August 22, 2011

The future: tax the rich

Posted in Sunday Business Post · 125 comments ·

The captain of the universe, known as Captain Copycat, runs an investment fund called Copycat Partners LLP, registered in the IFSC but run out of a swanky office in St James in London.

He is having a taxing week.

Copycat Partners’ investment strategy is to copy what the next lad does and thus make money.

When the market is going up, Captain Copycat buys assets and rides the wave. Copycat’s behaviour obviously reinforces the upward market momentum.

In contrast, when the market is going down Captain Copycat sells everything aggressively, using simple gambling tools known as ‘put options’.

This in turn pushes the market down further.

For this carry-on, Captain Copycat pays himself very well. Why shouldn’t he? After all, he has been successful for some time. He is ‘short’ the European banks, but then again who isn’t?

If there’s truth in last week’s rumours that the Swiss National Bank borrowed dollars from the Federal Reserve in order to plug a hole in a large domestic bank, Captain Copycat figures that the next phase of the European banking crisis will be much closer to the core banks than to the Mickey Mouse outfits in Dublin or Athens.

After all, with the governments intent on bailing out the banks, it’s only a matter of time before the little guy – the taxpayer – comes to the rescue, and then the market will turn and he will start buying again.

Speaking of tax, Captain Copycat pays very little.

On Friday afternoon, from the comfort of his first-class seat on a Cathay Pacific flight, he feels reasonably comfortable as he heads out to see his Asian investors – even after a week like this.

He flicks through the movies, what will he watch before his lunch? Why should Captain Copycat worry? This is all playing out as it always does.

The crisis is nothing more than a re-run of previous ones.

The Fed will do the same; in fact this week the Fed announced it would keep rates as low as necessary. Obama won’t tax the rich, as the Republicans and the Tea Party are keeping him in check.

The Chinese still refuse to let their currency rise, which means that all the Chinese money is recycled out into the world economy, rather than in China.

Where do you think all the money for Copycat Partners comes from? As long as the Chinese keep this policy up, there will always be money for Captain Copycat.

As he sips his class of Bollinger, he muses that the world economy, and particularly the financial market liquidity, is a bit like a champagne pyramid, similar to the one he paid for in his tent at Royal Ascot.

The more champagne you pour in at the top, the more the stuff trickles down to the glasses below and because his fund, Copycat Partners, is like one of the glasses, as long as the Chinese are providing liquidity at the top, his glass will always be full.

As for the Europeans, Captain Copycat is a little bit more worried, because of their moves this week to resurrect a tax on financial flows in Europe. They couldn’t upset the apple cart, could they? This is the so-called Tobin tax (named after Nobel Laureate economist James Tobin).

According to the Financial Times, the volume of financial transactions in Europe in 2010 was 115 times the European Union’s €12,300 billion gross domestic product. This is Captain Copycat’s bread and butter. If the Europeans levied a tax at a rate of 0.05 per cent, then – even taking account of the reduction in trading activity that would follow the introduction of such a tax – the EU could raise €215 billion annually by taxing exchange-traded and over-the-counter transactions.

As he stretches out to snooze, this prospect niggles at Captain Copycat.

Surely the world will bring the Europeans to their senses and keep to Plan A, underwriting him and his class, keeping the liquidity pyramid flowing, giving any bill to the poor and allowing the market to rectify things?

Of course people like Captain Copycat should be taxed by the EU.I t should be clear that the ‘business as usual’ policy can’t go on. The French and Germans are right to put the Tobin tax back on the table, but they are wrong to stop there.

It should be clear to everyone now that the present global policy is not working.

There is Plenty of liquidity around the world, but this has not translated to spending or investment, because people are scared.

So the economies of the US, British and Germany are weakening.

While the Fed can go for a third bout of quantitative easing it won’t work, because the money is getting stuck in the banks and is only finding its way into the hands of the likes of Captain Copycat rather than real entrepreneurs.

Likewise in Europe, the ECB is keeping rates low, but activity is drying up.

The correct response to low growth is not austerity, because everyone (apart from the dingbats who believe the voodoo economics of the expansionary fiscal contraction) knows that austerity will make things worse.

The western world is facing a classic liquidity trap, where easy money is not translating to spending because we are faced with zombie households whose balance sheet is destroyed by too much debt and falling house prices. So, like it or not, the state has to lead the recovery by investing hugely in people and projects.

But the snag is that the markets are worried about default, so you can’t borrow more when the people you want to borrow from are worried that you won’t pay debt. So what do you do?

Well, we have got to raise tax and, whether you like it or not, raise taxes on the very rich. A Tobin tax on financial transactions might be the first step, and from there an increase in other taxes.

But don’t take my word for it; listen to what the world’s greatest investor, Warren Buffett, was saying during the week. Interviewed by Charlie Rose and writing in the New York Times, Buffett again called for the mega-rich like himself to be taxed more.

‘‘For those making more than $1 million — there were 236,883 of them in 2009 in the US – I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains.

And for those who make $10 million or more – there were 8,274 in 2009 – I would suggest an additional increase in rate.

I think it’s important that whatever is done restores to a degree people’s faith in the fact that their government can work,” he wrote.

Buffett – the poster boy for the likes of Captain Copycat – realises that a tax system has to be fair and moral. Otherwise you undermine government.

Unlike Captain Copycat, Buffett is wise. He knows that the mega-rich can’t hide. Change is coming and Buffett senses it as he has done for years.

It’s interesting that in the time of crisis in America, the mega-rich are showing leadership and solidarity by saying, ‘‘Tax me more’’, whereas in Ireland at a time of crisis, the mega-rich remain as tax exiles!

  1. Yipeee my daughter got her cao points for maths in UL today ……this is no longer a taxing matter for me .

  2. NeilW

    Only because you’re stuck in a fixed exchange rate or a fixed exchange rate mentality.

    Otherwise the extra policy space is obvious – the government needs to increase the deficit to purchase the real resources (primarily people) the private sector doesn’t want to engage.

    And it can do that by spending or cutting taxes.

    There is nothing wrong with the rich getting rich as long as the poor get richer too and narrow the income gap.

  3. Eireannach

    Whether or not there is to be a Tobin tax in the EU or not will depend on the core Europeans, not the peripherals like Enda Kenny or DMcW or any of the usual posters on this blogroll.

    We are like what Alaskans or Hawaiians or folks from Montana are in the USA – way out on the periphery looking in.

    The EU flag, the EU anthem, the EU parliament and the EU Commission are all becoming one European federal government apparatus.

    70% of Irish study French for the leaving cert, but almost nobody speaks French.

    Best start improving our French and Germans language skills. We live in the United States of Europe and I for one think it will be, on balance because there are pros and cons, a good thing.

    However, we will follow policy debates for the rest of our lives. We will never lead them.

    • Deco

      Even worse than that – France is a country that cannot produce jobs for it’s own young people – and definitely is in no position to provide them for other countries.

      France and Ireland both endure the legacy of the Richelieu authority culture.

      • Eireannach

        True Deco, France is very statist, setting up a company there is a total nightmare.

        Germany is no paradise for budding business startups either.

        My point refers to the longer arc of time. We are not going to be leaving the eurozone/EU at this point, so cross-border trade, intra-EU, intra-eurozone trade will increase now that no independent countries exist, just regional governing structures like the states in the US federation.

        This has profound implications regarding the vistas on the horizon for Irish people.

        70% of Irish secondary school pupils study French, but forget it afterwards because they can’t see how it is relevant to their lives. But anyone who speaks French can find a job in Ireland at the moment – check, etc if you don’t believe me. Becasue French companies and indeed French people are establishing themselves in Ireland in unprecedented numbers.

        That’s to say nothing of the Polish, Czech, Baltics, Roma, Italians, Spanish, Brazilians, Indians, Chinese.

        Ireland has changed into a different country from the one most of us visualize.

        We are a state in the EU federation, the USE, United States of Europe.

        This we not change for the remainder of our lives.

        Anyone who starts from this basic perceptual change will be able to adapt to this new reality. Because as Morgan Kelly brilliantly pointed out – “Look…the war is over”.

        We are going to be socially engineered into a core European country, however long it takes, however much we are dragged kicking and screaming.

        There is no Plan B, apart from Sinn Féin, and that’ll never, ever happen.

        So plan A involves a perceptual shift to the United States of Europe, with Ireland a peripheral, formerly independent nation painfully mutating into a core European state, joining the already federated part known as “core Europe”.

