Flat rate taxation can be a radical alternative that may well create the kind of world which you seem to be after

How? By increasing tax on the poor and decreasing it on the rich?

molgrips
You appear trapped in the same way of thinking as this man too.
“The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage”.

molgrips
You appear trapped in the same way of thinking as this man too.
“The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage”.

What do you mean?

Flat rate are not used anywhere and every country in the world, I am aware of, has a progressive tax system [ must be one ]

At least 40 countries do .Maybe appraise yourself of the facts a wee bit before making assumptions about others eh?

Why does it work better then nick?

jambalaya – Member
We do have one rate of corporation tax for example, you don’t pay a higher rate because you are a larger more successful company.

Yeah, right. Amazon, Tesco, etc.

Flat rate tax benefits the rich, those who earn 6 figure sums, and impoverish the low paid, those people who work, still pay tax and then receive benefits because their pay is below a level considered to be enough to support a family. At the same time large companies are effectively handed cash in the form of lax enforcement of tax laws and the government topping up poor wages through benefits due to the minimum wage.

So, yes, it’s fair if we all pay the same rate of tax. 🙄

We do have one rate of corporation tax for example, you don’t pay a higher rate because you are a larger more successful company.

Actually you do – there’s a discount for small businesses afaik. Or at least there was last time I had to pay it.

@cheekyboy Only if we can be certain that free loaders like yourself can be left on the side of a mountain with your broken collar bone and wallet to fend for yourself

I suppose that was you and your accolytes laughing at me whilst I lay in a star-shaped configuration at the bottom of the Slab up at Gisburn with a dislocated shoulder 🙂

Fact is they will probably be leaving more folk on the side of mountains after they have ridden us much further into the valley of DEBT once they get fed bombing he sands of the middle east into glass.

It is a Gordon Brown quote used to criticise flat rate income tax.A man bankrupt of ideas who ended running an almost bankrupt nation.Progressive income tax is a sacred cow and the elephant in the room(apologies for the mixed animal similes).

Progressive taxation isn’t working and the gap between rich and poor is increasing.

What a bizarre comment. Increased income inequality has nothing to do with progressive taxation other than the shift away from it and onto more regressive taxation.

From the Victorian days right up until 1979 the share of income received by the wealthiest 1% fell, then after 1979 their share of income increased.

Why this happened isn’t a mystery – Thatcher got elected and and her policies have continued to be applied since then. She certainly didn’t increase progressive taxation in Britain. Today as part of her legacy we have purchase tax/VAT set at exactly the same rate as the basic income tax rate. Something which would have been completely unacceptable 40 years ago.

Flat rate tax benefits the rich, those who earn 6 figure sums, and impoverish the low paid, those people who work, still pay tax and then receive benefits because their pay is below a level considered to be enough to support a family. At the same time large companies are effectively handed cash in the form of lax enforcement of tax laws and the government topping up poor wages through benefits due to the minimum wage.

Which is precisely the situation we have at present where there is no flat rate income tax but in fact progressive income tax.

How would flat rate of tax help?
Prior to Thatcher top rates were much higher were they not and the up turn in inequality correlates with income yax being krss progressive.

Why not?

Because there is a minimum cost of living.

There is nothing intrinsically fair or just about equality of outcome. The concept is absurd.

We have a tax system in the UK that creates a major redistribution of income ie is highly progressive indeed we have the irony that under Tories the lowest paid have been the only sector that has seen pay (plus benefits) increase since the crisis.

Taxes work when they are simple to understand and cheap to administer. People can debate about the merits of progressive taxes. But structured correctly a flat tax can achieve all three and much better than the overly complex current tax system that is unfit for purpose

teamhurtmore – Member

indeed we have the irony that under Tories the lowest paid have been thr only sector that has seen pay (plus benefits) increase.

Gosh, poor people are getting richer under the Tories. I’m going to rush out and vote Tory next May.

Can you explain , with examples where it has worked, how a flat rate would be better.

