Yay! for complicated tax systems!April 14, 2012 Tim WorstallTax8 CommentsFor they increase human happiness by allowing tax avoidance! previousMan who wants job protecting ConstitutionnextIn wihch the St. Louis Fed agrees with Timmy 8 thoughts on “Yay! for complicated tax systems!” Ivor April 14, 2012 at 3:43 pm I like it. Of course Polly has admitted in the past that she’s only happy to pay more tax if EVERYONE pays more tax, and surely that causes us a problem here? A complicated tax system allows tax-averse people to pay less tax, and this causes people who might be less tax-averse to become more tax-averse? Nick Luke April 14, 2012 at 4:08 pm Being firmly of the penny scrimping, chimney scraping school of thought, it never ceases to amaze me, year on year, that my tax specialist accountant saves me £££ but, strangely, his bill comes to almost the same amount… I am clearly an innocent in these matters. Tim Newman April 14, 2012 at 4:12 pm So Brits got 1,000 odd pages happier under New Labour? Ian B April 14, 2012 at 5:26 pm Old Left: Rich people should pay more tax and subsidise the poor. New Left: Everyone should pay more tax, particularly poor people who need dissuading from sin via tax punishment. Right wing: Shift the burden from rich to poor; rich people create wealth, poor people need dissuading from sin via tax punishment. Libertarian: Everyone should pay as little tax as possible to fund an agreed amount of government. Tax should be as simple and fair as possible. I’m in category 4 there. It is hard to decide which out of 2 and 3 is the most evil. Adrian April 14, 2012 at 5:36 pm Ian, you can add another category: Ritchie: tax systems should be vague and complex enough to justify more jobs to tax officials and to give the BBC reason to call Richard J Murphy for his opinion. PaulB April 14, 2012 at 6:26 pm I agree with Polly Toynbee (not a statement you see very often in these parts). I think it’s more important to reduce the marginal rate of deduction for poor people that the marginal tax rate for rich people (I think that means I agree with Iain Duncan Smith too). But seeing higher earners paying less than I do makes me more tax averse. Tim adds: “I agree with Polly Toynbee (not a statement you see very often in these parts). I think it’s more important to reduce the marginal rate of deduction for poor people that the marginal tax rate for rich people” Hell, even I agree with that. In fact I’ve been arguing for it for some years now. The thing is though, Polly doesn’t argue for that. If she did she wouldn’t have written a column decrying the rise in hte personal allowance. whie higher earners do indeed benefit from this it doesn’t reduce their marginal tax rate one iota, does it? For John77 April 15, 2012 at 5:16 pm I cannot read the underlying paper just the abstract, so I am basing the following comment on that. There is a fallacy: that all the state income needed to meet the spending desired by the recipients can be met by taxing those willing to pay at less than their upper limit of acceptable taxation or 100% of income (whichever is the less). My tolerance of taxation declines when my marginal rate exceeds the top rate on higher incomes: it got quite low under Blair/Brown when I was working part-time because my wife’s job had higher moral value but less financial reward than mine my marginal effective rate got to *more than twice* that for Cherie Blair or Sarah Brown. If that applies to other people then the whole thesis breaks down because it treats a variable function as if it was a constant. PaulB April 15, 2012 at 8:58 pm Sorry Tim, I was unclear. I meant that I agree with Polly Toynbee about being willing to pay high taxes if everyone else earning at least as much as me has to pay them too. The rest was to explain why I’m willing. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.