        This process began when our road signage was converted into kilometres and our motorway signs are blue, etc. as is standard core European practice.

        The growing businesses in Ireland are those which are adapting to a core European future for Ireland. Cowboy bankers, developers, builders will be a dying species from a dying ecological system. The new system will be characterized by ecological succession.

        The rising species is “EuroIrish” man and woman. The future belongs to them.

        • Deco

          Actually, I think that Irish students are forced to learn French and Irish – both for cultural reasons.

          Now learning Irish, might make some sense.

          But learning French at such an overwhelming level – is this a good idea ? Are we trying too hard, to accomodate a country’s illusions of it’s own cultural importance, when it is has been on the slide in many dimensions of it’s performance, since the late 1970s ?

          What do we get in return for such reverence to Paris – the anglo bondholder bailout and dictats about what we must do to fit in, with respect to the EU from a country that kicks up stink every time it does not get it’s way…

          • Eireannach

            Are we going to be living in a Eurozone/EU country with 70 million French speakers?

            Can you get a job interview in Ireland TODAY, with a start NEXT MONDAY, if you speak French?

            Yes and yes.

            This is not about puffing up French egos. It’s about the numbers, the statistics, the empirical facts. Forget about cultural baggage and old-school nationalist rivalries.

            There are 70 million speakers of this language just across the sea on ‘the mainland’, in France, Belgium and Switzerland.

            It is naive in the extreme to think that we should just focus on science and engineering and not worry about learning French or German or whatever because ‘they speak English anyway’.

            THAT’S the arrogant language group who thinks like that. The Anglophones.

            Again, to labour the point, a French speaker will get a job tomorrow in Ireland.

          • Deco

            How many people learn French at second level and ever use it again, outside of the odd vacation ?

            How many regret not learning German, Spanish, Mandarin, or another language that represents serious economic activity in the world. Chances of this are greater.

            There ar emore efficient ways to spend time in education. Learning maths is one of them. Do the Koreans take time out to learn French ? Is it the procedure in Singapore. No, they learn the stuff that will help them win.

            The Francophone world is not creating jobs. Maybe in the Geneva area of Switzerland. That is why French people do to London, the US, and Ireland looking for work.

          • Colin

            Deco, it came in handy when chasing the French chicks here learning English during summer months. Tis the language of love too, or so they say.

          • Eireannach

            For goodness sake Deco – do the Koreans learn French?

            WFT? They don’t live a few hours ferry from 70 million French speakers!!

            Globalization has gone to your head. We live in North West Europe.

            What is the next foreign language group, after English?

          • adamabyss

            I speak Hungarian, any jobs going for that?

            Serious question, as I have not been here long and have not checked out the jobs market much as I came back and went straight to university.

        • Deco

          The future – EuroTrash.

          Dude, where’s my bailout.

          The moral decline of a civilization, brought about by the imagination of the power-crats who declared…”why not”

          Preceding every disaster….. “why not” in knots over “why not”.

          Why not give welfare to bankers ?

          Why not borrow endlessly ?

          Why not print more ?

          Those who declare that the emperor has no clothes – those stupid people…those ignorant people….those unsophisticated types….they are the enemy.

          Making the world save for G-Sucks to keep on sucking.

        • Juanjo R


          “Obama won’t tax the rich, as the Republicans and the Tea Party are keeping him in check.”

          It seems like you are asserting that the republicans in general ( and the tea party in particular ) have scared the democrats off increasing taxes. This simply hasn’t any factual basis.

          The democratic party has never increased taxes or even talked about it – not it’s presidents nor its contenders – and that includes Obama, Bill and Hillary and goes back as far as Ford and therefore even precedes the Regan neo-liberal period.

          Increases in taxes are as unpalatable to them as to the Republicans simply because the biggest financial contributors to polictical campaigns are the rich not the poor. They won’t get even close to being elected if they so much as mention a tax increase hurting the rich.

          Obama is as guilty of this as any other US president – red or blue.

    • BrianC

      This is not meant to offend you. But I was once told by a French person that the only problem with France was ‘there are too many French in it’ so the enterprising spirit is seriously challenged. Yes he said French is the diplomatic language but English is the commercial language and it is the money that counts.

      Anyway I would love to learn French but sadly I am no good at languages.

      • Eireannach


        France is not a has-been country. It’s not going away. It’s still the geographically largest country in Western Europe, with over 60 million inhabitants. There are giant companies in France setting up in dirt-cheap commercial officeblocks in Dublin, and elsewhere in Ireland.

        Once Ireland is affordable, expect more French companies to be based here.

        France produces 80% of its electricity from nuclear. It has a world class rail, health and education system. It has problems, like everywhere in Europe.

        What I simply find appaling though is this Irish bar-stool philiosophy after a few pints that ‘France is finished’ or ‘France is a sore loser to the UK in the race for Empire’ or ‘the French language will never achieve what Napoleon hoped’.

        I’m just saying that this year 59% of leaving cert students did French.
        15% did German. An appaling, shocking 0.5% sat Italian exams (!).

        WTF is going on in this country? Do we still think it’s the cold war and America runs our affairs in Western Europe. Have we no idea that as Europe is economically integrating, so we must adapt accordingly and see European language competence as an important part of our education?

        Ireland and the UK are in danger of becoming insular backwaters in NW Europe.

        Insular from the Latin “insula” meaning “Island”. As in island mentality!

      • Deco

        France is about to lose it’s triple AAA rating.

        It’s banking system volunteers itself to loan to the biggest wasters in Europe – Greek state bonds, Irish bank bonds, subprime bonds, etc..

        France is heavily reliant on the CAP for national income.

        You lecture concerning insularity is illogical meandering. Of course it sounds par for the course. Unless you somehow or other view criticism of France a sign of insufficient sophistication. Fine, count me as unsophisticated, and insular, if you wish. I would rather be able to see things as they are. And with respect to France, there is a lot of myths that can very easily come crashing down. And the biggest myth of all concerns the French economy. It is on life support with EU CAP transfers for the farmers, EU bailouts for it’s banks, and a reluctance of the EU competition authority to investigate it’s internal market. And most likely it probably still refuses to allow the Polish plumber offer his services to the public in France. Well, there must be a word somewhere that describes all of this…oh but I am not sophisticated enough to say it.

        The good news for France is that the Irish taxpayer is doing their very best, and is fully committed to paying up for the failed gambling of private sector French Financial institutions and banks.

        And as a bonus for France, that muppet Brian Cowen fully committed Ireland to borrowing money (from the IMF – who else) to bail out the French banks who gambled blindly by giving money to the Greek state.

        We are all doing our bit for France. And we sure look sophisticated, just like a Parisian Poodle after a fresh coat of shampoo.

        The only thing that concerns me is this – will we ever escape the Richelieu model of authority in this country ? Probably not.

        • Eireannach

          No Deco you’re not unspohisticated, but you are insular.

          Because if you’re NOT insular, you’ll understand this sentence in the language that I’ll bet YOU studied for 4 or 5 years in school.

          Je constate que tu as une mentalité insulaire parce que tu n’est même pas en mesure de comprendre une phase comme celle-ci, malgré le fait que c’est la langue de nos voisins outre manche.

      • Deco

        The French banks did not gamble their deposits on their home property markets. Oh no – that would be terribly Anglo-Saxon. Sacre-Blue.

        Instead they gave their billions to the Spanish mortgage providers, and the likes of Anglo and INBS.

        That way they could finance other countries to go have Californian style housing expansions.

        And for diversification, they invested in subprime bonds.

        And for further diversification they invested in Greek national bonds.

        Anyway, thanks to the EU – they will get their money back. Socialist consequences for capitalist failure. Dude, where’s my bailout ?

        • Eireannach

          I don’t give two hoots about ‘economics’.

          I’m not and have not been talking about poxy ‘economics’.

          This is about moving beyond a monoglut island mentality.

          We can put our road signs in Kilometres, why not speak a continental language?

          Both signs of getting closer to Europe, right?

          • Deco

            Of course.
            The whole point of this blog is economics.
            Why should let poxy economics bother you ?
            If you do not wish to discuss economics, then I will leave you to it.

          • Eireannach

            You are about 5 or 6 regular contibutors talking the same shite week in week out without thinking outside of your hamster wheel.

            Indeed I will leave you to it.