I am sure they will welcome your vote Ernie seems like they need a few more. Even with eds x2 lacklustre efforts this week.

Yes but not now as on the train. Flat taxes are by no means perfect but they would achieve the standard requirements of taxation much better than the current mess.

High allowance. Low flat rate tax above that. Simple, effective and progressive. (but not perfect)

Flat rate taxation can be a radical alternative that may well create the kind of world which you seem to be after

Yes of course it might – you do strike me as the radical type after the fair and equitable distribution of wealth. Hilarious.
What sort of blinkers are required to think a flat rate tax leads to a equal society ?

It is not just a right wing dream

its so daft not even they want to entertain it.

Its pointless discussing as molly’s example showed the reason no one here seriously supports it and why it favours the rich by moving the burden to the poor
to be fair the way since thatcher has been to reduce income tax and increase indirect tax like council tax and VAT – as ernie graph shows

Noticed on the front of the Express that they’ve also promised to get rid of inheritance tax, that’ll surely get a few of the old frothers voting for ’em too.

Prior to Thatcher…..

Those halcyon days!!!

ernie
Maybe I wasn’t clear but I was referring to replacing progressive income taxation with flat rate.You have made also made my second point for me because Gordon Brown whilst angry that ” young nurse, the home help, the worker on the minimum wage” would pay the same rate of income tax as a millionaire had no qualms about them and the unemployed paying the same rate of tax when buying a table and chair or a bed or a bike or getting their car fixed or buying a bus or train ticket.
I’ll leave pasties out of it.

Taxes work when they are simple to understand and cheap to administer. People can debate about the merits of progressive taxes. But structured correctly a flat tax can achieve all three and much better than the overly complex current tax system that is unfit for purpose

Is that your best argument against progressive taxation? “It’s complicated”? Given that most people never have to calculate their own tax, I can’t see that as a disadvantage tbh.

Nick, you haven’t provided any evidence of why a flat rate tax is fairer. You’re just complaining about Gordon Brown. You’ll need to do better than this to win us over I’m afraid.

No inheritance tax and a flat rate. First time I have heard those nutters talk “some” sense.

You haven’t given any evidence either thm. I generally respect your opinion so I’m happy to hear your points.

Yes mol the current tax system is an ineffective mess. But remember a flat rate tax can still be progressive so your question needs rephrasing

Isn’t this just an unsustainable headline grabber ? I mean with everything that’s going on can we really afford to cut taxes ?

its so daft not even they want to entertain it.

Its pointless discussing as molly’s example showed the reason no one here seriously supports it and why it favours the rich by moving the burden to the poor
Ah, so now you want to shut down the discussion and are claiming to speak on behalf of everyone on here.
You have read the paper on The European Basic Income Allowance haven’t you Junkyard?

Tmh, enlighten me. Why is the current system effective? And why is a flat rate progressive?

No Nick discuss away but it will remain pointless on the grounds that it wont happen here ever- its purely a hypothetical debate – I made the reason pretty clear – it is almost as if you just want to have a go at me rather than explain how truly brilliant your system is to molly .

a flat rate tax can still be progressive so your question needs rephrasing

Its one of those it is technically true but only sort of

Basically if you give an allowance a flat rate tax is progressive but only just and it is essentially not

for example if we have an allowance of £1000 then some people pay zero – ie those on less than £1000 a millionaires nearly pay the entire flat rate on theoir income – the more they earn the closer they get. Given this you can claim it is progressive. However the point at which you pay tax we all pay the same rate hence why it is called a flat rate tax.
It a point of view on whether you wish to call this progressive but the word flat rate tax tells you what sort of tax system it is IMHO.
Its probably fairer to say flat rate tax and TRUE flat rate tax [ ie one without an allowance] rather than claim a flat rate is progressive.

NB pretty much any allowance even allows you to claim it is progressive even 10 p

YMMV and it can be argued either way.

