Wednesday, June 21, 2006

Flat Tax less regressive

In a move that will shock Neil Harding, Right For Scotland has shown, using actual spreadsheet calculations, that a Flat Tax would be considerably less regressive than the current tax system. (Cross-posted at Nightcap Syndication.)
The current model is a regressive model that means that the worst off in society pay proportionately more to the government in confiscatory taxes. This in turn prohibits them from contributing towards their old age increasing the pension crisis that the country faces.

Of course this is before we even examine the obscene practice that is the VAT model or the 80 odd percent tax on petrol that we currently “enjoy”, council tax or the plethora of other ways that government has found to tax your income more than once.

A Compassionate Flat Tax would stimulate economic growth while encouraging personal financial responsibility. It would pull hundreds of thousands out of poverty and encourage people back into work while providing the jobs for them to do. Pensioners would be rewarded for a lifetime of tax payment by enjoying a tax free retirement.

Since Neil has just written yet another post—full of his usual snide suggestions and unpleasant Communist insinuations—about how we should tax the rich more, he should welcome the move to a Flat Tax as proposed by Right For Scotland. Personally, I don't think that we should tax the rich more, but we should certainly tax them no less than the poorer people in our society.

Neil Harding: The Mouth of NuLabourNeil Harding: the Mouth of NuLabour, Political Bore and Economic Idiot driven by envy and fuelled by bitterness; this is a picture of his soul.
To reduce inequality we need to tax the rich.

You see, what I don't get with people like Neil is why they allow their rampant jealousy to show through like this, because that is all that it is. Since when have we set ourselves the goal of "reducing inequality"; what is the point? And when has it ever worked? Yes, everyone should pay their fair share, but those who get paid more shouldn't pay a higher proportion in tax simply because of this.
I think the vast majority of people in this country would agree that the 1% of the population who are paid (or pay themselves) over £100,000 a year need to be taxed more.

It is the snide insinuations like that "or pay themselves" aside that makes Neil's ramblings such unpleasant reading. The naked envy and insinuations of malpractice are simply unnecessary.
The practicalities of achieving this in a globalised world full of tax havens and tax avoidance schemes (and the UK is one of the biggest players in this tax avoidance/ tax haven market) are where the differences of opinion occur.

The simpler you make the tax system the less scope there is for avoidance: so, Neil should be in favour of a Flat Tax from this point of view too.
The Conservative party have always had the super rich onside and have moulded their policies to suit them but now, even the Labour party have pretty much come to an accommodation with the super rich in running this country, maybe they have had to, with the power the super rich have over the economy and media.

You see, for NuLabour apologists like Neil, things like the Loans for Peerages never happened. Neil, it isn't simply the power that the Labour Party need: it is the money. You might have noticed that the Labour Party needs money to run, and your average man in the street can't afford to give £2 million "loans" to them.

The same is true of the Tories, but then the Tories understand that businesses create wealth. The attitude of people like Neil is that businesses are just irritating, corrupt organisations whose evil machinations stop the nice government carrying on their pure and unsullied mission to keep the country running normally.

Let me spell it out, Neil: the government has no fucking cash but what it takes from wealth creators, OK? The Tories have traditionally tried to take the least and so businesses prefer to align themselves, quite naturally, with the Tory Party. NuLabour changed that when it wooed big business at the last election, but they stupidly expected that they could go back on their promises and still command the support of the business community.

Still, Neil doesn't seem to get it, and the rest of his post is the usual NuLabour spin and posturing. Oh, and total and utter inability to grasp even the very basics of economics. Still...
Contrary to how the press try to paint the parties, Labour is the party for the aspirational, the ambitious, the wealth creators...

Neil—I had no idea that you were a comedian!

UPDATE: RFS has published a correction to his figures; however, the substantive arguments remain correct.
Taking more money off of someone because they earn more is just plain stupid. Not as stupid as, say, publishing a bunch of figures from an ad hoc spreadsheet, but stupid none the less. It is also morally wrong to punish someone for trying to better themselves. As the Blessed Thatcher once said “You cannot make the weak strong by making the strong weak”.

Quite.

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