          • Colin


            Why do you keep coming back if you think we’re talking ‘shit’? Deco, is right, its an Economics blog, and the author is a free market economist and capitalist. There may well be a cohort of 5 or 6 regular contributors, and about 20 less regular contributors, but every article is different and shines a light on different aspects of our economic lives. These articles bring out nuggets of knowledge and experiences which when shared enrich the knowledge of others. More regular posters are always welcome.

            We post in English, and there’s a good reason for that.

          • Eireannach


            I will serenely predict that in the course of the next year, despite the vital importance of the economy and to understanding of the dynamics of the economy to our lives in Ireland at this time, there will be few if any new contributors to the discussions on this blog.

            There hasn’t been many new names in the past year or so.

            I think I know why.

            I shall now bow out, and talk to people who know what Europe is, beyond insular parochial stereotypes like “sacré bleu Sarko!” or “thrift housewife Merkel”.

            Ich wünsche Ihnen allen Erfolg in der Zukunft.

          • Malcolm McClure

            Adieu, Eirennach, and thanks for your contributions.

            I suggested a while ago that this is not an economics crisis but an existential crisis, but no-one rose to the challenge of “Think different”.

            Language and the precise use thereof is the key to understanding. There is far too much talk here about ponzi schemes, gold-plated pensions and assorted begrudgery. Soak the rich is a nice populist idea but like its quarry, Captain Copycat, it leads nowhere. The internet provides a public forum for fresh ideas about the kind of social organization that would replace the existing one, but outlines are few and far between and details are even scarcer. If we miss this opportunity to introduce positive change, there may not be another on this century.

            We don’t need foreign languages to discuss ideas here. We just need experience of life and rational thought.

    • Juanjo R


      Why would the said 59 or 70% of us want or need to use French even if we have studied it?

      English is the business language why bother with French?

      And if Germany is export orientated why should we focus on it.

      100% of us learn Irish and virtually nobody can speak it – and even when we can we certainly cannot speak it like a genuine first language native could. It is a huge waste of time and effort. Change that.

      The top ten 1st languages of the world are the following ones ( this isn’t accurate I can see mistakes but it will do as a guide ). French dosen’t figure.

      1. Mandarin Chinese – 882 million
      2. Spanish – 325 million
      3. English – 312-380 million
      4. Arabic – 206-422 million
      5. Hindi – 181 million
      6. Portuguese – 178 million
      7. Bengali – 173 million
      8. Russian – 146 million
      9. Japanese – 128 million
      10. German – 96 million

      Given Portuguese and Spanish are close to interchangeable they actually form a significant language block of half a billion speakers (in adjacent countries) in themselves, I would feel.

      Why should we be euro-centric and focus on France/Germany?

      Case of a biased pro-French viewpoint there Eireannach?

      • Eireannach

        In the 1990s, when I went to school, 70% did French. Now, in 2011, 59% of school leavers sat French in their leaving cert.

        The reason I say French is because so many have already studied it for 5 years in school.

        Aoart from that, I have no bias. If people speak German or Mandarin or whatever, fantastic. But we’ll be waiting, won’t we? If they cant string a sentence together in the language of our giant neighbour across the Irish Sea.

  4. Deco

    Well, as efforts to get Bono, the Malteser, the Three Amigos, and our Consul of Monaco have proven….

    It is not a simple matter by any manner of means.

    Of course bailing out the rich and then taxing them is kind of absurd.

    It would be much simpler, and much less corrupting to bail them out in the first place !!! But that is not an option. We are living in the aftermath of the Gordon Brown doctrine. “….we saved the world” (but murdered the taxpayers for a generation). Every Western government avoided the Icelandic route (the said former Brit PM even added Iceland to the axis of evil in regards to funds on the London SE), and pronounced greater sophistication than the Thais, the Koreans and the Malaysians. The Asian tigers are back. The elderly spoiled brats running the west seem to dig a hole ever deeper for everybody.

    Show-bama might claim to tax the rich, but his administration is loaded with Wall Street executives in a manner that would be an embarrassment to Bush and his Houston chums, or Slick Willy and his mates in Arkansas. Well, I suppose Finance is just that bit better at organizing a corporate takeover than big oil, or big retail. It is all optics.

    As regards Warren Buffet – I have a theory – call it Peak Buffet. Buffet is going to war with the TEA movement in the US, and has declared that US debt should get a quadruple A rating in response to their campaigning on the issue of debt. Buffet also finds himself on the opposite side of Bernie Madoff. Unlike the Irish Madoff profession, it seems that Madoff has developed a penchant for speaking bluntly and has dropped the veneer that defined his professional career. Madoff made the comment that the entire US Debt system, including Bernanke at the Fed, is a ponzi scheme.

    A frightening thought that. For the TEA Party this is an endorsement of their perspective on US spending, from the man who deserves an honoury Doctorate from any Irish university that might be looking for media attention, based on his outstanding comprehension of Ponzi-schemes. If Bertie Ahern can lecture on mediation, surely Madoff could tell us what a ponzi scheme is ? (though Madoff at least has found remorse and guilt). The problem is not that of reputation, but that of knowledge. Buffet has reputation. Madoff has no reputation at all. Madoff knows what a ponzi scheme is. Buffet, on a victory lap, might now be prone to find a banana skin that he avoided all his life. Buffet might be loved by the media, and Madoff might be loathed – but I get an overwhelming sense that Madoff knows more than him. Madoff spent a lifetime on Wall Street, and crooked as good as any of the rest of them.

    Intellectually, the West is going down a cul de sac. The biggest problem of all seems to be the enthusiasm for confusing cause and effect. Something that Madoff, (and the Irish Madoffs) sussed a long time ago. I therefore find it fascinating to see the calibre of individual who trusted the Irish Madoffs.

    For New York only produce one Madoff (as far as we are currently informed). Dublin South East produced at least four.

    And on the subject of tax – one of the Irish Madoffs started off working in the Revenue Commisioners. Intellectualy, we are bunched. And the outlook is bad, getting worse.

  5. fbuckley

    Think that article is timely and needs to be followed up with other eminent economic authorities. Only then, when governments see there’s a momentum for the rich paying their way, will we be able to progress any debt restructuring. Right now, the political authorities are stuck in idealogical mode (banks cannot fail, austerity is the only course etc etc) and are following a policy line that the blind man can see is going to end in ruin …..after a succession of crises.

    We have to end what I recall David quoting sometime ago where “we privatise gains and publicise losses”, that is real moral hazard. Beggar my neighbour is not going to work. The German/French banks that fuelled the Anglo/AIB recklessness must divvy up to the solution. Sure, that probably wrecks my pension ultimately but the prospect of my neighbour suffering does not gratify me in any way.

    If we are a union of European states then, Eurobonds must also be part of the solution. Sure, the Germans won’t like it when they see we are getting away with profligacy and pure stupidity but do you banish your brother/sist because they were stupid. If stupidity was a crime, I suspect the world would be fully populated with criminals !!

  6. Deco

    Finland, The Netherlands and Austria have expressed severe reservations about the Greek Bailout. They want collateral. According to Modern EU bailout theory, taxpayers are not entitled to collateral – only banks are entitled to collateral.

    This is an embarrassment for Merkel. The solution for the banks, would be if the media were to undermine their efforts. Either such an initiative is shoved through – or else the deal is off.

    Time for the media to rescue the banks (again) – by making sure that the taxpayers rescue the banks.

    Hey, Mr. Madoff – is the EU a ponzi – scheme ?

  7. Praetorian

    Thanks for article, some interesting things to think over, adds a further dimension to the fraud at the top, and the disgrace that is politicians telling the poorest of the poor in the respective societies that they have to take the pain and not those who have created this unholy mess.

    Critical sentence: “Europeans levied a tax at a rate of 0.05 per cent, then — even taking account of the reduction in trading activity that would follow the introduction of such a tax — the EU could raise €215 billion annually by taxing exchange-traded and over-the-counter transactions.”

    While Sarkozy focused on the myopic issue of the Irish corporation tax rate, he chose to ignore the log in the eyes of the European elite. Raising €215 billion annually and putting that money aside to deal directly with the debt crisis created in large part by ludicrous bank practices would go a long way to easing the pressure on European citizens (if it had been introduced in 2008 there would be nice emergency reserve to be divided up equally among struggling economies, which in the end would benefir everyone, get consumption going, reduce unemployment, emerge faster from the recession, certainly hold back a double dip).

