Thursday, 18 July 2019

Daily Mail On Top Form

From The Daily Mail:

The son of a murdered civil servant branded her sex-obsessed killer an 'evil being' as he faced him down in court today.

Kasim Lewis, 32, bound and gagged Catherine Burke, 55, in her £700,000 home in Muswell Hill, north London, before stabbing her to death in November 2017.

He was given a minimum 40-year life sentence this afternoon.

Killer Arguments Against LVT, Not (465)

I received an email from a drone at Tory propaganda unit, it's a classic of the genre, and illustrates the sort of crap we have to put up with:

Anyone who thinks there is a simple solution is either a conman or particularly dumb (see also MMT).

Firstly, if you introduce LVT, you need to abolish all planning laws.

It heavily penalises everyone who has scrimped and saved for a house.

Further it discriminates heavily against manufacturing (you need more space to actually make stuff).

This is why no country in the world has introduced this idiot idea save Taiwan, where predictably it has been a disaster.

There is a "simplish" solution: tax at Scandinavian levels - 25% VAT, 30% basic with little to no personal allowance. It is proven. Unfortunately it is bloody hard work and involves sacrifices

Additional KLN says it was "disaster" in Taiwan: This is why no country in the world has implemented it to any serious degree except Taiwan, where it has predictably been a complete disaster. There are no easy, elegant solutions, only hard ones.

Every single one of those claims is either untrue, irrelevant or both.

My favourite bit is the notion that everybody else apart from him should make sacrifices.
Henry Law from LVTC received a similar load of crap by email:

I started reading and found my blood pressure starting to rise as I detest the bigoted, naive and simplistic viewpoint that is typical of socialism/marxism/whatever or from anyone of a left-wing bent. It’s pointless trying to explain the holes. Socialism - the race to the bottom, the champion of mediocrity, the stifling of enterprise.

And just for the record, my wife and I grafted all our working lives. Neither of us had a silver spoon in our mouths or a rich daddy. What we’ve got is down to our own hard work. So if we can do, why can’t the feckless and the idle ? We like where we live but on limited income. So why force us to sell our home to pay some land tax? Why should we defer it until the house is sold ? I’ll tell you why.

Not because we want our children to inherit because we decided long ago that much of the ills in our society (and the world for that matter) is down to too many people.

Not because we want to keep our money to pay for care as neither of us intends to get to that state of decrepitude and be an eternal drain on the NHS. We’ll find a way to depart this earth somehow.

But because we have researched carefully and are leaving our estate to selected charities. I’m damned if any of that money should go towards yet another pointless, resource draining Govt ‘initiative’.

Please - don’t bother to reply.

Please - don’t send me any more socialist bile.

OK, so he'd like "everybody else" to pay extra tax to fund his landowner benefits, and he would like to gift the net present value of those benefits to "selected charities". That's called "spending other people's money".

Why does he think that other people are happy to pay for the "pointless, resource draining government initiative" of subsidising landowners?

Wednesday, 17 July 2019

Killer Arguments Against LVT, Not (464)

From Bristol Live, a fairly favourable write up about a local Green councillor's proposal to replace Council Tax with LVT.

He is top man and makes some good points:

As a result, said Mr Stevens, tenants will end up with more money in their pockets, which could improve the local economy as people visit shops more frequently. Describing the overall impact, Mr Stevens said: “The tenant is better off and the landowner is worse off and the shopkeeper is better off and the owner-occupier is about the same.”

Another advantage that LVT enjoys over council tax, according to Mr Stevens, is that it takes into account ‘unfair enrichment’ - which is when a property’s values are affected by state spending. An example, said Mr Stevens, was the establishment of Redland Green School in north Bristol.

“Local property values jumped because it meant you didn’t need to send your children to private school and that enrichment is caused by the state investment - but the taxpayer bears the cost and people living nearby get the benefit,” said the councillor. If LVT were implemented, public investment which raises the value of a site would end up benefiting the community through higher tax receipts, proponents of the tax argue.

