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Flat tax Sep 30

There’s a lot been written recently about flat tax proposals. Too often flat tax options have been deliberately muddled with tax cutting. It would be possible to introduce a flat tax at a sufficiently high rate that the total income tax take remains as it is now, but many of those proposing flat taxes sneak tax cuts in at the same time, muddying the issue.

The Tory Cornerstone Group, though, are fans of tax cutting and make it clear that their flat tax would cut taxes, helping "millions of low-paid workers and pensioners."

They propose a £10,000 personal allowance and a 22% overall rate. That’s the same as the current basic rate, so let’s guess who would benefit most from this. Is it "millions of low-paid workers"? Or is it folk who currently paying top rate tax? Is it possible that those getting the greatest tax savings would be the very richest? Here’s a rough graph to give you a clue.

Graph of flat tax and current tax rates

Can you tell who it is yet?

One Response

  1. 1

    I sort of agree with you. I think shroeder has shown why this will never fly in a western european election. the cleaner paying the same as a millionaire is just to good a strap line. also the huge surge in collections that proponents claim for it is already well in an emerging east european economy but slightly different is a sophisticated western one. however I do think the problems with flat taxes should not make us rule out flater taxes. for instances the fact that anyone earning the minimum wage should be paying income tax is absurd. higher personal allowances are a progressive tax cutting measure much used by (oh my god) nigel lawson and cutting personal allowances are regressive much loved by gordon brown. I’m pleased the lib dem tax commission is looking at this.