    The fact this was not done and won’t be done but instead governments opted for austerity tells you all you need to know about how the European ‘Union’ is run. This article should be mailed to all those European cheerleaders in Irish society who championed the Lisbon Treaty mark II and asked why the EU opted to make €9 billion in pure profit at the worst possible time in the country’s short history as an independent Republic.

    • fbuckley

      This international Tobin tax would have to be coupled with a determination to outlaw these parasitic tax havens a la Seychelles, Monaco etc if they don’t play ball. Otherwise, this tax would only represent a serious lift for those parasites. Ostracise them altogether if they don’t play ball with a global finance tax. I presume the IFSC would comply !!

      An incidental benefit would be that there would be greater transparency about global funds movements (who is doing what) that may alleviate some of the volatility we’ve had over the last 3 years.

  8. miec

    Excellent article and I hope that the rich will get taxed. I agree that Buffet is wise but only because the current economic crisis is squeezing out the middle class, aka, the paying and taxing class. Without consumers and tax payers economies can no longer function. As it stands there are super rich and super poor and more and more of us are joining the super poor. The wealth has to be distributed more fairly. Oh and a great novel that epitimoses the individual in CopyCat Partners is ‘A week in December’ by Sebastian Faulks.

    • Praetorian

      Robert Reich made an interesting point on Channel 4 news recently, the US economy is heavily dependant on consumption (70% was the figure I heard mentioned), because working salaries have been in decline or stagnating since the 1970s, easy access to credit tended to make up for the shortfall, which consequently created one of the most debt ridden societies on the face of the planet, including the government with its $14 trillion deficit.

      Now with the recession, the drying up of credit to consumers and money supply that kept small businesses going, rise in unemployment and bills that can’t be paid, consumption has fallen off the cliff and the vicious cycle continues. You are right about the middle class being annihilated, corporations can’t sell to the domestic market and are feeling the pinch, the CEO of Starbucks showed up on CNN pleading with American politicians to drop the ideology and put their house in order, interesting that the US politically has moved so far to the right that it is beginning to pinch corporations especially those that traditionally aimed at the middle class market, so there are limits to how Republicans and the Tea party can take it, whether people on the extreme right of understand this is another story, they seem hell bent on driving the US further into the ground in the ‘interests of saving it’.

      Obama must be laughing his head off at the candidates lining up to challenge him, as one poster commented, it has become so absurd that Sarah Palin has been forgotten about. Like Rome, a few bad leaders more and the US is going to find itself in a hell of a position wondering where it all went horribly wrong.

      • Deco

        the US economy is heavily dependant on consumption..

        because of declining economic production since the NAFTA deal, and possibly further back,

        because of the FIRE economy,

        because of the crowding effect in real estate speculation, which was fed by the Fed,

        because the US refused to scale back military expenditure, and drop the overseas bases, and campaigns after the Russians pulled the troops out of Eastern Europe.

      • Deco

        Since JFK, the empire has been led by one stooge or another, who failed to arrest the empire’s decline.

        • dwalsh

          JFK RIP.
          The last American president.

          It’s been Wall St. presidents ever since.

          • Deco

            Yes. Puppets. Eisenhower warned the people (and he sure knew). The entire episode of JFK shot by a lone assassin who was shot before he got to say anything publicly except “I am the patsy” was a warning.

            But the people let the TV networks do their thinking for them.

            The moral of the story “support our advertising sponsors” is a prelude to disaster.

        • Praetorian

          People may need to look more closely at the JFK presidency, it wasn’t all sweetness and light, the Irish in particular have been blinded and for obvious reasons. We were lucky as a species that it wasn’t the last of everything let alone a presidency, missed nuclear war by a hair’s breath as Robert McNamara outlined in ‘The Fog of War’ while the escalation in Vietnam had appalling consequences.

          In Cuba, McNamara focuses on the deceit of the Soviets for placing missiles in Cuba, but why they did they do so? Because they were invited to by the Cubans. Why did the Cubans do that? Because they were under severe covert military and economic pressure from the US and felt they had little to lose. Respected commentators correctly draw the line between that pressure and the events that almost led to all out nuclear war. Risky stuff from the ‘cold war warrior’ JFK who wore history a little too heavily and just about got himself out of a very tight corner.

          Fog of War

  9. Scruffy

    We should all pay 5 basis points on every transaction our pension fund enters into. That doesn’t sound like taxing the rich.

  10. Falls

    good lord its come to this. So we are presented with an appalling character that we mentally transfer to all wealthy, that somehow they dont deserve it and we need to take it. Let me ask you this mr williams, 236,883 earning more than 1 million in the US: how much will that bring into a US treasury that borrowed 14 trillion (and soon to be 16 trillion) and with over 100 trillion in unfunded liabilities? so rather then build our way out, we are now blaming and encouraging envy and resentment. We are now reduced to class warfare to feed the masses virtual food. we are presented with this magical 215 billion in taxes to pay for our sins. wow, let me ask this: when has a tax EVER brought in anything like it is supposed to? here is the thing about the rich…they move. here is another: in all my time working in ireland, i never got a job from someone poor. do you seriously think they will just sit there and take it, no they wont, they will do it elsewhere and you get zip. next question: when has a government ever done with less? so you think they tax will stop at people who are mega rich? please tell me you are not that naive. I see the first reply was about could not ask for a better example. He moved to holland for better tax rates, who do you think the other mega rich wont? when they move who do you think the next taxable target will be? let me give you the answer…its you. of course you wont have the benefit of the rich’s ability to move as easily which is why all these super duper taxes on the uber wealthy will simply move to you when they dont bring in anywhere near the amount they expect. as for warren ‘i voted for obama’ buffet, of course he wants more taxes, because he knows its a disaster and he needs to feed the wolves and anyways he will get an exception from the obama administration. he is also was very vocal on support of obama just like his counterpart soros. you have a president now so bereft of ideas that even after spending and QE’ing his way to trillions upon trillions he is still banging on about shovel ready jobs when he said they dont exist. he is so out of ideas, he is on holiday during the biggest crisis in the markets since the great depression. a more perfect example of failed president and a failed theory you could not ask for.

    I notice you also say the money is not finding it way to real entrepreneurs, would that be the future uber wealthy you want to tax to death now or in the near future? sorry a real entrepreneur will not set up business that has so many laws restricting them and so many bills from government. they will move or worse they will take your money to setup and them move.

    let me ask this, why is the disgusting individual mentioned in the story registered in the IFSC? Wow, who exactly wanted that? who benefited and why did he come here? would it be perhaps a reduced tax rate perhaps and could we maybe give that to all irish companies? so we ask them to come to the IFSC and now somehow they are responsible for failed government policies? we need to remind ourselves why we are here and not look for a convenient scapegoat and encourage something as outrageous as class warfare as a viable solution. we are here because of govt policies. we are here because our govt taxed new houses and borrowed via proxy from the international markets. you borrowed ,they taxed and paid for failed social programmes we can no longer afford that were nothing more than vote getters. they supported a cartel in banking and building. we all fell for the ponzi scheme. lets not forget, a lot of the people who got suckered into the housing bubble were there for money, buy at X and sell for X+100%. are they any different then the character in the story? are they less or more morally bankrupt or is it since they failed they can now target someone else to pay? dont misunderstand me, the repugnant character in the story exists, nothing i would like more that to see him in economy class like the rest of us, but he is a minority, in fact a super minority and creating laws for cases like him make for really bad laws. surely we have learned that much out of the crisis so far?

    • Eireannach

      That was inarticulate gibberish.

    • Eireannach

      I’ll give you this, though – you’re right that ordinary Irish people just want short-term profit as much as our jet-setter character in the DMcW’s story.

      DMcW and Fintan O’Toole never point out the basic myopic greed of the Irish man and woman on the street.

      Therefore, when they complain about evil elites, whilst assuming the sun shines out the arse of the doo-gooder masses of ordinary people, you know you’re dealing with a populism that lacks total integrity.

      But we’ll get nowhere if we say everyone is a greedy evil profiteer. Perhaps in Ireland we know most people were greedy short-term profiteers, which is why we haven’t had a principled response to our crisis. Not yet, anyway.

      • Deco

        I reckon the elite are greedy.

        The ordinary man on the street is not always overwhelmed with greed – he is trying to survive in a culture where it is everywhere beneath the surface.

        As exhibit A – the Malteser – always on hand for charity bashes, and not paying tax here. “Fly to Malta-you only pay taxes”.

        Exhibit B, B for Bono. Ditto. Tintin never castigates Bono for his position with regard to being “tax efficient”, while hypcritically instructing the politicians on what to do with the tax revenues collected from the rest of the population.