In a further endorsement of LVT, Mr Stevens emphasised how easy it is to collect. He said: “Wealth tax is very easy to avoid, as has been proven in a number of countries, but land tax you can’t avoid because the land is here - you can’t tow the land offshore. So even if your company is offshore you still need to pay Land Value Tax.”

There's a rather bizarre KLN in the comments:

Stevens says that council tax is regressive and should be replaced by the 'progressive' LVT. Whilst it is true that council tax is regressive it is by no means clear that LVT is progressive, as half the population (those who own land) will pay all of the tax and tenants (council and private) will, by very definition, be exempt. Progressive taxation means everyone pays something (however small) towards services and facilities. It's an important principle.

That's pretty much the opposite of 'progressive' means!!

'Progressive', in a tax technical sense, simply means that people with more [of something] pay a higher rate of tax than people who have less [of that thing]. So income tax is 'progressive' (20% then 40% then 45%) and Employer's Employee's NIC is 'regressive' (12% then 2%). The ultimate in regressive taxes is a Poll Tax, which is what he is alluding to.

(Actually, LVT based on land values could be designed to be progressive or regressive (i.e. with higher rates or lower rates on land over a certain value). IMHO, a flat rate of LVT is best, but this would still be 'progressive' in the wider sense.)

The fact that only half the population would be legally liable to pay the tax (those who own all the land) makes it a 'progressive' tax in the wider sense.

Householders who own their home and garden could, under this system, end up paying three times the amount they are now paying in council tax.

Sure, if it were a £ for £ replacement for Council Tax and applied at a flat rate, the tiny minority own homes worth three times as much as the average will be paying three times as much as they did under Council Tax. And more than half of owner-occupiers will pay less. So what? Those are the rules and this is neither an argument against or in favour.

Tenants will still pay the tax of course, it is included in their rent. Their landlord will collect the rent, pass on the LVT element to the council and keep the rest.

It's also nice to see the "tenants won't pay anything" KLN, I'm sure if I scroll through the comments, there'll be the "landlords will just pass on the tax" KLN, which is equal and opposite bollocks.
And then there's the tired old classic:

And how do they intend to tax the estimated 25% of land in England and Wales which the Land Registry say isn't actually registered? Because if it's not registered, they won't know where to send the bill...

Which is ably batted away by...

Send it to the new owners after that 25% of land has been publicly auctioned.

Although the actual answer is a bit more mundane.

The mythical 25% of land that is not registered is mainly low value farmland (not worth taxing), 99% of which is registered on a separate list for for landowner subsidies (if it were worth taxing - easiest is just get rid of the subsidies and busk it from there).

99% of urban land (which is 99% of all land by value) is very much registered. And that's never been a problem for Business Rates or Council Tax, why is it suddenly a problem now?

If tenants'occupants don't want to pay, they just have to tell the council who and where their landlord/the owner is. That covers 99% of the 1% of cases where the owner of urban land and buildings is not registered. So only a handful of cases will fall through all these cracks and have to be auctioned off.

Tuesday, 16 July 2019

Fun with Extinction Rebellion

From the BBC:

But those involved with Extinction Rebellion say the future of the planet depends on it.

"We have left it so late that we have to step up in a semi-miraculous way to deal with this situation," said co-founder Gail Bradbrook.

However, the group doesn't say what the solutions to tackle climate change should be.

Instead, it wants the government to create a "citizens' assembly", made up of randomly selected people representing a cross-section of society. Its members would decide how to solve the climate crisis, with advice from experts.

But who's going to choose the 'experts'?

Monday, 15 July 2019

Amazon Prime Days

They spent a lot of money advertising their Prime Days, which appear to be 15 and 16 July.

15 and 16 clearly aren't prime numbers, so that's a bad start.

If you write the date and month the English way, 157 and 167 are prime numbers (hooray, the world makes sense again) but if you write them the American way as 715 and 716 they are clearly not prime (bugger).

