The threshold for income tax should be the median wage for full-time work (currently about £23,000 per annum), with tax thereafter at a flat rate with no further exemptions or allowances. That this would mean the same rate for everyone does not, of course, mean that it would be the same sum for everyone.
It does, however, mean the unaccustomed arrival of a tax bill for those whose only current relationship to the taxation system is that of being bailed out by taxpayers when they look like becoming so poor that they might join our number.
There are many uses to which the vast revenues thus accessed for the first time might be put, not including, for example, nuclear weapons, or wars in Afghanistan and Iraq, or bailing out super-rich non-taxpayers in order to keep them super-rich and non-taxpaying.
One such good use would and should be the amalgamation of all current Social Security payments into something called, and providing, Social Security, and guaranteeing that no one's income ever fell below half the national median wage for full-time work.
Both this new tax system and this new benefit system would be dazzling simple to understand, and would cost next to nothing to administer.
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Interesting. What do you propose as the flat rate?
ReplyDeleteRight now, I haven't a clue. But it's the principle that matters.
ReplyDeleteHow about a ballpark figure? 5-10% 20-30% 70-80%? It will make quite a difference.
ReplyDeleteNot to the principle of the thing.
ReplyDeleteI'm also in principle opposed to tax rates above fifty pence in the pound. But if we got rid of all the exemptions for the super-rich, then nothing like that would ever be remotely necessary, anyway.
"But if we got rid of all the exemptions for the super-rich, then nothing like that would ever be remotely necessary, anyway"
ReplyDeleteReally? How much does the Exchequer lose through these exemptions then? Ballpark figure?
How much are you prepared to pay for the principle?
ReplyDeleteTable 5.12 of the ONS' Social Trends report gives a breakdown of the number of tax payers in each income bracket and the amount and rate of tax they pay. From this we see that there are c.31 Million taxpayers paying c.£155 Billion in tax.
Based on your idea of paying a flat rate of tax for all earnings above £23000, it seems that if your flat rate were 20%, then you would have a shortfall of over £100 Billion on current income tax receipts. Conversely, to match current receipts, your flat tax rate would have to be 67.5% - well above your principled threshold.
They'll be on any minute now. How dare you suggest that we pay tax! Do you know who we are?
ReplyDeleteThey are already here, James. And I know exactly who they are. Since the bailout, they are the dependents of the rest of us. But then, in all sorts of ways, they always were. It is now only even more starkly apparent that that is what they are.
ReplyDeleteLiz seems to think that the problem does not exist, so we can dismiss her airy little heiress head and get down to serious business without her.
Wisdom, there are other forms of taxation, you know?
Actually, James, under David's scheme earners over £100,000 could very easily end up paying substantially less in tax. This is why the actual rate matters almost as much as the principle.
ReplyDeleteHe probably doesn't. Even though they are the only ones he pays. With no need of a job, he certainly doesn't pay NI. But only income tax is really tax, you know. That Thatcher was cleverer than she looked.
ReplyDeleteAh, well OK then. What other taxes are you going to levy? Sales, property, corporate, CGT, poll, excise, duty?
ReplyDeleteNo, Bates, under my scheme they would pay anything at all, unlike now.
ReplyDeleteAnd who are these "earners"? How about "people who are paid" that sort of money? That is more like it.
Paid out of the public purse these days, I might add.
Yes, Wisdom. I don't where you got the idea that I had suggested abolihsing any of these, all of which currently exist. You didn't know that, did you? Nurse, more claret!
ReplyDeleteYou drink claret. I have seen you.
ReplyDeleteBut I charge it neither to parliamentary expenses nor to the account of what is now basically a fake company kept going at public expense.
ReplyDeleteDavid, if you keep all other forms of taxation at the same rate, never mind not abolishing them, your scheme still needs to bring in £155 Billion in order to keep the status quo. You've obviously put quite a lot of thought into this, and I'm genuinely interested in it - I like radical ideas. But do you intend to
ReplyDeletea) take less income tax and cut government spending
b) take less income tax and raise other taxes or
c) set your flat rate to a level which matches current income tax?
"David, if you keep all other forms of taxation at the same rate, never mind not abolishing them"
ReplyDeleteWho mentioned that?