        And you could continue to z. I think you get the picture.

        I would not fault the ordinary man in the street.

        Everybody knows the deck is stacked.
        Everybody knows the game is rigged.
        And everybody knows that the man in the street is always the unfortunate sod who gets stuck with the bill for the serial incompetence in big government and big corporations.

        The ordinary man in the street is only trying to survive. And he is bombarded continually with propaganda, telling him to live life to the power of Guinness. And he never gets time to think that maybe he might have a better life without subsidizing Ireland’s biggest advertising budget multinational. Buy this, lease that.

      • Looting at the top guarantees looting at the bottom.

        We mimic what we see.

    • Colin

      Lets force all the billionaire tax exiles to relocate to Bermuda and then get the USA or UN invade Bermuda and carpet bomb everything, making Dresden look like nothing more than a bonfire gone out of control a little bit. Problem solved.

    • Deco

      Falls. Welcome.

      Concerning the tax diaspora – let them move. Bono got far more out of Ireland than Ireland ever got out of Bono. It he wants a passport, let him pay his taxes here like the rest of us.

      Incidentally being rich, and able to avoid taxes does not reduce Bono’s level of airplay in the US – even though American artists have to fear this if they are not supportive of the US IRS.

  11. John Q. Public

    what a load of bull. How many rich people in the US want to be taxed more? I hope Michael O’Leary does move abroad if they raise taxes, good for him. Politicians should listen to expert economists (not insiders) and get on with it.

    • Deco

      Tax the rich.

      So that the rich will get bailed out.

      ….would it not be easier to not bail out the rich in the first place ?

      …ah….but the problem there is….our politicians have to always be seen to be doing something.

      Given the results that we see everytime the politicians decide that they have to be seen to be “doing something”…it might be better if they did nothing…..

  12. wills


    Brilliant. So, the economy is now rigged up to reward the unproductive side and punish the productive side.

    As Adam Smith said, two merchants at the bar will conspire. Hence the need for proper government regulation.

    Today the government no loner functions for the merits of a productive economy. And, a conspiracy of gigantic proportions reigns.

    Criminal banking mafia system sucking in the wealth out of the pockets of the regular working man reducing the majority into a feudal high tech idiotocracy servicing the profits of the corpocracy.

    • And now they will loot Libya’s Gold :-(

      • Deco

        Libya’s gold.

        The problem with Gadaffi – he was busily accumulating gold reserves. Selling USD and EUR and buying gold.

        And even worse than that, he was relocating the gold in Libya.

        Whatever you say about the Gadaffi chap – he was very good at looking after his subjects material interests. Or at least those that were loyal. He would send bright students to Europe to study Engineering so that they could come home and help in his infrastruture plans. A tinpot dictator, with a few to keeping the people on the Arab street happy, and provided for.

        Maybe Hugo Chavez will be next. Chavez wants Venezuela’s gold in Venezuela. And no doubt, he will shortly nationalize gold production in Venezuela.

        Will there be a “spontaneous” “movement for democracy” in Venuezuela – well, a version of democracy that is preferable to “our advertising sponsors” to the current version ? Will there be protests ? Will Hillary Clinton denounce the “heavy handed approach” of Chavez ?

        It is kind of predicable really.

        Saddam had to be deposed to “introduce democracy”. Gadaffi also. The Iranians want a basket of currencies. They were on the axis of evil.

        And now Chavez. Chavez should know that he is now crossing the line, on acceptable and unacceptable behaviour with regard to currency, when he opts for anything other than Bernanke paper. If the world is to be safe for G-Sucks, then he better bow to the yanqui dollar. Otherwise there will be pressure for “more democracy”….

        In Europe, we love democracy so much, that we keep voting repeatedly, until we deliver the “right” result….In the US they love democracy so much, they spend two years preparing for the Presidential election – and then a stooge is elected.

  13. uchrisn

    Their should certainly be more taxes raised from finance/banks to pay for their role in the crisis and so the tobin tax is a step in the right direction. Norway and Sweden tax much more than us, up to 70% highest rate. I would support those kind of taxes. Abba left Sweden cause of that, the country didn’t diassapear.

    Europe should have an FDIC insurance system like the States where banks pay into a common fund which then goes to refund depositors of bankrupt banks.

    As we can see from the link above the Fed can just print trillions of dollars and throw it around. The Chinese spent years building up their 2 trillion foreign reserves in US dollars through slave labor. Then the Fed just prints off a trillion.
    The point is that US dollars are the property of the Fed says it right there on the notes. They can do what they like. This is a hidden tax cause your dollars are worth less.

  14. goonermayo

    In the article David quote’s from in relation to Warren Buffet, Mr. Buffet laments the fact that he pays less tax as a percentage of his income than lesser paid employees of his company. He then says he should be taxed more because he can afford to pay more.

    Why does he have to wait to be taxed more? When he is completing his tax return he can always increase the tax figure he wishes to pay. If he feels that strongly about this issue why wait to be compelled to pay more tax, just go ahead and do it. Very easy for Warren Buffet to say that the rich should pay more tax and appear altruistic when there is no chance of it happening.

    If higher taxes for the wealthy are introduced it will be interesting to see how many of these individuals will roll over and accept it.

    • Deco

      Fair point.

      If Mr. Buffet believes he should be taxed more, then why does he not go for the moral high ground and fill out his tax return, and over write the bit where the tax rate is listed, and write in a higher tax rate ?

      He could make a donation to the US Treasury.

      Of course the problem with that is that TimmyBoy will hand it over to his mates in Wall Street anyway….

  15. Praetorian

    Some interesting commentary in this, food for thought.

    Capitalism is the Crisis–2R0

  16. dwalsh

    This tax will legitimise Captain Copycat’s operations.

    Captain Copycat is a pirate; a buccaneer who uses leveraged virtual financial instruments – “simple gambling tools” as David calls them – to extract wealth from the real physical economy; the economy we all live in and depend upon for life and livelihood.

    These pirates have been permitted to set-up their dens in privileged tax havens like the IFSC and plunder the trade routes plied by real merchants and investors — those involved in the production and distribution of real commodities and services to the peoples of the world.

    They are not part of the legitimate physical economy or markets. They produce nothing useful to the world other than profits for Captain Copycat.

    Those profits are extracted, siphoned-off, from the real economy; ultimately from the pockets of each one of us.

    Their operations have grown exponentially in the past decades. They now dwarf the real markets. They hold our economies in an embrace of death. They are steadily sucking the wealth and the very life out of our nations.

    It is remarkable don’t you think that the notion of a miniscule sales tax on Captain Copycat is only now being considered. Legitimate merchants and citizens pay these kinds of taxes for every transaction. But up to this Captain Copycat has been exempt from them.


    Now that Captain Copycat has Europe almost on its knees, and our politicians are scrambling to raise more money to pay-off the mountains of debt Captain Copycat leaves in his wake, this idea that maybe Captain Copycat should pay some tax arises.

    Embarrassing really. Embarrassing for our political elite and awkward for Captain Copycat. Joe public might get wind of it and ask: why has Captain Copycat not been paying such taxes all along like everybody else?


    My bet is Captain Copycat will agree to allow our governments to levy a small transaction tax. Naturally it will be adjusted so as to minimise interference in Captain Copycat’s plundering operations; and of course his accountants will figure out how to claw back the little that it does costs him; i.e. we’ll probably end up paying it.

    So Captain Copycat will get some first-rate PR and cover for his piratical operations at a negligible cost. He would be a fool not to make the deal.

    This tax will legitimise Captain Copycat’s operations.

    Captain Copycat is a parasite not an investor.

    Don’t tax him; shut him down.

  17. Deco

    What are the long term economic consequences of the accumulation of unsustainable assumptions, a persistent intellectual decline, and the media driven dumbing down process, in the past decades, on Western society ?

    The author makes no effort to be popular.

    And now in Ireland, record numbers of students fail ordinary level maths (and in all likelihood the exams are easier than they were ten, fifteen years ago).

    • Deco,
      well put, calculators should be banned in schools.

      You should see the exams pre-1960s.