There are plenty of consecutive prime dates using the English format in January, March, July, September and November (apart from "2" and "5", all prime numbers end in 1,3,7 or 9).

But the only pairs of consecutive dates which are prime using the American format, are:
2/29 (in a leap year) - 3/1;
3/31 - 4/1.
12/31 - 1/1.

(You can't have consecutive primes in any calendar month using American format because one of them will be even, so you are restricted to the last day of a month with 29 or 31 days, followed by the first day of next month.)

I couldn't find any consecutive dates which are both prime using English format and American format.

Just sayin'.

Sunday, 14 July 2019

Economic Myths: Miller & Modigliani Theorem

The first part of the original M&M Theorem makes perfect sense:

The Modigliani-Miller theorem (M&M) states that the market value of a company is calculated using its earning power and the risk of its underlying assets and is independent of the way it finances investments or distributes dividends.

There are three methods a firm can choose to finance: borrowing, spending profits (versus handing them out to shareholders in the form of dividends), and straight issuance of shares. While complicated, the theorem in its simplest form is based on the idea that with certain assumptions in place, there is no difference between a firm financing itself with debt or equity.

So far so good. If the value of the business is more than the outstanding debts, then the shares have value; if the debts exceed the value, then the shares are nigh worthless. The total value of debts + shares remains roughly the same. The value of the bonds can't exceed value of the business and the value of the shares can't go lower than zero.

If you aren't sure whether to buy shares or bonds in a company, the best strategy is to have a mix. For example Mike Ashley/Sports Direct spent £150 million on acquiring 30% of the shares in Debenhams. Unfortunately for him, the debts ballooned to far more than the value of the business, so the lenders took over the business and his shares were wiped out (a kind of debt for equity swap).

His better strategy would have been to spend less on shares and more on acquiring Debenhams debts pro rata (say 15% of each). If the business had done well, his shares go up in value and if it does badly, his shares are wiped out but he still ends up with 15% of the business in his capacity as lender.
What's nonsense is the related claim that the tax system encourages businesses to borrow money instead of issuing shares:

Third, the use of debt is less expensive than the use of equity because debt is generally subsidized by the state through the tax system –since debtors can deduct the interest payment associated with the use of debt. Therefore, the use of debt may reduce the firm´s cost of capital.

That's a generalisation across many countries' corporation tax systems, but whether it is true or not depends on the rates of tax applied to corporate profits (at corporate level) and dividend and interest income at shareholder/lender level.

(I started as a tax adviser in 1989 and had to advise clients on 'what is better for tax', the answer depended on the circumstances. I later did an accounting and finance degree, and the lecturer trotted out the M&M tax drivel and would simply not listen to reason and logic.)

IIRC and generalising a bit, Singapore and Hong Kong governments get so much money from land rent, land auctions, stamp duty and capital gains on land that they barely need to bother with taxing incomes. So companies pay 15% corporation tax and individuals pay 15% income tax. If an individual gets a dividend, it is treated as tax paid, so no further income tax due. If an individual receives interest income, it is taxed at 15% so it is as broad as it is long.
In the UK, we had a brief period in 2012 or thereabouts (before Osborne started messing things up again), when it simply did not make a difference for corporation tax/income tax (ignoring National Insurance, which clearly distorts things, the 45% additional rate and overseas stuff).

The rates were:
Corporation tax - 20%
Basic rate income tax - 20%
Higher rate income tax - 40%
Withholding tax on interest - 20%.

* If a basic rate taxpayer received a dividend, there was simply no more tax to pay (same as Singapore or HK) because the company had already paid 20%. (Ignore the bullshit with the 10% tax credit and the 10% nominal rate, it worked out at nil, unsurprisingly).
* If a basic rate taxpayer took a salary bonus, the employer took 20% income tax via PAYE and the employee had no more income tax to pay.
* If a basic rate taxpayer received an interest payment, the company paid over 20% withholding tax/income tax on a CT61 and the individual had no more tax to pay.