I think you've misunderstood Wisdom, David. He's only talking about the current income tax levels - he didn't say anything about abolishing other taxes.
ReplyDeleteNo, "who mentioned that, you workshy drunk"?
ReplyDeleteThe real Frank Gallaghers are not on Manchester council estates.
No, Stanley, but he thinks that I did. Cocaine, I suppose.
ReplyDeleteChris, they'd cost the rest of us a hell of a lot less if they were.
Sorry David, I'm not clear. Are you taking less tax or more?
ReplyDeleteIt doesn't matter. It's the principle.
ReplyDeleteThe tax take would vary enormously from year to year, decade to decade, depending on what the government of the day did or did not want to do. But the principle would remain the same.
The principle of people like Wisdom paying tax, and of no one in this country being incomparably poorer than he, though probably paying the tax that he didn't.
The second bit is what they really object to. The idea of no one being obscenely poorer than them. That's what gives their lives meaning.
ReplyDeleteDavid, I would really appreciate if you could list all the evidence you have that I don't pay tax.
ReplyDeleteYou've already done that yourself.
ReplyDeleteOh, and in reference to James' comment, allowing your blog to host unfounded and vacuous insults in place of actual debate does not reflect well on you.
ReplyDeleteYou'd know.
ReplyDeleteYou don't seem to know when you're beaten, though.
From that last one we now also know that he's New Labour not a post-Thatcher Tory. We are building up quite a picture of him.
ReplyDeleteNo, New Labour really don't like it when they are told that they hate and persecute the poor, and thoroughly enjoy doing so. But they do.
ReplyDelete"You'd know"
ReplyDeleteWhat is this meant to mean? That I can spot baseless insults? Yes, I can. That it doesn't look good when you encourage them? I know that too.
And I'll let your readers judge when I'm beaten, thanks.
You're beaten.
ReplyDeleteYou can't cope with anyone you can't sack.
But we are the masters now. It is very high time that we acted accordingly.
ReplyDeleteWhich brings us back to the original post.
David, you do know that sometimes, when people disagree with you it's actually you that's wrong? Not every time, but sometimes.
ReplyDeleteWhen was the last time that happened to you?
Never on here.
ReplyDeleteWisdom decided you'd said something completely different and then laid into him. You and James are right, he really is New Labour.
ReplyDeleteOh, yes. He decided I'd said something that he was capable of understanding, even though what I'd actually said was perfectly simple, though clearly not simple enough for him. So yes, he really is New Labour.
ReplyDeleteNew Labour can't do simplicity, least of all where tax and benefits are concerned.
ReplyDeleteAnd you may as well speak Cherokee to them as suggest that something is about the principle rather than the devilish detail. They have no principles, only devilish details.
This is a brilliant idea, David.
Thank you, Steve.
ReplyDeleteThat's New Labour of all parties, I trust you'll agree.
Yes indeed. Although I trust you'll agree that George Osborne doesn't exactly have a brain for detail.
ReplyDeleteGeorge Osborne doesn't exactly have a brain at all.
ReplyDeletePerhaps he should apply to be the Labour candidate in NW Durham?
ReplyDeleteWrong chromosomes. Right underwear, by all accounts. But wrong chromosomes.
ReplyDeleteStill, do expect that candidate to be a cocaine addict who thinks herself far too grand to have to pay tax, and whose greatest pleasure in life is the knowledge that other people are so much poorer than she is.
They really couldn't see that what you wrote was about the general principle, not the specific figures?
ReplyDeleteApparently not.
ReplyDeleteAs Steve says, they don't have principles. The idea is lost on them.
And they really do just assume that if they speak, then that that is the end of the matter. They have no concept of being taken on, and absolutely no idea how to react if they are.
So no tax income below national median earnings (however much at the given time), a flat rate with no exceptions above that, and no one's income to drop below half that?
ReplyDeleteHow is that hard to understand?
It isn't.
ReplyDeleteI would suggest that Wisdom was being ironic when he called himself Wisdom. But we can rule out that possibility. He probably thinks that irony is what the char or the valet does on that funny board thingy.
If it isn't the SW1 think tank orthodoxy they can't get their heads around it.