      • rebean

        You are correct people should be able to multiply and divide without a calculator. It was not unusual for people to be able to do large calculations in their heads years ago. However I have a more general observation. We have all these young people going to college to qualify in academic areas. There are few jobs at the end. We need to start manufacturing again in Ireland. There is no glamour of course in using ones hands anymore. The educational system in Ireland is big business . Hundreds even thousands of third level lecturers way overpaid teaching or trying to teach young people the finer academic pursuits.Many of these graduates will end up on the dole.An exception would be computing and medicine though one might have to emigrate.The only real opportunities I saw recently were jobs in Western Oz for welders and plant fitters in the mines.These people wont need calculators just a pioneering spirit and a chance of a life outside this economic basket case.

        • Deco

          I am concerned about FAS, and vocational training for those who do not go into third level. Plant fitters, and welders need to know their skills well – and I am concerned that this might not have been a priority in recent years in FAS.

          • rebean

            Apparently for the jobs in OZ you dont need your papers.
            I would say that if you had a year or so as a welder or fitter they would take you on. You can finish your trade out there by going to school part-time. The point I was making is that it seems like there are loads of people going to college and I dont think there will be jobs in the future for all these people. If you do 5 years in the mines and save your cash you could sit back

  18. Deco

    Strangely enough, a significant part of Irish GDP is based on Captain Copycat……Las Vegas on the Liffey and all of that…..


    If any economic activity is to be taxed, all economic activity should be taxed. The fact that there has not been a Tobin tax in existence for the last decade, while capital moved out of industry & into financial rackets, is proof that our politicians have been asleep at the wheel. There is no argument to be made against it regarding how much it will raise, the tax system must be fair & be seen to be fair, otherwise it falls into disrepute. Similarly, Tax Exile status should be abolished. The idea dates back to the end of the 1700′s and it is a concept who’s time has passed. Currently Irish Tax Exiles (ITE’s!?) can reside here for just over half the year, 183 midnights to be exact and anyway, who’s checking? Funnily, the spouses of the vast majority of Irish Tax Exiles choose to remain in Ireland.

  20. lff12

    Many years ago I wrote an email to Charlie McCreepy advocating the tobin tax. Oh and Trev Seargant, who wrote me a lovely email in response expressing support (shame what happened there).

    Some time afterwards I got an extraordinarily long email from one of McCreepys REAL decision makers castigating the tax and giving what to me seemed an extremely professional response to my exhortations.
    You must remember that the net rate proposed by proponents is TINY – 0.5% or less. Because of the scale of transactions this would turn in a huge amount. It is horrific to see such greed and avariciousness that refuses such a small share to be paid. Unsurprising also given McCreepys prosititution of the nation to the horsey industry, who to this day enjoy close to tax free status while the nation burns, and who still have the neck to see themselves as “victims.”

    I will dig this out and post it here later.

  21. adamabyss


  22. BrianC

    There is nothing wrong with Tax, it can have negative and positive consequences. It is a fruitless exercise to apply penal tax levies on wealth generators as they simply move their wealth to a more favourable tax regime.

    Whilst Michael O’Leary, abrasive in manner driven by the need to stimulate keep his company in the pblic eye, speaks a lot of sense. He has his finger on the markets pulse proven by the performance of Ryanair which is more to do with management than luck. Do we really want to tax him and his sort out of the country.

    However. tax can be applied in a very selective discretionary manner. High rates of tax can be applied to those activities that are a speculative means of generating wealth and lower rates of tax can be applied to those activities that society believes are more positive to so called free market enterprise underpinning the cohesiveness of society. So by applying tax in a judiciuos manner you encourage greater participation in the areas of the economy that you want to encourage as the reward is made more favourable that working in an area where the profits are culled by tax making it less rewarding thus discouraging participation in this market area. In fact you can apply tax rates in such a way that they are penal killing of that commercial activity targeted.

    The real question is how do you apply tax in an equitable manner for all. So far tax it appears that tax is applied to favour those who possess and control the wealth. Will the wealthy accept higher taxes?

    • Deco

      We are already taxing people in the retail sector out of existence.

      There are elements in the state structure that greatly resent being ridiculed by Michael O’Leary. O’Leary knew this when confronting Bertie Ahern, Mary O’Rourke and Calamity Coughlan.

    • dwalsh

      @ BrianC


      Genuine coincidence :)

    • rebean

      I dont think that tax rates are the problem in Ireland. We have a third of the people unemployed not paying any tax.Our tax base is too narrow.All available cash goes into dole and public sector salaries. There is nothing left for real commerce. We do not have enough work in Ireland for people.There is no impetus to create jobs as we can just borrow the surplus. Ireland was never into industry . The industrial revolution bypassed us. We had the chance and still have the chance to be in the top echelons of computer software, pharmaceutical etc but we took our eye off the ball during the celtic bubble also known as Berties tiger.

  23. dwalsh

    Taxing the rich in a fair and equitable manner is of course necessary and right. But taxing the rich is not going to solve this crisis.

    I remember Cowen being asked in a TV interview when he was Minister for Finance why he would not tax the rich; he replied that not taxing them is “best international practice”.

    What he really meant is he couldn’t. Ireland is hostage to the rich – the global elite – through an international system that bankrolls our political classes…as well as those of all other nations. The USA is the most obviously corrupted system; but so are all the others.

    What Buffett is talking about is the rich paying their fair share. That should be civics 101. But it wont save our children from the grim future of debt feudalism that lies ahead if the speculators are not shut down.

  24. Malcolm McClure


  25. Juanjo R


    “Obama won’t tax the rich, as the Republicans and the Tea Party are keeping him in check.”

    It seems like you are asserting that the republicans in general ( and the tea party in particular ) have scared the democrats off increasing taxes. This simply hasn’t any factual basis.

    The democratic party has never increased taxes or even talked about it — not it’s presidents nor its contenders — and that includes Obama, Bill and Hillary and goes back as far as Ford and therefore even precedes the Regan neo-liberal period.

    Increases in taxes are as unpalatable to them as to the Republicans simply because the biggest financial contributors to polictical campaigns are the rich not the poor. They won’t get even close to being elected if they so much as mention a tax increase hurting the rich.

    Obama is as guilty of this as any other US president — red or blue.

    • Deco

      Show-Bama has put more Wall Street executives in the Administration, than the number of Houston Oil executives, picked by Bush.

      And then on top he throws in Chicago political machine crooks. Even Blagovitch was in on the act, trying to sell Obama’s Senate seat. In order to get the Daley family to vacate the mayorship, to make way for the disgraced Emmanuel to get the Party nomination for mayor, one of the Daleys had to be given a key role in the Administration.

      Show-Bama has committed himself to looking after Wall Street, by asking Wall Street to run the country for him.

      The whole thing is a corrupt mess.

      And it can only end in one way. Disaster. Of course, this realization itself makes us realise that the entire ponzi scheme is on a very poor foundation.

      As a citizen of this country, I find official media coverage here extremely insightful.

      The Taxed Enough Already movement is outgunned in the US media. There is an inherent assumption that they will be defeated, and everybody in the media must get on-side, or else there will be career implications.

  26. What is TAX ?

    This is a new defining moment in Irish Tax Law .No one seems to ask .Under the current philosophy and definition of Irish Tax Laws ‘austerity’ does not appear .

    Lenihan and Austerity are entwined as simese twins and the Irish taxpayers shown revoke that provocation into law and do it Now.

    The Rich ! What is Rich and what is fair and equitable .Now thats a seperate equation to discuss .

  27. Enjoyable article, if rather populist and middle of the road opaque call to tax the rich. Max Keiser on tranquilisers:)

    Yep, the super rich have a problem, what to do with their Finance.

    Its toxic housing bubble pyramid has collapsed in the US and Ireland; the OTC and exchange traded derivative associated scams built on it have yet to be unravelled.

    People’s pockets and Government’s pockets have been picked again.

    In the 80′s under Greenspan the game of deregulated exchange traded OTC derivatives was invented and the super rich made a pile of dough.

    The effect of this has been well documented and researched in the US by both Elizabeth Warren and Brooksley Born:

    Elizabeth Warren: Research/Writing on Disappearing Middle class. See end of

    Elizabeth Warren

    “In 2001, more men and women went bankrupt than filed for divorce or graduated from college (1.5 million versus 1.1 million and 1.2 million, respectively). In 2002 those who declared bankruptcy far outnumbered those who suffered heart attacks or were diagnosed with cancer. At present rates, one in every seven children in America will live through a bankruptcy between now and the end of the decade. And it’s not the working poor, credit-crazy youth, spendthrift “DINKs” (dual income, no kids), or fixed-income seniors who are swelling the ranks of the insolvent. The hardest hit are middle-class families, says Gottlieb professor of law Elizabeth Warren.”

