In the week commencing Monday 27 January, a song called 17 Million Fuck Offs made the top 40. On Brexit day itself, it was in the top 20. It’s spectacularly rude — featuring about as much swearing as an average Eminem or Stormzy number — and very, very funny. This, however, is only if you voted Leave in 2016 (or are a Remainer with an unusually accommodating sense of humour).
It did so as part of a campaign by Brexiteers to make it Number 1, something its author and performer admitted after the fact was rather more difficult than expected. That individual is finance journalist Dominic Frisby, and several of my strangest recent conversations involve explaining to people that the sober and serious bloke who writes about everything from Bitcoin to ISAs for papers up and down the country is also the potty-mouth in the 17 Million Fuck Offs music video skipping around the Parliamentary Estate and across College Green giving all and sundry a pair of double-digit salutes.
In short, Dominic Frisby has the oddest double-life, and now he’s had a proper hit, he’s found himself with two completely different markets. Fortunately for him, his latest book — a product of the financial side of his oeuvre — was published a couple of months before he got his hit, and with luck his audiences will merge.
Daylight Robbery: How Tax Shaped Our Past And Will Change Our Future in some ways sketches out what a market merger may look like. At 2016’s Edinburgh Fringe, Frisby performed what he calls a “comedy (sort of) show” called Let’s Talk About Tax, and after positive reviews Penguin invited him to write a book. As with getting 17 Million Fuck Offs to number 1, this process proved harder than expected. “I thought transposing it into a book would be easy and quick — a formality,” he says. “It ended up taking the best part of three years”.
During those three years, however, Frisby acted as compère at comedy venues around London, including Bethnal Green’s Comedy Unleashed, a club with a reputation for upholding free speech and a willingness to book controversial acts, from Count Dankula (“the Nazi Pug Guy”) to edgy drag queen Vanity Von Glow. This honed his expository skills in such a way that the humour once present on only one side of his career ledger began to seep into the other. Daylight Robbery is much the better for it. While it may not exactly be “a funny book about tax policy”, it comes very close, while wearing its considerable historical and financial erudition lightly.
In it, Frisby does three things. First, he spends quite a bit of time “rewriting the entire history of civilisation from the perspective of taxes”. Secondly, he outlines the extent to which legal tax avoidance and illegal tax evasion is an arms race between increasingly tech savvy individuals (who want to pay less tax) and increasingly tech savvy governments (who want to collect more of it). Finally — in the last third of the book — he outlines some concrete policy proposals that he argues will not only make taxes easier to collect, but fairer and more transparent. He spends most time discussing what he calls “location usage tax”, something economists usually label “land value tax”.
Although he is open about having classical liberal or even libertarian sympathies in various spots, he never “sounds like a teenage Marxist,” something I’ve often noticed when encountering libertarians. I have at least classical liberal if not libertarian sympathies myself, but I’ve lost count of the number of times I’ve watched libertarians in particular “lose the room” as they try to persuade an audience of middle class Tories (or even otherwise sympathetic university students, especially on the drugs issue) that we should legalise crack cocaine, institute open borders, or accept that taxation is theft.
On the latter point — consistent with his finance background — Frisby gives fair play to both the taxation is theft argument and the “taxes are the price we pay for a civilised society” argument (the latter is inscribed on the outside of the IRS building in Washington, DC). The reader comes away from his discussion having whatever prejudices he holds in either direction disconfirmed, and is forced to confront the genuine possibility that taxation is both at the same time.
It is shocking that people throughout the developed world, over the course of a lifetime, typically pay far more to the exchequer than they do when discharging their mortgages. In France, if you pile up everyone’s annual tax dues, on average people have to work for half the year before they earn any money themselves. The first half of the year is literally spent “paying for the government”.
But the state’s sheer technical capacity has also grown commensurate with its ability to collect revenue. Frisby is careful not to fall into the common libertarian “but government is always incompetent” trap. Things like the French healthcare system, the UK’s Russell Group of universities, or German trains, say, are a marvel.
His account of major historical events “from the perspective of taxes” — leaving aside the American Revolution, which is acknowledged by all to have its roots in bungled tax policy — is extraordinary and sometimes shocking. Of particular note are his chapter on how disputes over the differential impact of tariffs on Northern and Southern states contributed as much to the US Civil War as disputes over slavery, and his discussion of the Holocaust.
Most historians (legitimately) focus on the “blood” element of “blood and treasure” when it comes to wars and genocides, and it is indeed difficult to look away from 600,000 dead Americans and six million dead Jews. But Frisby the finance journalist is there to remind us that German Jews were an economically successful “model minority”, and his detailed account of the way the Nazis fleeced them before killing them is stupefying. “What they confiscated [from Jews] paid for roughly one third of Germany’s war effort,” he points out.
In a sign that Daylight Robbery is a book that people on both sides of politics should read, Frisby takes left arguments about widening inequality seriously. He argues — along with the likes of Thomas Piketty — that labour is taxed too heavily, and capital too lightly. Ireland, for example, has attracted a great deal of investment thanks to its 12.5% corporation tax. This, however, is cold comfort for Irish employees of the likes of Apple or Pfizer, who pay 40% on earnings above €38,500.
Relatedly, economic distortion is produced not only because different parts of the economy are taxed at different rates, but because some things — Frisby uses the phrase “digital intangibles” — are simply hard to tax. This leads to the taxpayer versus tax-collector tech arms race mentioned earlier, but also means everyone everywhere is subjected to increasingly invasive surveillance from both governments and corporations and so rendered unable to keep even intimate behaviour private. Stories about store purchasing apps figuring out women are pregnant before they’ve taken a pregnancy test have now become routine.
Frisby’s concern with economic inequality and the undertaxing of capital is what leads him to advocate his location usage tax. He argues it would help in shifting the burden of taxation from labour to capital, end land-banking, and encourage productive activity. His core point is that the unimproved capital value of a piece of land is often a matter of luck: it’s located in Knightsbridge, or the government built a railway nearby, say. And since this increasing land value is unearned wealth, it should be shared. The unimproved aspect is also crucial:
“Imagine two identical plots in a city centre. One is undeveloped scrub, the other has a magnificent building on top. They would both be taxed at an identical rate. The only thing that is considered is the value of the land in its unimproved state […]. The wealth that has come as a result of building should be kept by the developer who took the risks, or the new owner.”
He observes that “effectively, it’s a consumption tax; the more valuable the land you use, the more tax you pay”. And, unlike the situation with digital intangibles, a location usage tax is impossible to evade and easy to calculate. It’s not as though some fabulously rich Sheikh is going to be able to load Knightsbridge onto the back of a truck and take it away with him. But he can be made to pay — handsomely — for his ownership of a plot in the area.
Many scholars — most notably Professors Steve Davies, Matthew Goodwin, and Eric Kaufmann — have worked hard to convince journalists and commentators like me to take cultural issues seriously in order to get a grip on our current political moment (Trump, Brexit, AfD, Orbán, Sinn Féin, etc). It is not slighting their work to recommend a book that pays close attention to tax policy. Governments, whether populist left or right or neither, cannot simply ignore half of what is important about governance in the way culture was once ignored by policy wonks who cared only about economics.
To that end, Daylight Robbery comes highly recommended.
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