ReplyDeleteDavid, I'm a senior Treasury official and you should know that your post is being taken very seriously indeed.
ReplyDeleteDavid, I think this is a brilliant idea. Everyone would get to keep their first £23,000, tax free - benefiting those on the lowest incomes most, and those on the highest incomes least, so they will have to pay their fair share for the first time. A truly progressive tax policy.
ReplyDeleteI should say (in the interests of full disclosure!) that I have a proper job, and I do indeed pay tax - my salary is a little above median income, so I would pay tax under your plans too, although I think it would be a lot less, depending on the rate. Since you will be taking much less tax from the poorest, you will have to take a lot more tax from the richest to make up the shortfall. I think a figure of a 67% flat rate, at current spending levels, was suggested earlier in the thread. This sounds about right to me, although I imagine that you would hear a lot of squealing (or pips squeaking!) from the affluent, whose taxes would skyrocket. Obviously we can discount their concerns, since I agree with you that they are simply overprivileged, undereducated idiots who have never had to do a day's work in their lives, and who should not play any role in political discussion.
I honestly think that they should give you a column in the Economist. Perhaps they already do, since all of the Economist's writers are anonymous. Anyway, you should certainly be given a platform which reveals your talents to a wider audience - you're wasted here. If the general public heard this, they'd sweep you to power.
Anonymous, if only!
ReplyDeletePhil, you are very kind. I haven't read The Economist for years. There was a reason why I stopped, but I have forgotten what it was. Perhaps I should give it another look.
My only worry about this idea (which, as I say, I like very much) is that it would involve a massive tax rise for those who earn significantly above median income. They're a minority, but there are still millions of them. They won't like it. How do you think anyone would be able to push this through politically?
ReplyDeleteThe comment just above reminded me to ask have you ever considered doing an FOI request about information held about you or referring to work you have done by central government departments?
ReplyDeleteThe security services probably won't release your file, but most other depts release details of the work civil servants have been asked to do about you or your work. It's always interesting what you find, certainly was in my case.
Erv, I have rather more pressing calls on my time.
ReplyDeletePhil, what would they do? There really aren't all that many of them, most of them live in safe Tory seats anyway, certainly none of them is any sort of swing voter, and they only want to live in or near either London or New York. Quite a number of them would never be let into the US (Arabs, Russians, &c), and have indeed already been refused entry to that country. So they are stuck with us. Not the other way round.
"Erv, I have rather more pressing calls on my time"
ReplyDeleteIt's really very easy - you write an email to every central govt dept (the same email apart from the address) asking them formally under FOI for any emails, documents or minutes that refer either to you by name or to any work considering proposals that you have first announced, including but not limited to: this blog, the BPA website, comments on the spectator and comment is free blog, articles on the first post magazine. And ask for confirmation of receipt.
That's it! then you just sit back and see what you get.
I might, I suppose.
ReplyDeleteThere are literally millions of them, and they nearly all vote. More to the point, they control the media (pretty much all of it, other than blogs), industry and the financial markets.
ReplyDeleteI love your idea, but I think they could strangle it at (or even before) birth.
Yes that's a good idea - I did it too when I was supicious about some of the noises coming out about future uses of energy which looked similar to some articles I had written. It was really interesting to see what Ministers and advisers had asked civil servants to do. We know now where they get their ideas from - bloggers!
ReplyDeletePhil, just how rich are you talking about? As for voting (which peers can't), they mostly vote Tory regardless, the rest are tribally and viscerally Labour or Lib Dem for personal or family reasons, and most of them live in safe Tory seats.
ReplyDeleteConor, there are a lot of ideas knocking about. And in any case, why object if something like your suggestion is implemented? Isn't that why you made it? If not, then why did you?
People on, say, £40k or more, who I think would lose out under your proposals (rightly, I think, but they'd be annoyed). They make up about 10% of the population.
ReplyDeleteLeaving another ninety per cent. Anyway, how many of them are electorally important, frankly?
ReplyDeleteAnd it would depend on the rate, which is not the point. The principle is. Most people on forty grand aren't massive tax-avoiders, because they simply can't afford to be. So they'd be better off, like the rest of us.