    Brooksley Born

    Last January, Financial Crisis Inquiry Commission FCIC

    Attacks Greenspan:

    We need to take on the banking and financial sector and regulate with decent handcuff laws.

    An audit of practices in the financial services industry should examine malpractice and examine risk.

    OTC’s should be banned. Proper laws enforcing decent regulation of exchange traded derivatives should be enforced.

    In Ireland a proper inquiry into banking should examine the ‘loan to own’ lending practices in our banks that handed out mortgages to high risks.

    The problem is Governments have been taken over by a modern version of the banker Yangs, Omega Glory starship episode:


  28. Colin


    Not only should we tax the rich, we should tax the asset-rich folks too, a class of people which includes farmers and property landlords.

    • @Colin

      Your perception of asset rich is another mans stock in trade to earn a living eg farmers & land .Do you want to taxed on the value of the building in which you work inside?

      • Colin

        Farmer A dies/sells up, and Farmer B buys Farmer’s A for say €1,000,000. Then Revenue Commissioners send Farmer A a notice for payment of say 20% (to be set by the Dail), bringing €200,000 into the exchequer funds. Easy Peasy Lemon Squeezy.

        • @colin

          small minds comes to mind .

        • Why do you want to take from anyone?

          If he owns it outright you nor the state have any right to it.

          It’s called private ownership.

          With all due respect take your nose out of other peoples business and look after your own.

          • Colin

            Most people own their cars outright too. Are you suggesting the government take their nose out of the motorist’s business and scrap VRT, VAT, Duty on Fuel, Motor Tax? Flawed logic there Josey. Protect the Farmers at all costs Brigade?

  29. dwalsh

    The extremist asset-stripping taxation policies which some have suggested we should apply to ‘the rich’ would only further decimate our middle and entrepreneurial classes. Especially family businesses and farms.

    As a nation we need to encourage them; not penalise them.

    We also need to understand their real value to our nation.

    Their value to our nation lies in their entrepreneurial spirit and their ability to create and lead enterprises that generate productive activity that benefits whole communities and regions.
    Their value does not lie in raiding their personal pay-checks or assets. Those assets, although owned by them, benefit entire communities. Excessive asset and inheritance taxes actually attack the communities the assets employ and support.

    This kind of targeting of the rich is very short-sighted. It sounds to me like pay-back for begrudgers.
    Fair and equitable taxation for all is what we need.

    In another comment above there is even a call for a pogrom of the rich. I presume that was tongue-in-cheek.

    • Colin

      Thought you were a socialist? Instead you’re defending the rights of the asset rich? Reminds me of Gilmore, starting off years ago on the hard left, now on the big salary of Tainiste with gold plated pension and the missus trousering over half a million euro for a strip of land a Co Galway National Schools needs to buy in order to expand.

  30. dwalsh

    I think David’s article starts out well. It illustrates the reality of the piratical parasitical speculators that are at war with our nations and our civilisation.

    But then it veers off into the notion that we can allow this craziness to continue — if we tax it.

    Not a good suggestion in my opinion.

    The obvious thing to do with pirates is shut them down; not legitimise them by demanding a miniscule tax on their plundering.

    Shut then down. Let them create legitimate businesses if they can; but no more gambling on our real markets.

    • Its an interesting point and one I’d like to see addressed. Of course, the craziness as you call it at least in part ncaused by the tacit understanding that in the end the bottomless pockets of the current and future generations of taxpayers will pay for bad debts of large banks (or whatever the bubble de jour is). Until they can’t.

    • Nina Ogden

      Absolutely-dwalsh and colm, among others, are both are making these important points. Glass-Steagall will “shut these pirates down” and while David has circled around that in his last series of columns, not sticking to that real solution causes him to veer off again into tiny, desperate monetarist “solutions”.
      What vast riches of the rich do you think can be taxes as the whole system that made them rich crashes, as it is in the process of doing right now?
      The pirate gamblers will be stuck with vast loads of useless paper.Our next immediate step, that of those who think of economies inphysical terms and human terms, must be the kinds of great projects Abraham Lincoln and FDR rallied Americans to, along with other great projects of physical economy in other nations which built those nations. In Ireland, the Shannon scheme was looked to by Roosevelt before he was President, when he was still Governor of N.Y. as one of those great models.
      But yes we must do these things now, and actually it’s kind of silly to beat around the bush with any of these other desperate ideas. It’s kind of like passengers on the Titanic writing up a business plan to auction off the deck chairs-right before they go down for the third time.

      • dwalsh

        Yes back to the real physical human economy.
        No more gambling with our livelihoods and lives.

        Let them gamble in casinos if they want – with their own money.

  31. This was a good read but it is typically populist, disingenuous and incomplete as it leaves so many questions unanswered and answers none in particular

    The rich don’t pay tax, never have and probably never will. At least the smart ones with sharp accountants don’t. Tax is a filthy word and it has been made so by 40 years of right wing selfish ideology. There is no such things as society
    etc etc etc and I ain’t paying tax to fund dole ‘scroungers’ etc. The usual language of the right wing. It is tax money that pays to fix Granny’s back door and treat cancer patients. But of course we are closing cancer wards and Granny’s back door will… just have to wait now that we have no swag to fix it for her

    So Mr O’Leary is threatening to leave the country if asked to stump up more tax. Just like Bono (who is an awful person in my opinion) he is happy to pull on the green jersey as long the price is right. It was the Irish people who made these people and this is how they repay the country that fed and watered them until they turned into the megalamaniacs they are today. We don’t need such figures to act as role
    models for future generations. They are vain, selfish and full of their own self importance and not something we should aspire to. Screw them. We will just fix Granny’s door ourselves. To hell with Basildon Brett and Leprechaun O’Leary

    Regarding tax and the arguments for keeping the corporation tax lower than other EU nations there is a glaring contradiction staring us in the face. If as the right argue our lower corporation tax creates jobs and inward investment then where are all these

    Lower tax helps create jobs? yet there are 450,000 (probably 600,000) on the rock and roll. Maybe I am missing something

    Does that mean that there would be even more on the dole if we raised taxes? I am not an economist thank god so maybe you can explain this conundrum David. Who is shitting who here?

    Maybe the rich will just bugger off and buy one of those islands of the world in Dubai. Oh I forgot they are now sinking haha. What poetic symbolism for a world bankrupt through greed and self importance. How patheticaly vain these rich people can be. I pity them

  32. Scipio

    “Tax the Rich” is just a euphemism for class envy and class warfare. In the USA the problem is spending, not revenues (aka “taxes”). If you seriously want to fix the debt problems of the US (& Europe) then you need to cut “entitlements” and actually teach the kids something which makes them employable in the global economy.

    The West has created a class of citizenry who are stupid, lazy, violent and parasitical. Witness the London rioters. Maybe we just need to write this generation off (reinstitute national service and make them work for their dole ??) and start again. Personal Responsibility, Economic Liberty, Individual Freedom. Probably won’t happen. But I digress…..

    FYI you can tax the rich in the USA (defined by Obama as a household earning more than $250,000 annually) at 100% at the margin and you still wouldn’t cover 1/2 of the 2011 US deficit. And its a one trick shot. What western society needs to do is focus on economic growth. That means incentivizing work and entrepreneurship and eliminating the layers of useless and suffocating rules, regulations, bureaucracy, “health and safety” garbage along with the army of public sector drones who oversee them. Common market without the EU anyone ?

    • That’s an argument often deployed as a counter to the one our host suggests. Class warfare also occurs when professionals and middle classes are taxed at a higher effective rate than those who earn ten times their incomes.

      I don’t think its unreasonable to ask those in the upper stratosphere of incomes to pay at least at the same rate as those who earn orders of magnitude less than them. In fact, with a flat tax across all income ranges, there is no class distinctions at all.

      • Scipio

        I would totally agree with a flat tax. However, I would tax consumption, not income with no exceptions/sacred cows such as housing. 20% consumption tax, no capital gains tax or corporate income taxes. Reintroduce Glass-Steagall, tort reform, elimination of the EPA, Fanny & Freddy, and exploit indigenous natural resources. Then watch the US economy fly.

        Part of the problem in the USA is that 47% of the population pays no federal income tax. With no skin in the game tax policy is meaningless to this group. The US has reached a tipping point. Capitalism vs Welfare State ? Time is getting short.

