The case for a single income tax

I have just received a massive tome (are there ever small tomes? Mini-tomes, perhaps) from the Institute of Directors, explains Simon Sweetman.

It is, it tells me, the final report of the 2020 Tax Commission. I thought there might be a cricketing reference here, with a substantial and long-tested tax system to be replaced by a quick and lucky bash at things. Oddly, this seems to be largely true.

It is an imposing document, over 400 A4 pages it has as a cover image a painting called The Payment of Taxes by George de la Tour. Wikipedia tells me that de la Tour painted mostly religious chiaroscuro scenes lit by candlelight, so perhaps this is meant to represent the commission groping about in semi-darkness. The painting is also known as The payment of Dues and is in the gallery at Lviv in Ukraine. I don’t think the England football team made a detour for it.

The commission is a joint project between the Institute of Directors and the Taxpayers’ Alliance. Now it is customary in these matters to set up some kind of balanced group of persons to consider, but interestingly it does not appear to say what the task set for the commission was. It leaps immediately to conclusions.

Continued...

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Comments

A bit leftie    5 thanks

ThornyIssues | | Permalink

Your comments seem to place you more left than the leftmost leftie.

There are other ways that wealth can be redistubuted other than handing dosh to an opaque and inefficient Government which is supported by a collection agency that has too much control over the delibarate creation of vague and woolly tax laws.

A good starting point

alan159 | | Permalink

I have not got through the whole document yet, although from a skim read of the abbreviated version, I thought there were some good starting points to discuss this idea.

I would favour the removal of lots of allowances and having just a flat rate on all income, likewise I think a ceiling of say 35-40% on government expenditure as a percentage of GDP is a move in the right direction.

 

Ignoring the bias in the    2 thanks

jackh999 | | Permalink

Ignoring the bias in the article, the current point about tax avoidance by using such schemes as K2 is as a result of current tax law being very complex.

A second issue is that thousands of HMRC staff are being laid off.which would imply that under current circumstances they will struggle to cope with existing tax law.

A third point is that tax evasion is considerable and needs to be tackled.

A much simpler tax system is therefore a legitimate idea which could lead to more tax being collected as a result of less complexity and therefore a reduction in loopholes overseen by fewer HMRC staff administer it all. 

I agree with Simon.    1 thanks

NigeC | | Permalink

The "commission" (who exactly commissioned it?) seems to be composed entirely of people who would prefer not to pay tax at all (strange that the FSB were excluded).  To those of us who agree with Oliver Wendell Holmes' statement "I enjoy paying taxes. With them I buy civilisation", it must appear that those who don't are in favour of barbarism.

They missed an obvious change

rbw | | Permalink

I can't think why they overlooked the obvious change of making pi equal to exactly 3.  That would also be a massive simplification, both for children and students and also - and more importantly - for British industry, giving it a competitive advantage and boosting exports.

 

You may think that's an over-ambitious remit but the Commission seem to have pulled off a similar trick with CGT.  They say:

"Removing Capital Gains Tax would not mean that someone
who starts a business, takes no income or dividends while building it up, and then
sells it for millions of pounds would not pay tax. While they would not pay directly,
the price they could sell it for would be depressed by the tax on the returns that
any purchaser would make."

That seems to me a quite miraculous result: CGT is abolished; no tax is paid to the UK Exchequer before the sale; but that's alright because someone else may pay tax later (unless of course they also roll it up in the money-box).

Holmes v Lord Clyde

ThornyIssues | | Permalink

NigeC wrote:

The "commission" (who exactly commissioned it?) seems to be composed entirely of people who would prefer not to pay tax at all (strange that the FSB were excluded).  To those of us who agree with Oliver Wendell Holmes' statement "I enjoy paying taxes. With them I buy civilisation", it must appear that those who don't are in favour of barbarism.

 

I prefer :-

 

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
Lord Clyde - Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764

Sweetman's Political Polemic

aristotle341 | | Permalink

This article merely promulgates a personal political opinion and tells me nothing about tax and nothing about the merits or demerits of having overall lower tax rates. Sweetman states: "In the last 30 years the rich have prospered enormously while the middle has gained slowly and those at the bottom have paid: this would be more of the same." Does this mean that the bottom are relatively worse off (compared to the wealthiest) or that the real-term living standards have declined? Also, I believe that the overall tax burden has gone up in the last decade (and perhaps even over the last 30 years) - so does an overall higher tax burden mean a more just tax distribution or better overall standard of living? The former does not entail the latter. So it is quite permissible to advance a case of a lower overall tax burden especially if there is evidence that it will raise the real-term disposable income levels of the poorest. I'm sure Simon can provide us with much useful insight into issues like these - after all, he is a tax expert. However, he is fundamentally wrong to imply that you have to be a tax expert to advance a tax policy - this is a political judgement - and he is fundamentally wrong to suggest that cutting government spending is somehow wrong to reduce the overall tax burden. Ultimately, voters will decide. So perhaps the moral from this article is simply that some tax experts seem unwilling to accept that THE OVERALL TAX BURDEN CAN GO DOWN AS WELL AS UP. And yes, this normally implies that government spending must go down as well as up. One can only assume that Sweetman prefers vodka to tea.

keep calm...    1 thanks

leon0001 | | Permalink

“which includes such ‘factual’ programming as The Great Global Warming Swindle”

Can we leave Climate Change out of this discussion - please. That subject gets plenty of exposure elsewhere. 

Political polemic and other stories

NigeC | | Permalink

Aristotle 341: "In the last 30 years the rich have prospered enormously while the middle has gained slowly and those at the bottom have paid: this would be more of the same." Does this mean that the bottom are relatively worse off (compared to the wealthiest) or that the real-term living standards have declined?

Actually, I think that logically it does. And it seems to be what has actually happened over the last few decades.

 

ThornyIssues: I almost laughed out loud at Lord Clyde's statement (Ok taken slightly out of context) that "the Inland Revenue is not slow". How things have changed since 1929!