Not the most ridiculous of policies

If you were Chancellor, what would you do?

I would simplify the tax system so there were no ways to get out of paying tax. I’d raise the threshold at which you start paying income tax and make everyone pay the same standard rate – probably around 30 per cent.

I think the Government would make more tax revenue overall because there would be fewer tax dodgers. Also, by raising the threshold, more people on low incomes would be taken out of tax, so I think it would be fairer.

Indeed, I recall a proposal from Madsen of exactly this – well, near exactly, the tax rate was 33%.

18 thoughts on “Not the most ridiculous of policies”

  1. Indeed. He’s pointed out most of the faults with the current caper – complexity, incentives to avoid, and people still in range of welfare benefits paying income tax (all 3 types).
    A think tank or chancellor would add more detail, but this is good from Fox.

  2. What is your number one financial priority?

    Security for me and my family. I don’t think it’s the Government’s job to look after me.

    Make him chancellor!

  3. “I would simplify the tax system so there were no ways to get out of paying tax”

    Ha ha ha. The man is a fool. Even with a land value tax, a tax that is simple to assess, you can avoid tax by not owning any land

  4. I’d raise the threshold at which you start paying income tax and make everyone pay the same standard rate . . .

    You don’t make everyone pay the same rate by excusing a vast swathe of people from paying anything at all. Indeed, that vast swathe paying nothing into the system are the very ones who will always vote to keep the rich paying more.

    . . . so there were no ways to get out of paying tax.

    Not really thought this through, has he?

  5. Simplification is likely to lead to lower revenue. Think about it: why do we have complexity in the first place? Yes, there’s the lobbying of special interests (rife across the pond); but in the UK for the last couple of decades it’s because a smart-arse chancellor has found yet another way to pluck more feathers from the proverbial goose without too much hissing.

  6. ‘I would simplify the tax system so there were no ways to get out of paying tax. I’d raise the threshold at which you start paying income tax’

    Cognitive difficulties.

    ‘Also, by raising the threshold, more people on low incomes would be taken out of tax, so I think it would be fairer.’

    Fairer. Some people pay tax; some don’t. It’s fair, I tellya!

  7. Diogenes,

    “Even with a land value tax, a tax that is simple to assess, you can avoid tax by not owning any land”

    But if you’re living on it, you’re still going to be paying via rent.

    it’s also about the most moral tax, you pay for something the state provides for you, which is access to highest value locations. Amazon shouldn’t pay much tax because the state does almost fuck all for Amazon.

  8. You pay income tax on every penny, but at 10%. Ditto inheritance tax. VAT at 10% too, if you insist.

    Add a Land Value tax, a better CGT, and some sort of sumptuary taxation, and then shrink the state so that it has enough income to meet its outgoings. Simples.

  9. GDP is, by definition, all incomes. It’s also all consumption. So, VAT at 10% on everything – everything – and tax of 10% on all – all – incomes gives you 20% of GDP. -ish.

    You can run a country on that. Even with a sketchy welfare state. Some places do that too. What you’d have to drop is most of the income redistribution that is done.

  10. If we’re starting with the current system, I’d:
    * merge National Insurance into Income Tax
    * with the existance of a minimum, tie the income allowance to it, so a full-time minny pays zero income tax.

    Everything else is really just fiddling about. Ideally, I’d scrap everything and start from scratch, but that’s not where we’re starting from. Maybe an option for a brand new country.

  11. PJF

    Agreed. Flat rate, no allowances. Ie, move away from the concept of a tax code and simply have payroll knock 20% (or more including NI, whatever) off anything that is paid to staff (eg, to any “non Limited” and all Ltds must apply that process) or whatever process stops easy avoidance. Transition to allow salaries in certain sectors to adjust.

    Nice and simple and you get rid of all the “earn up to” disincentive nonsense. Start from there, the objective being to put the majority of orange and yellow stuff on the bonfire.

    Andrew M

    “Simplification is likely to lead to lower revenue.”

    You’re selling it to me.

  12. @dearime,

    I’m with you on no allowances and 10%. People tip 10% without complaint.

    Incidentally, a 20% marginal tax rate is 10% overall if you earn under the present system exactly double the tax-free allowance. After that it gets more.

    Benefits should be taxed, so the recipients know what it feels like.

    A law that states that if taxes go up or down, they go the same way for everyone would help.

  13. “A law that states that if taxes go up or down, they go the same way for everyone would help.”

    Agreed. I’d like to see a constitutional amendment (U.S.) requiring taxes to be general*, and levied in equal amounts or equal rates**.

    *General, meaning apply to most people. None of the funky targeting. Taxing authority derives from paying the government’s expenses. It does not exist to manipulate citizens’ behavior. Petrol taxes, alcohol taxes okay, because they are paid by much of the population.

    **Tax everybody the same. People have the right to be treated equally under the law, including tax law. If >5% is a problem for some people, don’t charge more than 5%. The “rich” (a word government should never use) should pay at the same rate as the poor (ditto). Rich and poor are arbitrary words of relative meaning. Government should not use arbitrary words of relative meaning.

  14. ‘Simplification is likely to lead to lower revenue.’

    Ay, there’s the rub. Think of dear old Zim. The economy was stabilising because the government didn’t print money. Then Muggins died and Mnangagwa wished to seize power, so he had to get the establishment on side. Thus he had to start up the presses once more.

    And so here we go again.

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