Tuesday, 16 January 2018

Some people are a bit confused

From The Daily Mail:

Last April, federal prosecutors filed charges against two men suspected of spying on the opposition People's Mujahedin of Iran (MEK) on behalf of Iranian intelligence, Deutsche Welle reported.

The Paris-based MEK is an Islamist-Marxist-feminist militant group seeking to overthrow Iran's theocratic government. Iran has blamed the group for stirring up protests earlier this month in Iran.

I know what each of those four adjectives means, and I am sure there are plenty of groups which tick two of those boxes; if you drop "Islamist" then a group which ticks the other three is plausible; going for all four is a comedy sketch.

Killer Arguments Against LVT, Not (432)

From Farmers' Weekly:

The Scottish Land Commission has been instructed by the government to investigate the tax as part of a wider piece of research on land reform issues.

The taxation would raise public revenue through an annual charge based on the rental value of land, typically levied against the unimproved value of that land, not taking into account any buildings, services or infrastructure.

So far so good, here's the classic one-liner:

Shadow rural economy secretary Peter Chapman said the prospect of such a level could be “catastrophic” for farm incomes.

Woah! His argument is totally devoid of facts - without knowing the proposed tax rate (anything between 1% and 100%) it is impossible to say what the impact will be. It could be anything between "very modest claw back of agricultural subsidies" (which average out at £40 per acre per year in Scotland, as far as I can make out) all the way up to "quite a lot".

Then we get into logic free arguments:

Andrew Wood, partner with property consultant Bidwells, said this plan would increase food production costs and put Scotland at a further disadvantage for doing business and securing investment.

Whether it increases total food production costs or not depends on whether the Scottish government reduces other devolved taxes (income tax, business rates, LBTT and Council Tax). Because of the tendency of LVT to stimulate output per unit of land, per-unit production costs will probably fall, or worst case, stay the same.

LVT has little impact on "doing business", in fact it probably helps people wanting to "do business" because it strengthens their hand against land owners who want to hold them to ransom charge them rent, and after all, it's "business" which invests, land is just there to be used.

Money for nothing...

From the BBC:

Rudi Klein, head of Specialist Engineering Contractor, an umbrella group representing suppliers to the construction industry, said Carillion outsourced virtually all its work.

He said the government knew of Carillion's reliance on sub-contractors, but continued to award the company lucrative work despite growing concerns about its finances.

"It's that supply chain who is going to bear the massive loss," he said. "There could be a large number of firms that will experience substantial financial distress."

... and presumably their chicks for free, although that is not expressly stated.

Monday, 15 January 2018

Carillion: Winners and Losers

City AM have listed the winners to save me the bother:

... Amid the chaos, however, lurk some cunning opportunists – most of whom can be found in Mayfair.

In many ways, Carillion has been the story of the short sellers. The most bet-against stock in Europe will see hedge funds share profits of around £300m between them. Marshall Wace took the biggest piece of this as shares plunged in the autumn. After it exited stage left, the fund was quickly replaced by rivals, steadfast in the belief worse was to come. Blackrock, the world’s biggest asset manager, has stuck around and still holds a chunky bet against the contractor.

Then there is a raft of advisers picking up hefty fees. The jewel in the crown would be the administrator mandate. EY is reportedly in the box seat, but pension scheme adviser PwC may cry foul, arguing its rival has a conflict given EY’s six-month role helping the company right-size operations.

But never mind the winners, back to the many losers from Carillion's decline – including, of course, the government. A decade on from the financial crisis it is incredible the state yet again finds itself under pressure to consider a taxpayer bailout of a private company, this time during a period of economic growth. Such situations imperil public faith in business and the very principles of a market-led economy, and remind us that regulators – in the financial sector and beyond – have some way to go before we can be confident that the spectre of bailouts has been consigned to the past.

As to paying hundreds of millions for "administration", sod that. All the government needs to do is send somebody round to each site where Carillion operates and tell everybody "You're working for us now, here's your new employment contract". Those people will then get onto their own suppliers and tell them to send future invoices to the Department of [whatever] and everything continues as was. It'll save the government taxpayer a fortune.

This is also another argument for deposit funded corporations - like building societies, co-operatives or partnerships, they don't have a share price, so speculators will have to find something better to do.

Sunday, 14 January 2018

Daily Mail on top form

Black cab rapist John Worboys set to live in £300,000 seaside flat near FOUR of his alleged victims after his release from jail

Friday, 12 January 2018

Killer Arguments Against LVT, Not (431)

Arch-Tory/NIMBY Nicholas Clarke on Twitter @drmagwai

And what you fail to mention is that lvt only works properly when all land is already developed. Do we want the UK to become a mega city?

This is the sort of baseless crap that we have to deal with.

I remember that Sobers (I think it was him) once advanced the argument that LVT would only work for an agricultural economy, also without justification or explanation.

As per usual, we are presented with two baseless arguments which cancel each other out.

Let's take a breath and do facts and logic:

1. Most of the UK by surface area is 'developed'. Up to one-tenth is actually built on (incl. roads, reservoirs, back gardens etc) and most of the rest has been 'developed' or adapted for farming and some bits have been kept close to pristine for tourism, leisure, wildlife etc.

2. Even if both arguments, taken in isolation had some validity (which they don't), then it would be quite easy to split up the UK (or any similar country) into two regions - the urban bits (where LVT would work properly, even by Nimby Clarke's own admission) and the remaining rural area (where LVT would work fine by Sobers' admission).

