affairs is somehow a ‘cheat’s charter’ is akin to the authoritarian’s ‘nothing to hide, nothing to fear’ argument – with all the corresponding ‘guilty until proven innocent’ and legal crystal ball gazing that it involves. Do we have to keep the bedroom curtains open when indulging in you-know-what, just so that everyone can see it’s consensual?

2. Exposing everyone’s tax affairs is a good thing because, quoth Polly:

Transparency underpins a culture of social justice and civic duty.

Rubbish – it underpins a culture of envy and spite and stirs up (often unjustified) antagonism, fuelled by financial and economic ignorance which is, of course, what socialism feeds off. It reinforces the sneering culture that would rather vandalise an expensive car than aspire to own it.

The ‘civic duty’ bit is code for embarrassing – or, more accurately, bullying – people into paying more than the law requires. Well, I am happy to make a prediction: that the number of Toynbee cheerleaders who publish their own tax affairs (in full) will be around the same number as those UKUncut followers who voluntarily sent extra dosh to HMRC.

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So Farewell The #OccupyLSX Asylum

OccupyLSX defaced walls

#OccupyLSX revolting ... I mean, leading the revolution

This morning St Paul’s emerges from behind the human-scale petri dish that was #OccupyLSX and will be relegated to the pages of history … or, spoken of in reverential tones in two decades’ time in BBC retrospective documentaries in the same way as, not so long ago, was the Greenham Common Wimmin’s Camp. That exercise, too, proved just as pointless and ineffectual, though at least the sisters managed to keep a fairly consistent and clear message throughout their time there, in some contrast to the comparative rookies at #OccupySomewhereAnywhere-AsLongAsWeDon’tHaveToPayForIt.

I thought that as one of my first posts after my annual blogging sabbatical I would reflect on my own visit to the site – yes, I did go there and see it for myself, shortly before Christmas.

Of course, there were others like me surveying the camp, but one couldn’t help but get the impression they were viewing it not in awe, but going to see it out of a mixture of curiosity, quiet amusement and pity. I was put in mind of the old style Victorian mental asylums which admitted the general public as spectators. Surveying the poor wretches, living in their own little world, surrounded by others of the same affliction, convinced that their perception of reality was the truth … yes, I too felt I was having the same experience as those 19th century gawpers.

Ask any spectator what they thought, and the least offensive opinion could be summed up as “meh”.

OccupyLSX remember them?

Occupy St. Paul's ... remember them?

What is noticeable about the SquatLSX camp is the variety of ‘causes’ that have taken up residence there. Now to the organisers this is undoubtedly looked on as a ‘positive’ – yet in fact it only serves to dilute whatever could be loosely termed their original ‘message’. As with so many public protests of the Left, quantity trumps quality. A corner was devoted to protesting about an imprisoned Turkish socialist – what a way to get an obscure issue into the public domain than to hide it among the noise of every other trendy and tired leftist cause. And it is wholly Leftist, for all the talk from the SquatLSX organisers of representing the 99%.

Yet maybe I’m being unfair. Perhaps in the middle somewhere was the Ayn Rand bookshop, or the Ronald Reagan Memorial Tent. Perhaps the Finsbury Square satellite site is where they are holding the Friedman lectures.

I also noticed the portable loos were in place, though their presence clearly hadn’t stopped some from answering the call of nature at the door of God’s house. It was wholly unsurprising to sit in Starbucks and watch some of the nemeses of capitalism taking a seat on one of the evil capitalist comfortable sofas long enough to take advantage of the evil capitalist free wifi.

Now, once again the 99% can enjoy the magnificence of Wren’s creation without the added authentic squalor of Sir Christopher’s London that was provided by the squatters. Oh, and Starbucks can re-open their customer toilets.

Socialism for Teenagers

Another in what is now something of an occasional series. This one is a bit of an oldie, but a goodie:

A young woman was about to finish her first year of university. Like so many others her age, she considered herself to be Labour Party minded, and she was very much in favour of higher taxes to support her education and for more government programmes – in other words, the redistribution of wealth.

UK Conservative Party poster from 1929 warning...