Basically if you give an allowance a flat rate tax is progressive but only just and it is essentially not

Well that’s what I thought he meant, but how is that not simply slashing taxes for the rich and putting more on the lower-middle income people? That’s just wrong imo.

Have guests at home and waiting for dinner so

1. Current systems is highly progressive – just look at the stats
2. But it is massively complex, full of loopholes, extremely expensive to run and pretty inefficient.
3. In other words fulfils only 1 of the three functions of an effective tax sytem (google Mirlees report)

A progressive tax system is one wher higher earners pay more tax out of their income. As long as there is an allowance, a flat rate will be progressive. The higher the allowance the more progressive. So nice high allowance and then a flat rate above it. That would be better (but not perfect) that the current fiscal mess.

Bon apetit have a good debate!

Well that’s what I thought he meant, but how is that not simply slashing taxes for the rich and putting more on the lower-middle income people? That’s just wrong imo.

I agree flat rate taxes can only ever favour the rich [ and the very poor if they massively raise the allowance] and burden the “squeezed middle”.

Its not a fair way of raising revenue though as thm notes, it is easy to operate

IMHO the main objective of a tax system is to be fair and it fails massively on that front

But it is massively complex, full of loopholes, extremely expensive to run and pretty inefficient.

Talking about everyday people here – most of whom pay through PAYE.

The only loopholes I know about are things like contractors selling their cars to their companies etc – but I don’t see how having a flat rate would make a difference. Why would it? The complexity doesn’t come from the tax bands.

 

Can you explain , with examples where it has worked, how a flat rate would be better.

So thats a no then?
Just saying the current system isnt very good doesnt make an alternative better.

mt – Member
“Of course UKIP could promise you free holidays for life, but they’re not going to have to back up their promises with action.”

What like the Libdems?[/quote]
Yes only more so. Just before the last election the Libdems were polling over 30%. UKIP are currently 13%. They could offer the moon on a stick – and probably will.

£30000 personal allowance.
50% flat rate tax on all income above that.
No loopholes, no offsetting.

Progressive and flat.
and “fair” ?

If more revenue is needed take the flat rate up towards 60% or the allowance down towards 20k depending on the colour of your tie.

loum for Chancellor.

So thats a no then?

FFS is everyone’s Google broken ?

Can you explain , with examples where it has worked, how a flat rate would be better.

I’m sure the same was said when the idea of the NHS was proposed and opposed by much of the establishment.
Nearest is Jersey
There are lots of theoretical variations from rightwing free marketeers paradise to libertarian left wing Utopias.Lots of places already have it and even Germany and Greece are considering it.And as THM says it can be progressive ,warning Daily Mail quote so treat with caution
“Currently, the poorest fifth of households pay the greater tax burden. According to the Adam Smith report the poorest third of families pay 9 per cent of their income in income tax. Under a flat-tax they would pay nothing. Families of below-average income pay 12 per cent of their income in tax – under the new system the report claims it would be halved.

The report also argues that the flat-tax would remove the disincentive to work for those on benefits, because they would not be taxed for the first £12,000 earned.”
What should interest JY, ernie et al are flat rate Universal Basic income models linked with flat tax/negative tax like this http://www.basicincome.org/bien/pdf/dublin08/3aiiimarcmeurisbieu.pdf
The net is full of alternative economic viewpoints.

The economic powerhouse Jersey, **** me why did no one say?
Poland has it dont they, hows it working out for them? Mind you shouldnt be hard for me to ask a Pole.
What about iceland? How did they get on?

Currently, the poorest fifth of households pay the greater tax burden. According to the Adam Smith report the poorest third of families pay 9 per cent of their income in income tax. Under a flat-tax they would pay nothing.

You could do this under a progressive system.

The report also argues that the flat-tax would remove the disincentive to work for those on benefits, because they would not be taxed for the first £12,000 earned.”

and this.
I fact I dont see any of what you say being exclusive to a flat rate system