Adam Smith Institute

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How to know someone's away with the fairies

It can be worth a little checking of a claim against reality. Just to see whether the claim has any basis in that reality that is. So it is with this from Jean-Luc Melechon in France. Is this a reasonable set of insistences?

Europeans can insist environmental rules be respected everywhere: that not more is taken from nature than she can replenish. We can abandon pesticides, which kill biodiversity, immediately. We can decide to eradicate poverty, guarantee a decent wage for everyone, and restrict the income gap to stop inequality. We can extend women’s rights.

We can bind the hands of those who steal by tax evasion, those who misappropriate thousands of billions of euros every year.

It sounds rather colonial really to insist that all out there must do things as we insist they should. Still, we did it before no doubt it could be done again. We can’t stop using pesticides immediately - we’ve not enough land. Organic farming does require more land per unit of food produced and there simply isn’t enough of it to both leave some for nature and keep all of us alive. Europe has eradicated poverty - barring unfortunates in the grip of mental or addiction problems there is no one on the continent at all living in the usual international or historical definition of poverty, that $1.90 a day. Quite how we restrict the income gap is unknown and we have, do and are, extended women’s rights.

It’s the tax number which is easiest to compare in detail though. thousands of billions of euros is trillions. And the idea that there’s trillions in tax evasion just doesn’t match up to that reality. We can test this in two ways.

Quite the most expansive estimate - very expansive indeed - is from Richard Murphy and that’s below €900 billion for the entire EU. Given that his estimates of the UK gap are well over three times those of HMRC we should take that as being well over any realistic upper limit.

The other way to look at this is to note total tax revenues in the EU. Around and about €5 trillion a year. Trillions means at least two such, possibly more. And we really don’t think that there’s room for government to be collecting another 20% or more than they already do. There’s not room in GDP for them to be taking that much.

Sure, this is just one detail in a flood of rhetoric. But if one particular claim is as obviously wrong as this we don’t need to pay attention to the rest. It is all, obviously, just that rhetoric, not an actual analysis of anything useful.