Flat Tax

[Porty]

As an Economics graduate, I would have given this idea short shrift. Basically because it won't raise enough revenue and seems guaranteed to widen dc cairn's gap (if you pardon the expression).

Yet it appears to be working in quite a few economies. Can it work here?

[Dadaist]

I wonder what rate Paxman would set it at.

http://en.wikipedia.org/wiki/Flat_tax

"Can it work here?" is an interesting question but, having read the above article, the global implications interest me more than the national ones.

[Novastar]

Take it you were both watching newsnight last night as well.

Seems to be very good for the poor and the mega rich (<£12K and >£150K). It's the middle band that suffers unless they can get the money from somewhere else. and that was a lot of water that didn't go in last night. I think one of the countries they mentioned (not Estonia or Germany but the other one) got it from raising business taxes quite considerably. Not sure how the others have done it.

Found the American bloke very funny. Typical Neo Conservative who would probably benefit highly from something he's doing "for the good of the people".

[xxxx]

Yet it appears to be working in quite a few economies.

The good fortune of the countries cannot confidently be ascribed solely to the flat tax as they have undergone so many changes recently. Totalitarian Capitalism seems to be working for China, perhaps that's the real secret to prosperity?

Can it work here?

It would be an extremely expensive experiment to undertake without concrete proof.
Like most ideas from the Adam Smith Institute (who derive most of their income from the governments they so despise), this one should be examined using a pair of tongs before dropping it in the bin.
the fact that they proffer an unrealistically low figure(22%) for the flat tax shows that they are not plain dealers.
The replacement figure (ie one to provide equivalent govt revenue)of 37% for incomes over 12,000 would mean that most people would in fact become higher rate tax payers. The extreme shelving from 0 to 37% would require a massive restructuring of transfer payments so you would most likely create a large number of higher rate taxpayers with greater welfare dependency. The cost of these changes alone would be considerable.

[Porty]

It would be an extremely expensive experiment to undertake without concrete proof.

Not to mention the costs and implications if the experiment failed. Concrete prrof is not going to be available. It never is in economics.

[mr magnolia]

There's lots of flats in Edinburgh...

[Porty]

Kwik Fit have made a fortune out of them.......

[Pal of Porty]

The only thing flat around here is the jokes!