    • dwalsh

      America was not bankrupted by the working classes or the unemployed or the public servants or by its legitimate business owners. Nor was it bankrupted by legitimate public spending in the form of social infrastructure and services.

      Maintaining a global military threat and conducting imperialistic wars has damaged America’s balance sheet significantly…but America was bankrupted by global financial capitalism — speculation — which has cost trillions. It has been the biggest criminal heist in history. America is the victim of a systemic fraud that has corrupted the political and social order. It may not be possible to repair the damage other than by a disaster.

      It definitely will not be fixed by blaming and punishing the lower classes of our societies. Solidarity against the criminals who are wrecking our civilisation is what is needed.

      • Scipio

        Actually, the American military’s relieving Europe of the responsibility of paying for its own defense is the reason that the European welfare state came into being following WWII.

        Not sure what you mean by “systemic fraud” ? All sounds rather Ludlumesque. Who are these “criminals” – the Matarese ?

        Reality check – America is being bankrupted by out of control spending on utopian social(ist) engineering and by massive unfunded entitlement liabilities.

        • @Scipio

          Reality check — America is being bankrupted by out of control spending on utopian social(ist) engineering and by massive unfunded entitlement liabilities.

          What a load of codswollop Tea Party Nonsense. It was “utopian social(ist) engineering” a la the American Constitution itself that built America, built its infrastructure of roads, bridges, rail roads, Hoover Dam. Its Marshall aid to Europe created a market for US goods and services. Stimulus spending created the middle class in the US.

          The “utopian social(ist) engineering” you mention was the plundering of American free enterprise capitalism. This was and continues to be carried out by banking interests of the current socialist bankocracy.

          Deregulation fed by debt flow, devaluation of the dollar and reliance on outflows from a deeply corrupt and flawed financial system has brought the US to its knees.

          Research clearly demonstrates the America economy has sucked wealth away from those who create wealth in the general economy upward to the super rich.

          Band aids like increasing taxation to maintain this flawed system without addressing deep structural reform of the system, will only accelerate its imminent demise.

          If the US doesn’t cop on to how Wall St and the banks
          have brought into being deepest fears regarding private banking interests shared by Abraham Lincoln, its got a banana future.

          If the general population are not funded for education, welfare and well being, just like in Gadaffi Libya eventually the population itself, will come after the few who’ve ripped them off.

          I’m a capitalist not a Tea Party bank interest keeper supporting socialism for the banks:)

          I hope DmcW has not changed tack and now supports the view we need higher takes on the rich to pay banking debt of the financial services industry.

          • 1st par should be in quotes..

          • Praetorian


            US society is bled from the top and well you know it, enough of your nonsense, it is insulting.

          • Scipio

            So instead of shouting at each other from electronic soapboxes how do we solve this entitlement/debt conundrum ? Both in Western Europe and the US.

            I would argue that there isn’t enough money in the world to pay for all the programs/entitlements that have been put in place. So, if we accept this premise how much do you think people should pay in tax and what should it fund ? This is the real question facing The West.

            My understanding of the “Tea Party” premise is that if you make $1 then you don’t spend $1.50. Why is that so nonsensical ? All the people I grew up with lived like this as credit wasn’t available to most Irish people in those days. I certainly don’t support keeping zombie banks alive. Let them fail and let the bankholders take the hit. However until you have an “Irish Spring” and throw out these crooks who are destroying the country that won’t happen.

            Praetorian – don’t you know all societies are bled from the top – maybe you should get out more.

        • Deco

          This here is a country that benefits from American / NATO military power.

          Of course when it is available, it makes perfect sense to be neutral. It is questionable if we are really non-aligned. Not since Frank Aiken at any rate. And especially given the content of some of the EU Treaties that we ratified (after heavy propoganda do do so).

          You are correct. Too many commitments bankrupts a country. Not just an American problem. Look at this country. Even without military adventures we are overcommitted. And there is no shortage of politicians or sectoral egos in the defence sector trying find justification for a bigger budget.

          The elephant in the room is the “social partnership” method whereby the running of the country is handed over from the democratically elected organs to vested interests. Who voted for Danny McCoy and David Begg anyway ? I certainly don’t remember them being on the ballot paper.

          • Deco

            At some point we will reach the point where additional taxation in the “juggler” generation simply results in less taxation.

            In fact we may have already reached it.

            And then some extremely hard decisions will have to be made.

            The national tendency to dither, and deceive will be played out.

            We have kicked the can down the road – and then we will find we have been led into a cul-de-sac by the “leadership” of this country. (in other words the career politicians who are pliable to the will of the vested interests).

            Then, the fur will fly.

        • dwalsh

          The only “social(ist) engineering “ going on in America during the past decades has been the utopian debt-driven consumption which has perpetuated the illusion of the American Dream while the actual industrial basis of it was dismantled and America’s national infrastructure allowed to fall into disrepair.

          • Deco

            Consumerism resulted in the dumbing down of America.

            Of course consumerism is only as good as the ability of the consumer to stump up the cash.

            So in order to goose up the economy, the US Federal Reserve, and a plethora of state agencies are responsible for making people feel secure – so that they can get themselves into debt.

            And this is only as good as the credit market can last without a spectaular blow out.

            I am not so sure that the Democrat and Moderate Republican agendas are really helping the bottom 47% of the US population. It seems to me that they are facilitating higher consumption levels so as to facilitate the top 10%. A case of things being far more complex that at first they seem. Ideology in such a circumstance is not particular useful at hightlighting who is doing well.

            The most useful hint in such circumstances is to follow the title of David McW’s book.

            “Follow the money”.

            The role of Freddie Mac and Fannie Mae has been to rev up consumption.

          • dwalsh

            America’s political classes are funded and owned by Wall St. Until that is addressed America is not and cannot be truly democratic. As some others have pointed out here a recent supreme court decision has supported this situation. Meantime politics is a charade with intermittent bouts of musical chairs called elections. All sound and fury signifying nothing – to bamboozle the public so they wont notice what is being decided for them.

        • dwalsh

          @ Scipio wrote:

          “I would argue that there isn’t enough money in the world to pay for all the programs/entitlements that have been put in place.”

          There is more than enough money in the world to provide for everyone. What there isn’t enough money in the world for is the greed of speculators.

          Are you aware of the real cause of this crisis — derivatives? That there is estimated to be a quadrillion or more sitting on the balance sheets of financial institutions around the world. J P Morgan are sitting on something like $90 trillion…with an asset base of less than $2 trillion. Do the math. That is sheer lunatic greed. Global GDP is something like $65-70 trillion.

          Our global problem is production and distribution not scarcity. Our markets are being manipulated and skewed by speculators so they can profit from the imbalances and volatilities.

          • Scipio

            Ah….so you are one of the “spread the wealth around” folk. Let’s see Global annual GDP of say $70 trillion. Global Population of 7 billion (approx). Everyone gets $10k a year. Sounds great. Where do I sign up ? Will it be COLA adjusted for higher rent districts such as Manhattan & Knightbridge ? And, where has this been successfully implemented historically ?

            Our global problem is lack of economic growth. Production, distribution, consumption. The problem is that our governing class has killed growth stone dead through rules, regulations, bureaucracy, taxation and the removal of moral hazard with the “TBTF” thinking. Until this can be addressed the hole is only going to get deeper. This is the real issue.

            Banks and speculators have always been there. You can get rid of all the derivatives trading you like but they’ll just think up something else. They are just the tail on this dog.

          • dwalsh

            Yes I’m one of those weirdos that believe in fairness and the like. And I’m not even a Christian.

  33. thirdeye

    Shows the American like Buffet & latest reports that the 16 French super Rich including L’Oreal and the head of oil major Total, urged the government to tax them more to help solve the country’s financial problems.French and American elites are are starting to folow the French motto Liberté, égalité, fraternité. It shows up the rich in Ireland as being total financial traitors with the previous and present government like U2 and others well known individuals who gained financially but put nothing back into the society from which they claim to be from.

  34. The farmers who did not buy bank shares with their Celtic tiger land rezoning windfall cash are now buying back their agricultural land for 10% of what they sold it for in the first place.
    Who wouldn’t be a farmer.
    Back in place for the next round.
    Still no proper tax on windfall land sales.
    Nothing ever changes.

  35. [...] are available on itunes (just search for mslaw) and at Video Rating: 5 / 5 Erin Arvedlund first wrote about Bernie Madoff for Barrons in 2001 and published her book, Too Good…" [...]

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