3. The UK is not going to become a mega city any time soon - with or without LVT - it would require a twenty-fold increase in population to about one billion to make it worthwhile. So that is the stupidest rhetorical question of the day.

What is the tax base under a LVT + Citizens Income?

One objection against LVT I recently stumbled over was that as a single tax it violated the principle that everyone should contribute to state spending.

Saint of Bacon who recorded a video on Youtube critiquing the LVT said "My argument is the idea of a single tax isn't going to fly in the US because we've adopted the view that everyone should pay into the government. Meaning having some segment of the population be tax exempt by choice isn't how America likes to function. Efficiency only gets so far and that is my point, quoting philosophy that I don't subscribe to isn't going to convince me. You're literally in the position of a Christian quoting Bible courses to an atheist."

Let's assume for arguments sake the LVT could indeed cover all of state spending is Bacon correct?

Say a country spends £250bn on services and £250bn on benefits.  As the rental value of land is £500bn pa, for reasons of efficiency and justice it decides to shift to a LVT and Citizens Income , negating the need to tax incomes, capital or transactions.

The principle behind the LVT is that it is a compensatory payment to those excluded from valuable natural resources. That it is collected and redistributed/spent by the state is a separate issue.  As we are all equally excluded we are therefore all entitled to an equal share of the rents, so this hypothetical country does this by paying out the £500bn pa as a Citizens Income.

This country still has to finance £250bn of spending on defence, schools, hospitals etc, which it does by imposing a Poll Tax on each citizen.

For accounting purposes this makes no sense. So instead of collecting the Poll Tax, it's less bureaucratic just to deduct £250bn of the LVT at source, and pay the other £250bn out as a Citizens Income.

This is viewed by Bacon that only those that pay the LVT pay into state coffers, but that's not correct because that's not what is happening in principle.

The correct view is that the LVT  doesn't belong to the state as tax. The state is merely its collector and redistributor. Therefore any citizen that does not receive their full amount of compensation with no deduction is paying a defacto Poll Tax.

And as all taxes on income, capital and transactions are to some degree incident upon land, that's also true of all current tax systems around the world.  That is, we pay into state coffers simply by not receiving our full share of  land rent.

Thursday, 11 January 2018

Oh shit, here we go again...

From the BBC:

Former UKIP leader Nigel Farage says he is close to backing a second EU referendum to end the "whinging and whining" of anti-Brexit campaigners.

Mr Farage told Channel 5's The Wright Stuff a fresh vote could "kill off" the Remain campaign for a generation. He said "the percentage that would vote to leave next time would be very much bigger than it was last time round".

Pro-EU campaigners welcomed his comment, claiming "support is growing" for another referendum.

I'm all in favour of democracy, but this was TPTB's Plan B all along.

As soon as they realised that a slim minority had voted Leave, they decided to mess up Brexit as badly as possible, really drag it out, sign up to some unacceptable terms and conditions (like massive future payments) and agree to impose massive import tariffs that would really hurt the consumer.

Then, acting all innocent, they would announce a second referendum asking people whether they would like to jump out of the frying pan and into the fire, the outcome of which would likely be "Sod it, if it's going to be that bad, let's stay in."

Suitably heartened, the EU would then swiftly impose loads of federalist measures, like what they are trying to do to Poland, Hungary and the Czech Republic.

We also have to assume that Farage's vanity trumps his political intelligence.

Wednesday, 10 January 2018

The world has gone completely mad.

A lot of diesel cars are clearly labelled 'diesel' somewhere near the filler cap so that you don't put in petrol by mistake, that's a good idea.  I can never remember which fuel my wife's car uses, so it's good that there's a visual reminder that it's a diesel. If an organisation runs a large fleet of cars with lots of occasional users, I suppose it makes sense to label the petrol ones 'petrol' as well. That's all fine.

But I walked past a parked police car today and noticed that next to the filler cap, in one inch high letters was the word "UNLEADED".

FFS, can you even buy leaded petrol any more and if so, where? I thought you had to buy unleaded and chuck additives in.

(I didn't dare take a photo to prove it because some coppers don't take kindly to that sort of thing, and I was going to take the piss out of them anyway).

Nearly as stupid are all the vehicles with a sticker on the back saying "Limited to 70 mph". That's the maximum speed limit anyway, so nobody would reasonably expect them to drive any faster.

Fun with numbers

From City AM:

Last month Persimmon chairman Nicholas Wrigley and Jonathan Davie, the chair of its remuneration committee quit, after it was revealed Fairburn along with 140 senior management were in line for payouts totalling an estimated £800m in aggregate...

Persimmon said it has made a "significant contribution to increasing UK housing supply" since 2012 by building more 80,000 new hones. Annual production has jumped by 70 per cent and cash coffers swelled in 2017 jumping, from £913m to £1.3bn.

Let's be generous and assume that the bonuses relate to the whole five year period.

£800 million ÷ 80,000 homes = £10,000 per home.

Based on an average selling price of a Persimmon home of £225,430, the SDLT for a first time buyer would be £nil and for a second home buyer it would be £8,771.

Funny how the likes of City AM/The Taxpayers' Alliance wail about Stamp Duty Land Tax but not the extra £10,000 which these companies can charge for a home (largely because of Help To Buy). City AM's editorial even praises such bonuses (Bonuses are the best motivators we have)!