Remember Richard Murphy? The man who wants more tax, closely followed by lots more tax?

Watching him and Tim Worstall slug it out is one of the UK’s best blog battles.

Anyway, Richard is taking up the government’s willingness to let the public suggest stupid laws for abolition. He suggests getting rid of Low Value Consignment Relief:

Low Value Consignment Relief (LVCR) relates to the import of goods, very largely from the  Channel Islands on which VAT is not charged because of the exemption provided in UK law, and allowed under EU law, which permits with a sale value of less than £18 to be imported VAT free, even though VAT would be due on such imports if worth more than £18.

Tesco and other retailers are, according to RM, ‘abusing’ this facility:

… ship goods from the UK, largely to order, and then post them back again. The export from the UK is VAT free. The return is VAT free and the UK High Street price including VAT is undermined, so undermining UK tax revenues by more than £100 million a  year, undermining the UK High Street by forcing shop closures and undermining UK jobs as a result: a massive triple whammy.

Zounds. What will clever accountants think of next? Although presumably this scheme works only because the goods sold are a bit cheaper and some people get work running it, so should not the utility for workers/consumers of all that  be factored in to the overall social cost/benefit calculation?

Anyway, this posting led to a libertarian-inclined RM reader commenting that if the government here and elsewhere in the EU wants to set up such rules, it is right and proper that businesses operate within such rules to maximise their advantage. Leading RM to say this, after some to-ing and fro-ing in the comments:

… you are also hopelessly wrong. Greed never was and never can be the basis for morality. And without morality these (sic) is no society

A bold and ambitious claim indeed. Not clear to me where ‘greed’ comes into the issue. So I penned the following (admittedly rather condensed) observation:

Sure, greed is bad. But ‘greed’ comes in many forms and includes people in government and trades unions and feckless welfare scroungers as well as errant high capitalists.

The only thing between us and the Stone Age is human creativity, energy, ambition and determination. You seem to characterise much of those vital forces as ‘greed’, juxtaposing such greed against the inherent righteousness of government and bureaucracy funded by levies on the results of creativity, energy, ambition and determination, and extracted by force by the state.

Having worked for HMG for nearly 30 years, most of it serving in authoritarian/communist and former communist countries wrecked by excessive state power, I utterly disagree with you.

Prompting Richard rudely to draw on the logic of Roger Irrelevant and say this (emphasis added):

Respectfully, if that is an argument you have a great deal to learn about the art

I made the point that greed (and all those other characteristics you attribute to it) are pointless without morality.

You seem to observe that you have no perception of what morality is because you worked in communist countries fr thirty years – the latter being a point so irrelevant to any current consideration it is hard to see why you mentioned it, except to prove the lack of evidence for your position.

If you can’t do better than that please don’t bother to comment again.

Charming!

My latest reply:

Blimey. A nice way you have with your readers.

How did you manage to skew what I said in so strange a way?

I did not ‘attribute’ positive qualities to greed. I was trying (tersely) to get at two points:

a) that wanting personal success and doing well and being rewarded therefor are not ‘greed’. In fact I would say that striving for excellence and creating new products and processes which benefit others are a high expression of morality.

b) that societies which have tried to collectivise creativity and personal success have been ruinously unsuccessful.

Most people these days, including so-called libertarians, accept that there is a case for collective action through governments. The debate is about the costs and benefits of that sort of collective action, as opposed to the costs and benefits of using less formalised and non-coercive incentives.

The exchanges arising from this posting are all to do with what by any normal standards of comprehension by the population is an obscure provision in VAT. You say that the cost to the taxpayer is £100m per year. If the government tweaks the law a bit to stop this, so be it.

A far greater cost to the taxpayer is EU carousel fraud, under which many billions of pounds are stolen from the public purse in the UK and across the EU. Stopping this is far harder, as the very nature of the way the EU works makes such fraud possible. It is a classic example of the very fact of a well-intentioned government process opening the way to criminality on a startling and system-destabilising scale.

Likewise the fact that the huge cigarette taxes we have in this country incentivise smuggling from Eastern Europe, again costing billions of pounds a year in ‘lost’ revenues.

The deep truth is that any given law creates marginal anomalies, and some laws create anomalies which are far more than marginal. It’s in the nature of law and language itself that this happen.

So there may come a point where it’s best to be much more realistic about how best governments can operate well in partnership with ’society’, lest official striving to stop every supposed abuse created by officialdom becomes counter-productive if not oppressive.

Enough.

Time to start on this week’s Britblog Roundup.