"Single Income Tax"- good idea, or fiscal suicide?

Discussion in 'Economics' started by CasinoBoyale, May 21, 2012.

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  1. Today, the Taxpayer's Alliance and Institute of Directors published a joint report, advocating a single rate of 30% to be charged for everybody earning above £10,000 P.A., and the abolition of employee's National Insurance and (as far as I can tell at first reading) Capital Gains Tax on private citizens.

    To my mind, it makes the system a great deal more transparent and simple, and puts more money in the pocket of the majority of people; whilst the headline basic rate of income tax is 20%, when NI is taken into account, the effective rate is nearly 40%. However, it will necessitate a fall in government spending (or an increase in borrowing), and by extension the shrinking of the State, something I understand some people feel strongly about (not me though- beyond the Armed Forces, NHS, Diplomatic Service, Foreign Office, Police, HMRC, and Education, what bits of the State do we really need?).

    But never mind what I think, what do you, the denziens of ARRSE think? are they right, or are they crypto-Thatcherite ideologues seeking to destroy the iron grip of the State over everyday working people?

    Report here

    Op-ed in the Grauniad here
  2. It's incredibly fair.

    In countries where it has been adopted tax avoidance & evasion has reduced dramatically. ...thus increasing total tax income.
    • Like Like x 1
  3. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    All very well saying 30% & no national insurance but pensions are not liable to NI & anyone of pensionable age does not pay NI on earnings of any kind. I've listened to some commentators today & non of them, so far, have picked up on it being a 10% tax increase for pensioners.
    • Like Like x 1
  4. What ever the state loses in NI or income tax they will either just up VAT or bang more duty on Cigs, Beer and Fuel!
    It's a con just like all the other so called tax simplification measures they dream up.
    The rise in the price is to make more money for those with plenty, and the tricks of the trade are to keep the hungry bellies empty!!!
  5. Yes, however you'd have more money in your pocket to start with, how you spend it or not is then up to you.
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  6. Quote from the report:

    The overall economic results would be impressive. Dynamic modelling by the
    Centre for Economics and Business Research (CEBR) has found that, if the measures
    were introduced with no spending cuts:
    ■■ After five years, GDP would be 1.8 per cent higher; business investment
    would be 14.6 per cent higher; and public sector net borrowing would
    be £23.1 billion a year higher.
    ■■ After 10 years, GDP would be 5.9 per cent higher; business investment
    would be 26.0 per cent higher; and public sector net borrowing would
    be £6.9 billion a year higher.
    ■■ After 15 years, GDP would be 8.4 per cent higher; business investment
    would be 61.2 per cent higher; and public sector net borrowing would
    be £35 billion a year lower.

    Sounds good to me!

    Attached Files:

  8. When I first heard this I wasn't aware they were proposing to bin NI at the same time. For me as a 40% taxpayer it would have made me about £4K worse off. However if we lose NI everyone on basic rate tax would be a little better off. Higher Rate taxpayers would be significantly better off against current income taxed at 40%.

    I presume they make the money up with the genuinely high earners no longer bothering with avoidance schemes?

    Seems like a nice headline grabber but the Govt will still have to take what it needs, so expect more indirect taxes like VAT, fuel duty, moustache tax, window tax........
  9. unless they are currently liable to higher rate tax in which case its debatable.

    I like the idea now. How about we do it but I get a referendum on it in another 15 years :)
  10. Problem is of course that when you put 10 economists together you get 11 different opinions, so what about just telling the Rothschilds and their mates that the game is up and we no longer intend to pay any interest on their phantom money and that we are going to revalue the realm and start from scratch. Hard times for us but our grandkids will be grateful...it was us that spent it after all.
  11. Further quoting from the text, showing extent of all proposed tax reforms and proposed timings (adapted from table 1.2):

    - Increase the transparency of Employers’ National Insurance (2013)
    - Merge Income Tax and National Insurance and cut the rate to 30 per cent (2016)
    - Replace Corporation Tax with a capital income tax (2016)
    - Abolish Inheritance Tax (2013)
    - Cut Fuel Duty by 1p a litre per year over 5 years (2014-2018 )
    - Abolish Air Passenger Duty (2013)
    - Abolish Capital Gains Tax (2013)
    - Abolish stamp taxes on shares (2013)
    - Abolish Stamp Duty Land Tax (2013)
  12. Boldnotold

    Boldnotold LE Book Reviewer

    Think of the money to be saved on Civil Servants at HMRC!
  13. The ideology of what constitutes 'fairness' is what stops a single tax rate being widely adopted.

    Make 30K pay 3K, make 3million pay 300K. The more you make the more you pay, the less you make the less you pay.

    What's not fair?
  14. ugly

    ugly LE Moderator

    Well if they got rid of the EU our overall tax burden would drop. ****ing simples, me for Osbornes job.
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