* If a higher rate taxpayer received a dividend, he had to pay 25% income tax on the dividend, so the overall rate was 40%. Remember - company earns £100, pays £20 corporation tax, pays £80 dividend, individual pays £20 income tax and nets £60. (Ignore the bullshit with the nominal 10% tax credit and the 32.5% nominal rate, it worked out at 25%).
* If a higher rate taxpayer took a salary bonus, the employer took 40% income tax via PAYE and the employee had no more tax to pay, net pay £60.
* If a higher rate taxpayer received an interest payment, the company paid over 20% withholding tax/income tax on a CT61 and the individual declared the gross amount and paid a further 20% of the gross amount, net interest £60.

Osborne and Hammond then busily messed up this state of affairs and now you have to do the three calculations each time to see 'what's best for tax'.
There are lots of other wrinkles...

* Pension funds can receive interest or rent truly tax-free, but receive dividend payments out of after-tax income. It would make more sense to tax all sources at a flat, lower rate, so that they get some refund of the corporation tax on dividends but pay some tax on interest and rental income.

* Some companies have large tax losses (R&D tax credits, Film Tax Credits etc) but have distributable commercial profits, so are advised to pay dividends so that shareholders get the (slightly) lower income tax rate that applies to dividends.

* Some companies don't have distributable commercial profits, so aren't allowed to pay dividends, but can still pay salary bonuses or interest.

In a perfect world, therefore, dividends, interest, rent and wages would be taxed exactly the same way i.e. there would simply be a flat withholding tax at the same rate on each when the company pays them out.

We used to do this for dividends (Advance Corporation Tax);
Banks used to withhold 20% income tax from deposit interest;
Non-banks still have to do it for interest payments (CT61s);
PAYE applies to wages;
CIS deductions apply to sub-contractors in the construction industry;
and tenants with non-resident landlords are supposed to, by default, pay 20% of the rent to HMRC and pay the landlord the balance of 80% (though most wriggle out of this).

You wouldn't even need to bother having special rules for foreigners and there would be no need to distinguish whether it's wages, rent, dividends, interest, sub-contractor payments etc. It could all be included on one return/reporting system and paid to HMRC in one payment. As a final flourish, dividends paid net of tax would be an allowable expense for corporation tax purposes.

Individuals who have to submit income tax returns (i.e. higher rate taxpayers) can then just enter all 'net of tax' payments in one box and pay the same tax rate on the lot, minus the credit for income tax withheld at source.

Here endeth.

Saturday, 13 July 2019

University Open Days

Funnily enough, we've been doing some of this, so interesting to see an article:-

"It's important to talk about the cost of going to open days," says Rachel, a sixth-former from Plymouth, in Devon, who is looking at university choices.

"Not everyone can afford to go out of their area. Train tickets are expensive and there's most likely accommodation as well."

This is peak season for university open days, when tens of thousands of teenagers and their families are criss-crossing the country viewing places where they might study.

A return trip by train from north to south can cost £200 or even £300. And even with railcard discounts, when there might be four or five universities to visit, the open-day season can soon become an unaffordable closed door.

"Can". Yeah. Plymouth to Manchester, maybe.

There is no charge to attend these events. But Rachel says the travel costs mean she has effectively ruled out universities in the North of England.

"I wouldn't want to apply to a city I hadn't been to before, in case I'd regret it," she says.

Why does someone from Plymouth need to study in the North of England? I'm not saying there aren't sometimes specific courses in certain places (like Southampton excels at marine biology), but I doubt most people in Plymouth can't find something close to what they want at Bristol, Exeter, Bath, Southampton, Cardiff, Reading, UCL, Imperial, Oxford, Cambridge, Birmingham and Warwick (plus all the ex-polys).

"It is unfair. We all know rail fares are phenomenal in this country, particularly if they're choosing to go at the last minute. Planning an open day in advance isn't always easy," she says."

Actually, rail fares aren't "phenomenal" in this country, unless you go to certain places at certain times. Mostly into London at peak hours. Travelling from Swindon to Cardiff is about £30-35 by train. Exeter is about £50, which I don't think is any more than most places in Europe.

