The IEA completely endorses my tax gap estimate. Obviously.

As we know, I am never wrong.

That’s why any piece of evidence which might possibly appear to agree with any work I have ever done is noteworthy and requires comment at great length on my blog explaining how, given certain underlying assumptions, the evidence categorically and logically supports my call for a State of Courage, if you look at it from a certain angle in a certain light.

I will now take carefully selected second-hand statements from a leftwing newspaper that has selectively paraphrased and summarised the report from the Institute of Economic Affairs in support of conclusions I made regarding on data taken five years before the data before the report. Which is, for statistical purposes, probably completely unchanged. Despite my constant warnings of the widening tax gap.

The Guardian reports that:

Britain’s shadow economy is now worth £150bn a year – but it is smaller than in most other western nations and last year fell to its lowest level in almost a quarter of a century, according to a report released on Tuesday.


A study by a free-market thinktank, the Institute for Economic Affairs, estimated that paid work not declared to the taxman was worth 10% of national income in 2012, half the level in Italy, Greece and Spain.


This completely supports the argument I have always made in defence of my tax gap calculation that there is no reason to suppose, as HMRC inexplicably do, that tax evasion and tax fraud in the UK could be less than the average or other European economies, such as Italy, Greece or Spain.

Also, the number of £150bn GDP in the black market suggests that there is at least £60bn of tax avoidance by large corporate entities and absolutely no loss to the UK government through benefit and tax credit fraud.

And they go on to further support my conclusion that it is exclusively large multinational business responsible for the tax gap:

The authors said the most important factor determining the size of the informal economy was the tax and benefits system, and much of the shadow employment in Britain could be blamed on the loss of benefits and tax credits for low-paid workers as they earned more.

Of course, for “low-paid workers” you need to read between the lines and interpret it as “large multinationals like Google, Apple and Amazon, and super-wealthy neoliberals who are committed to destroying The State for ideological reasons”.

This suggestion also agrees with my work on the Laffer curve which says that higher taxes have no effect on behaviour to reduce their tax burden.

And these figures do not include any estimate for not-getting-benefit avoidance or not-getting-tax-credit avoidance which is exclusively the domain of large corporations who decide to not bother working in order to game the system and stay at home watching Jeremy Kyle.

I therefore think I’ve underestimated the proportion of the tax gap attributable to large corporations and think that it probably is around 150% of my estimated tax gap of £150bn pounds.

In fact, the authors of this report might as well have just saved themselves the effort of doing any research  and just used published a statement saying

We agree with that well-known tax expert and mathematician, Murphy Richards. You should probably buy his books.

I couldn’t agree more.


2 thoughts on “The IEA completely endorses my tax gap estimate. Obviously.

  1. Murphy, can I just say I totally agree that you are never wrong. You are simply infallible. However, hypothetically speaking, even if you were wrong on something it would actually be the surest sign you were right.

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