Oh, how they laughed.

She was deeply ashamed that her father was a rather staunch blue-ribbon Conservative, a feeling she openly expressed. Based on the lectures that she had attended, and the occasional chat with a professor, she felt that her father had for years harboured a selfish desire to keep what he thought should be his.

One day she was challenging her father on his opposition to higher taxes on the rich and the need for more government programmes.

The self-professed objectivity proclaimed by her professors must be the truth, and she indicated so to her father. He responded by asking how she was doing at university.

Taken aback, she answered rather haughtily that she had a 90% average, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew. She didn’t even have time for a boyfriend, and didn’t really have many university friends because she spent all her time studying.

Her father listened and then asked, “How is your friend Audrey doing?” She replied, “Audrey is barely getting by. All she takes are easy classes, she never studies and she barely has a 50% average. She is so popular on campus; university for her is a blast. She’s always invited to all the parties, and lots of times she doesn’t even show up for classes because she’s too hung over.”

Her wise father asked his daughter, “Why don’t you go to the Dean’s office and ask him to deduct 20% off your average and give it to your friend who only has 50%. That way you will both have a 70% average, it would be fair and you would both be equal.”

The daughter, visibly shocked by her father’s suggestion, angrily fired back, “That’s a crazy idea, how would that be fair! I’ve worked really hard for my grades! I’ve invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!”

The father slowly smiled, winked and said gently, “Welcome to the Conservative side of the fence.”

Debt, Theft and Job Losses: The #UKUncut Manifesto

Suppose you were chronically financially inept and you regularly spend more than you earn. Now for a few years things work out OK; you figure out that you can get over the income shortfall firstly by selling the family silver gold, then by extending your mortgage every year – the bank’s happy to do it and interest rates are relatively low.

Then the banking crisis hits. Interest rates, driven by a sudden spike in oil prices, burst the bubble and suddenly the bank clams up. You also have to take a pay cut. What to do?

You could aim to cut back on your spending so that you’re living within your means. Yet there is an alternative: you’ve gotten by for years with a big mortgage without any issues, so why should it be a problem now? All these tiresome know-it-alls who say otherwise are just lying.

Sure, so some of your neighbours have had the bank repossess their places, but that won’t happen to you will it? Anyway, you know that the bloke in the big house round the corner is worth a few bob, and so, egged on by your dodgy backstreet accountant, you go round there, break in and nick some of his stuff – that’ll keep your head above water for a bit. After all, it’s not as though he’s your employer who might just up sticks and move to the next town is it? Although now you come to think of it, he did look sort of familiar….

Well, no guessing which is UKUncut’s preferred option.

So, let’s examine the world according to UKUncut.

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How The Left Don’t Get It (Part 94)

Q: “Why did the chicken cross the road?”

A: “The only reason the chicken had to cross the road is because of the crisis caused by the financial markets. Why should our members cross the road when it’s the bankers who have created this mess? It may be that the road is a lot narrower than the one the private sector chickens have to cross, but so what? It’s just not fair.”

So, in a way, goes any interview with trade union bosses at the moment. (Of course, it goes a little differently when they are asked about their own pay and benefits.)

Let’s try and get this straight, and not for the first time: the annual public deficit has been running for years, even in the good times. Thus the public debt was increasing, even in the good times (especially when you factor in all those PFI deals). The debt relating to the bank bailout will, in time, be repaid. However, the problem of government spending more than it gets in is a longer running problem which would have come to a head sooner or later.

If we’re looking for causes of the financial crisis – and there are many to varying degrees of culpability – then a basic knowledge of contract law would inform us that for an irresponsible lender, there must have been an irresponsible borrower on the other side of the deal. That, then, would bring into the dock many ordinary people, a for more uncomfortable prosecution in the court of public opinion than the easy targets of the banks.

Yet the point is that the financial crisis was only the spark that lit the forest fire of the bigger and deeper rooted fiscal crisis, growing from the seeds of short-termism, of wanting it all now and pay for it sometime later – if not on someone’s mortgage then let’s have it on the PSBR. How many such unsustainable instances of growth in public spending were rejected by the comrades in the trade union movement?