It's usually left to parents to provide the money and organisation for their teenagers, so they can meet tutors, find out about applying for courses and check out the accommodation.

And when thousands of families are descending on a university town at the same time, the trains are not going to be cheap.

That's actually bollocks. None of the fares rise on university open days. Mostly because they're on Fridays and weekends when demand is lower on trains, anyway.

Sadie, from Hastings, in East Sussex, says her friends are working out which universities they can afford to reach.

She won't look any further north than Nottingham, which means ruling out places she might otherwise have considered, such as Newcastle and Durham.

Well, that seems like a good thing.

Sarah, from Plymouth, says she probably wouldn't go any further than London.

Which is a long sodding way from Plymouth and actually, an expensive train route. Birmingham is quicker and a similar price.

And if you think travel is expensive, wait until you find out how much more accommodation is in London.

Friday, 12 July 2019

Daily Mail On Top Form

No mucking about here, they included the value in the headline to save us the bother of scrolling through the article:

Tenant fights for life after being hit in the throat by hail of bullets in 'targeted attack' at £780,000 house owned by comedian Russell Kane

UPDATE: Thomas (in the comments) noticed that one of the neighbours complained that the valuation was too low, and it's been relisted at £1.2 million

Twisted PC Logic Of The Day

From the BBC:

A Republican candidate for Mississippi governor has refused to be interviewed by a female reporter unless she brings a male colleague with her.

Larrison Campbell, 40, said she had asked to shadow Robert Foster on a 15-hour "ride-a-long" on his campaign, but was denied because of her sex.

Ho hum, does he explain why..?

Mr Foster said he was acting out of precaution and he did not want to raise any suspicions about his marriage. "This is my truck, and in my truck we go by my rules," he said on CNN.

During the CNN interview with Ms Campbell and Mr Foster on Thursday, the 36-year-old gubernatorial candidate cited his religion and faith, arguing he had made a vow to his wife to not be alone with someone of the opposite sex.

"I don't trust the perception that the world puts on people when they see things and they don't ask a question, they don't look to find out the truth," he said, "Perception is a reality in this world, and I don't want to give anybody the opinion that I'm doing something that I should not be doing."

Mr Foster said following the #MeToo movement, "men are under attack all the time". "I'm not going to allow myself to be put in a situation with any female where they can make an accusation against me" without someone else in attendance, he said.

So he doesn't want to make his wife feel insecure and is worried about false claims. I think it's fair to infer that he fears he will be Led Into Temptation and or that he might end up with a Bunny Boiler. And that is the end of that. As the man says, his truck, his rules. And fifteen hours is a heck of a long time, quite unnecessarily long to conduct an interview. What next, a reporter asks whether she can camp out at his house for a weekend?

Here's the PC leap of logic:

"What you're saying here is that a woman is a sexual object first and a reporter second," Campbell told Mr Foster on Thursday.

No, that's exactly the opposite of what he said.

If he really "viewed women as sexual objects" he would have invited her along unaccompanied and tried it on. He wanted to have a neutral situation where they could both concentrate on the actual reporting/interview,.

Can Someone Tell Me the Truth About This?

Madeleine Grant, on High Streets, wrote this

Our business rates, levied on the rental value of the premises, penalise physical shops in favour of e-commerce and price many out of trading on the high street altogether. Charity shops are exempted from paying the majority of these fees, which explains their proliferation in recent years. Any relief here would be of great assistance to Britain’s ailing high street, as would a rethink of other ill-advised tax policies.

First of all, I don't see anything wrong with e-commerce not paying the same rates. They use cheap land that no-one is fighting over, so they pay cheap rates. They do their thing without scarce resources.

And yes, I know charity shops get some exemptions

But other than that, is any high street half empty because of business rates? What's the mechanism for setting them, because if I was a council, I'd rather get £100/yr of rates than £0/yr of rates. Having empty shops because you set rates too high would seem to be shooting yourself in the foot.