Imagine flat rate income tax at 30%

That would put the Great back in Great Brexit. 

I think this is probably a myth, there's something to be said for simplification and steady rules but in a complicated far more open world (compared to pre 90s) there are a lot of different levers at work


The thing that would really make a difference is to simply tax codes such that tax evasion becomes massively more difficult.  AIUI this is precisely the case in HK and Singapore. 

Plus, put the same rate of tax on all income (capital gains, rent etc).  

That might not put the Great into Great Brexit but would certainly go a heck of a long way towards the perception of fairness.  

Yes, obviously the best time to try experiments of this scale is when the markets are already spooked and the economic situation is, to be generous, highly precarious.

I have always had difficulty with flat rate income tax. On the surface it seems completely fair. Assuming 20%, if you earn £10k you pay £2k, if I earn £100k I pay £20k. Therefore I pay more.

The economists on here will tell me that's too simplistic no doubt.


Yes, but think of all the tax lawyers and tax advisors who would be out on the street in a simplified world.

Chambo, leaving aside the overall efficacy of the concept of flat rate taxation one of the major problems as I understand it is the fairness on the low paid.

Although 30% might seem very fair for a higher rate tax payer it would be crippling for someone on minimum wage.

If you then say that the 30% rate would only be charged on incomes over a certain level that then gives you a cliff edge that would discourage earning above that amount.

if those fvckers in the labour party get in, i'm seriously considering relocating somewhere sunny: got the location sorted, got the job sorted.  if they win and pencil in an emergency budget i'm booking a one way ticket out.  rest can follow


Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59. 
So, that's what they decided to do.
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer. 

So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving). 
Each of the last six was better off than before with the first four continuing to drink for free. 

But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!" 
"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!" 

"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!" 

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up. 

The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill! 


Yes, let's ignore the diminishing marginal utility of income and completely fook the poor. 


The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill! 

If the tenth man got rich by selling say Teslas and iPhones to the other ten (and thousands/millions more) it's by no means unreasonable to expect him to pay towards the society that enabled his customers to buy his products.  

Roger’s allegory doesn’t work, as once the 10th man takes up a new job offshore, the 9th man gets the 10th man’s old job, and so on all the way down the chain, and a new 1st man joins the workforce. 

Now, they may still beat the new 10th man to a pulp every now and then when they’re feeling aggrieved, but the bar bill still gets paid.