But that would involve a huge loss of government revenue, £50bn or so - two-thirds of the cost of the NHS. A recent pamphlet from the Adam Smith Institute reserved a flat tax for incomes above £12,000, which would exempt a fifth of all households from paying any tax at all. To get round this fundamental objection, flat taxers start talking about allowances. Which is why a flat tax was, and is now, evidently unfair. The extra income earned by a rich person is simply worth less than the extra pound in a poor household. But the basic case for progressivity remains the one made by that celebrated socialist Adam Smith, who said taxes should be based on equality of sacrifice. Followers of the liberal zeitgeist, including - especially - New Labour, have moved the UK system in the direction of cutting top rates and simplifying bands. These days, everyone approves of incentives. (But a test of consistency is whether you then accept Mill's arguments - as some flat taxers do not - that unearned income, and inheritance, should also be taxed.) If, like Gladstone and John Stuart Mill - who opposed early moves to graduate income tax - you think that higher earners need incentives, then you might favour proportional tax rates. Flat taxes are inherently a device for protecting the incomes of the better off. One of the doctrines of that faith is the beneficence of inequality. That story is based on debatable economic models and dogmatic faith.
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