The case for a flat rate of tax - 20% for all.
Discussion
I was reading in the Times today how HMRC is working hard to find other sources of tax revenue, by taking steps such as looking at the land registry to catch amateur landlords, see if people have bought and sold their main residences too often and so chase them for CGT etc etc..
Of course, running the HMRC on such lines means that we end up with a massive organisation ( and a massive employer ) that collects a lot of tax but also spends a vast amount of cash in doing so.
This has reminded me again of the case for a flat rate of tax.
Someone, somewhere, has often offered the view that if we simplified the tax system so that everyone paid a flat rate of 20%, with a high threshold before paying anything for the low paid, the net result is that we would end up collecting MORE in taxes because the richer among us would not bother with tax havens and simply pay up. There is an opinion that overall the amount of tax collected would increase, the UK would be more attractive to investors and everything would be sunny and smelling of roses.
Of course, socialists would hate it because they would be losing the power of the state and its bureaucracy, but I am interested to know if anyone has any insites that support the idea?
Is there anything in this?
TS
Of course, running the HMRC on such lines means that we end up with a massive organisation ( and a massive employer ) that collects a lot of tax but also spends a vast amount of cash in doing so.
This has reminded me again of the case for a flat rate of tax.
Someone, somewhere, has often offered the view that if we simplified the tax system so that everyone paid a flat rate of 20%, with a high threshold before paying anything for the low paid, the net result is that we would end up collecting MORE in taxes because the richer among us would not bother with tax havens and simply pay up. There is an opinion that overall the amount of tax collected would increase, the UK would be more attractive to investors and everything would be sunny and smelling of roses.
Of course, socialists would hate it because they would be losing the power of the state and its bureaucracy, but I am interested to know if anyone has any insites that support the idea?
Is there anything in this?
TS
I think a couple of Baltic states went this route and it has been very successful.
And yes total tax take rises.
I do think that this is the kind of radical move that the Conservatives should embrace, it would be a big vote winner with many many people. Provided they also had a flat personal allowance of £10k for anyone earning less than 20k per annum.
And yes total tax take rises.
I do think that this is the kind of radical move that the Conservatives should embrace, it would be a big vote winner with many many people. Provided they also had a flat personal allowance of £10k for anyone earning less than 20k per annum.
Gargamel said:
I think a couple of Baltic states went this route and it has been very successful.
Hardly anyone was paying tax there before though!Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Edited by Deva Link on Thursday 18th March 16:35
It's the logical thing to do.
But as mentioned already, a complicated system has too many advantages for the people in power.
Plus, you have those people who then complain that the Rich benefit the most from this, and the poor people suffer....which is complete and utter nonsense.........but then again, those people have no sense.
But as mentioned already, a complicated system has too many advantages for the people in power.
Plus, you have those people who then complain that the Rich benefit the most from this, and the poor people suffer....which is complete and utter nonsense.........but then again, those people have no sense.
Edited by Spiritual_Beggar on Thursday 18th March 16:52
Since when does things like "Logical", "Straightforward", "Transparent", "Simple", "Cost Effective" have anything to do with Government?
We could do away with road tax and put it all on petrol, then people with inefficient cars that drive a lot pay a lot, people with efficient cars that drive a little pay a little, oh and it's nigh on impossible to avoid.
We could do away with the complicated system of taxation with various bands and exemptions and loopholes with huge overheads involved in collection and monitoring, possibly even increasing take and certainly cutting collection costs.
Thing is, if we did these then Civil Servants would need to be made redundant, the Government would never accept that, the civil servants would never accept that. The function of a Civil Service is to grow and encompass more and more.
We could do away with road tax and put it all on petrol, then people with inefficient cars that drive a lot pay a lot, people with efficient cars that drive a little pay a little, oh and it's nigh on impossible to avoid.
We could do away with the complicated system of taxation with various bands and exemptions and loopholes with huge overheads involved in collection and monitoring, possibly even increasing take and certainly cutting collection costs.
Thing is, if we did these then Civil Servants would need to be made redundant, the Government would never accept that, the civil servants would never accept that. The function of a Civil Service is to grow and encompass more and more.
Size Nine Elm said:
Eric Mc said:
Never happen.
Complicated taxes have too many advantages for those who wield power.
And for accountants. And Tolleys...Complicated taxes have too many advantages for those who wield power.
Maybe accountants would prefer to spend more of their time dealing with non-tax issues.
Old, mature economies, tend to have unweildy and complicated taxation.
Young, new economies, tend to have simple taxation systems.
Come back to Latvia in 150 years and see how simple their tax is by then.
plasticpig said:
It appears to work ok in Eastern Europe.
Nope!Bulgaria and Romania, tax is flat at around the 16% mark (income and corporation). Both need huge investment for infrastructure improvements but with average monthly wages of around €250, they are not collecting sufficient revenue to pay for the improvements. If they could, then employment would rise, wages would rise, tax could then rise to further improve things and the development and improvements become self perpetuating.
There's no middle ground (class) in this part of the world. You have the poor and you have the rich. There is huge money coming in from Russia but hardly any of it finding its way into the system which stifles development.
Bottom line is that it's a system that creates a massive black economy which leads to corruption on a monumental scale at every level.
If they do sort it out (and there are signs that they will do so), then both countries - particularly Romania (largest Oil and Coal reserves in Europe) - could quite easily become dominant global economies over the next 15 years or so.
Deva Link said:
[quote=Gargamel
Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Well that'd be good, we already have a basic rate of nearly 40% now.Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Edited by Deva Link on Thursday 18th March 16:35
jagracer said:
Deva Link said:
[quote=Gargamel
Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Well that'd be good, we already have a basic rate of nearly 40% now.Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Edited by Deva Link on Thursday 18th March 16:35
Deva Link said:
jagracer said:
Deva Link said:
[quote=Gargamel
Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Well that'd be good, we already have a basic rate of nearly 40% now.Australia was going to do it, but the plan was suddenly dropped.
It's reckoned they realised the percentage of gainers would have been pretty small (less than 20% of taxpayers) and to leave lower paid people no worse off would have cost a fortune.
And they were looking at a flat rate of 30%, not 20% as suggested in this thread title.
Edited by Deva Link on Thursday 18th March 16:35
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