On Piketty, mathematical silliness, inherited wealth and mysterious entities

   0   0 Blog, Size of the Problem, Tax Wars, TJN

PikettyFrom the book everyone’s talking about, Thomas Piketty’s Capital in the 21st Century, a review by Paul Krugman in the New York Review of Books:

“Why does inherited wealth play as small a part in today’s public discourse as it does? Piketty suggests that the very size of inherited fortunes in a way makes them invisible: ‘Wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities.’ “

Quite so. And there’s nothing like offshore secrecy jurisdictions to wreath these assets in mystery. And people aren’t just imagining it; these assets genuinely are owned by surreal, mysterious entities, via offshore companies and trusts and their like.

We are currently in the process of reading the book. It has enormous implications for a wide, wide range of tax justice issues, and we’ll be writing plenty more about it. Piketty’s recommendations – more wealth taxation, international co-operation on tax, and more – are core tax justice campaign themes. And we also share his cynicism about the economics profession’s “childish passion for mathematics.”

If you haven’t read the review, take a look – or look at the growing multitude of other reviews that are out there. The book is, as Krugman says:

“a truly superb book. . . a book that will change both the way we think about society and the way we do economics.”

Updated: all this nicely fits with comments in a recent blog by US tax expert Linda Beale, entitled Does Lowering Corporate Tax Rates Create Jobs? Answer is a resounding “no”.

“Folks, it is quite clear that there cannot be a sustainable good-for-all economy if productivity gains constantly drift upwards (redistribution from the many to the few) as they have been in this country for the last two decades while at the same time tax policies “reward” the elite with lower taxes (another form of redistribution from the many to the few).  One has to wonder just how tone-deaf Congress must be, to continue to listen to economists whose policies rest on mathematical silliness and the lobbyists for big corporations and their wealthy shareholders and managers.

It’s a post which is well worth reading. And on the mathematical silliness, a picture to consider.

Copyright 2014 Michael Goodwin. Illustrations by Dan E. Burr.

Copyright 2014 Michael Goodwin. Illustrations by Dan E. Burr.

 


Related Posts

New estimates reveal the extent of tax avoidance by multinationals

Price Waterhouse CoopersNew figures published today by the Tax Justice Network provide a country-level breakdown of the estimated tax losses to profit shifting by multinational companies. Applying a methodology developed by researchers at the International Monetary Fund to an improved dataset, the results indicate global losses of around $500 billion a year. The figures appear in a […]

READ MORE →

Banking Secrecy in China, its related territories and Taiwan

Hong Kong from Sky 100Foreword. The Tax Justice Network is a non partisan network of experts working towards transparency, so we do not take any position about countries’ territorial and political claims. However, we do expect countries with a de jure (legal) or de facto (in practice) influence over other territories, to take responsibility for their power. We point […]

READ MORE →

Is tax avoidance at the heart of Ireland’s economic miracle?

AIB International Finance Centre Dublin - By Estoy Aquí (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia CommonsComing out of the economic crisis Ireland was one of the best performing economies, with GDP growth rates of 8.5% in 2014 and an extraordinary 26.3% in 2015. But how much of this economic activity was real, and how much a fiction created by Ireland’s tax haven status? A new paper by Heike Joebges of the University […]

READ MORE →

New Report: HMRC’s “Building our Future” programme

bigben-mcbigbenfaceYesterday the Tax Justice Network was in the UK Parliament to launch a report it co-produced with the Public and Commercial Services Union. The report, entitled “HMRC, Building an Uncertain Future” is a study of HMRC’s (the UK tax authority) reform plans which it is calling “Building our Future”. The report published yesterday analysed the […]

READ MORE →

Financial secrecy in football: time for action

bigben-mcbigbenfaceEveryone has known for years that football is rotten to the core and financial secrecy is at the heart of the problem. Why then is no one doing anything about it? This post from the Offshore Game project originally features in the Independent. 

READ MORE →

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top