On the glory that is Richard Murphy

Ritchie reads a paper on the outcome of the Romanian flat tax.

It’s not a surprising finding – but it’s good to have it confirmed that flat taxes are unambiguously regressive.

What a glorious statement.

One flat tax in one country is regressive compared to the previous tax system in that country. Therefore all flat taxes in all countries are regressive compared to all other tax systems.

Just for the avoidance of doubt here, let us offer a small model.

Take the current UK tax system.

Now replace it with a flat tax (of, oooh, say, 50%) and a £22,500 personal allowance (roughly the median wage).

It would be very difficult indeed to state that the latter is regressive in any manner at all: especially as it would be vastly more progressive than the current system.

9 thoughts on “On the glory that is Richard Murphy”

  1. * up to £x amount, and then 50% thereafter, no?

    Not sure quite how I managed to balls up posting that comment, sorry.

  2. PC, although they doesn’t accord with the strict meaning of “flat tax”, most such schemes include a tax-free allowance. It’s a common mis-use of the term.

  3. And I’m not sure how I meandered between singular and plural in there!

    “although they don’t accord “

  4. I agree, Ian – but it’s the kind of thing that Dicky Murphy will bring up, and then wail on about how Timmy is incorrect about everything else as a consequence.

  5. It’s a statement of the bleeding obvious that the benefits from reducing tax administration will largely flow back to those that pay the most tax already. Ritchie thinks it’s fair for 5% of the workforce to contribute 60% of the tax take (he twittered about this yesterday). That’s in itself reason for him to veto the entire idea of a flat tax.

    So he cares so much about the poor, he’d rather keep them there than do anything to help them, just because it would help rich people more.

  6. My guess is Richie would say that, even with a generous personal allowance, the value of a marginal pound to a low end taxpayer is much greater than that of one to a high earner. This he would then go on to argue justifies punishing the high earner more than the low paid.

    I must admit I can’t see the sense and/or justice in this argument, but I’m sure Richie would be able to explain his position to us if he were here.

  7. This is the difference between wanting to make everyone equal and wanting to treat everyone as equal.

  8. Correct. It all depends on
    a) With what you are comparing it
    b) How high you set the personal allowance. I’ve never heard of a flat tax proposal yet which didn’t start off by proposing a much higher personal allowance.
    c) What the actual rate is
    d) Whether there are any other tax breaks swimming around that skew it one way or another.

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