Socialism for Dummies Part 94

Socialism is the sort of simplistic political philosophy that a child could have come up with; set in an innocent naive world where those in authority know best and should be obeyed so that every need can be fulfilled.

So it’s appropriate that some of the most effective lessons in Socialism And Why It Will Never Work come in the form of fairly simple stories – parables, if you will – and not all are as long as Animal Farm. I related one a while go here. Now, via Fausty, here’s another good one:

An economics professor at a local college said that he had never failed a single student before, but had recently failed an entire class.

That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich – a great equaliser.
To counter this, the professor said, “OK, we will have an experiment in this class on Obama’s plan”.

All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.

After the first test, the grades were averaged and everyone got a B.

The students who studied hard were upset and the students who studied little were happy.

As the second test rolled around, the students who studied little, studied even less and those who had previously studied hard, decided they wanted a free ride. So they too studied little.

The second test average was a D!

No one was happy.

When the 3rd test rolled around, the average was an F.

The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when government takes all the reward away, no one will try or want to succeed.

It does seem that the story is apocryphal, but that hardly matters; the moral holds true.

Bank Off

So the Chancellor is to impose a super-tax on bankers bonuses. The mob will be pleased. The red herring is waved in front of the news agenda-setters for a little longer, and we all forget that we are the only G20 nation still in recession.

Yet it’s not a super-tax; it’s a super-super tax. What the non-accountants in the debate are not aware of is that these bonuses are already going to be taxed next year at an effective rate of up to 61% (or more) – even today, 41% is the going marginal rate. And let’s not forget the employers’ NIC usually charged at 12.8%. All of which means that these bonuses are already being taxed at considerably higher rates than if the money had stayed with the banks and been taxed, at corporation tax rates, as regular profit.

There is another angle to this also: the bonuses are ultimately dictated by the market – and a global market at that, which is unlikely to ever prove entirely captive to regulation. Pay under the odds, and your key people leave. If your key people and revenue earners leave, then what’s going to happen to your future earnings and thus your share price? And since we are all shareholders now in RBS and the like, shouldn’t we be pleased that those managing these businesses on our behalf are endeavouring to maximise our portfolio’s value?

Of course, what do I know? Better to ask that font of all economic knowledge, Vince Cable. Quoth he:

If we are looking for more tax money, the place to start is with the banks. Some are making very large sums on the back of a taxpayer guarantee and we should demand a fee for this – ten per cent of profits.

10%? I think they’ll be delighted with that – far less than 28% in corporation tax, which is the current basic rate payable, and that on top of the 74% the bonuses will be generating next year. And that’s not considering the dividends that UKFI will be collecting.

Vince … stick to economics; tax and finance clearly aren’t your strengths. Then again, we’re not even sure about the economics.
(Now back to the real work and the light blogging…)

Chips (On The Shoulder) With Everything

Clare Irby with, we assume, her knickers on.

Clare Irby with her clothes on

From the Express (but you could take your pick of other outlets):

A SOCIALITE accused of having a drunken romp with a stranger on a plane wept tears of joy yesterday as she was acquitted.

[…]

It was claimed that Miss Irby, who had been on holiday in Goa, drank large amounts of red wine, allowed [fellow passenger Daniel] Melia to fondle her breasts and stripped to her knickers. … [she] was accused of leaving her two-year-old son alone and crying while she kissed and caressed Melia.

One passenger claimed Miss Irby told Melia she was feeling more relaxed than usual because of “all the opium I’ve been taking”.

… witnesses including four air stewardesses and the captain of the flight from Bangalore, said Miss Irby and Melia were “loud and disruptive” during the flight.

… Miss Irby was said to have continued to demand “more and more” wine from the crew. She allegedly called them over every 10 minutes, was rude and insulting and even threw a dirty nappy onto the seat behind her.

I’ll bet that was a fun trip.

There are two things about this story that I find somewhat depressing. First, the alleged behaviour, about which plenty of condemnations have already been made and which I agree with.

The second troubling aspect, though, is the reaction to her acquittal. Now it seems the result of the trial hinged on whether she was still drunk by the time the aircraft entered UK airspace.

Judge John Denniss told the jurors they had to decide whether Miss Irby had been drunk on an aircraft while in the “territorial jurisdiction” of the UK. This started about 20 minutes before the 11-hour flight landed at Heathrow at about 5pm, he said.

In the light of medical testimony and the flight schedule, the jury appears to have decided that she was not.

Yet that’s not what happened according to the wisdom of the callers to Jeremy Vine’s show this lunchtime, as well as various online comments. Miss Irby, it is implied, got off because she had status / money / was an heiress. Short of bribing the jury or the judge, I’m not sure how those factors had any bearing on the jury. (OK, so Miss Irby may have had a good lawyer … but that doesn’t negate the validity of the legal arguments put forward).

People are entitled to their bitter and spiteful views, of course. Nor am I going to excuse Miss Irby’s behaviour – indeed I am as disappointed as anyone that she will not face punishment if what allegedly happened did happen, but try this: what if the accused had been of an ethnic minority? Would we be hearing speculation that she only got off because she was black? Of course, not; at least not much beyond the BNP message boards.

My point is this: Clare Irby was born an heiress, so why is it OK to let rip with prejudice against class or money when most decent people wouldn’t dream of doing so in reference to race, or some other characteristic bequeath by the circumstances of their birth?

Ooh! Look Over There!

It seems to be a fairly reliable rule of thumb that the more countries agree to do something, the less likely it is that such an agreement will actually change anything.

So it’s no surprise that the headlines from the G20 have centred on the latest “action” from the finance ministers to curb bankers’ bonuses (boni?).

This is, or course, to miss the point of yesterday’s declaration. The huffing and puffing over bankers’ pay is just another distraction technique to divert attention from the real issues – the failure of the UK stimulus package, how most other countries are set to emerge from the recession before us, etc, etc. Always easier to burn a few witches rather than get on with actually tackling the plague, eh?

It is a sad reflection that the focus on those evil bankers paying bonuses for the heinous act of making profits for their employers, appeals to the basest human instinct towards envy.

Then there is the effect on the tax take. How? Well, although a few may be playing the residency system, most will have paid tax on those bonuses (or paid tax on one year, rather than spread over longer periods). They would have paid tax at typically 51% (ignoring the effects of pension and personal allowance restrictions). Now, those bonuses, if not paid and retained by the bank, will be taxed with the banks profits at 28%. if circumventing the rules involves converting the bonus into capital, then we’re looking at just 18% tax. All this assumes, as I mentioned, that those bonuses/profits even get taxed in the UK now. Nice one, Darling.

The irony of all this, though, is that the curbs on bonuses are aimed at reducing the short-termism that is blamed for giving rise to the irresponsible borrowing by individuals lending by banks which set up the credit crunch. Whereas, on the other hand, the short termism of trying to reduce the incentives to profitability and success in a major UK industry, and the reductions in tax revenues that will result is somehow visionary and far-sighted?

Labour May Be Dying, But the Class War Continues

Yes, the scorch marks in the earth are multiplying:

Hundreds of independent schools could lose their charitable status unless they increase fees for middle-class parents to fund more bursaries, a landmark ruling indicates today.

The two schools that did not pass the charitable test are relatively small prep schools. Both failed because they did not offer enough bursaries, even though they were praised for running initiatives which helped local children and organisations.
One, Highfield Priory School in Fulwood, Lancashire, does not provide bursaries because it keeps fees as low as possible, and does not accrue a surplus.

This is not just unfair, it is wicked and vindictive. The recession is already forcing some private schools to close – Baston School in my own ward is one (and I wonder how many of the brains behind this these changes are on final salary pensions and automatically index linked pay?)

The parents of children in private education should not be ashamed – after all, they already pay twice for education – or, to put it another way, subsidise other children through their taxes and create state school places by removing their children from the state system.

The moves by the Charity Commission do not add up by any reasonable definition of “public benefit” or indeed “social justice”.

Interestingly, there are many other “charitable bodies” which the Commission seems unconcerned about.