Why we need a flat rate of Tax

Great article in today’s Australian

 

…The moral case for a single rate of tax is even stronger. Yes, progressive income tax rates may well discourage effort and enterprise but they might encourage it too if people work harder still to make up for the rising rate of tax. Individuals should be treated the same regardless of what they earn. How can it be right to tax 38.5 per cent of a dollar of income above $80,000 but only 24 per cent of dollars below that level? It is an offence to procedural fairness and equity. In any case, a flat rate is not regressive -- higher earners still pay more.

Any reduction in revenue from a lower flat rate would be partly offset by the economic boon it would foster. Smart people employed servicing the tax would shift to jobs that produce goods and services people actually want. People would devote far less of their lives thinking about tax.

Makes sense to me, but the left will poo hoo it.

 

 

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Comments

[John Reagan]

1.

"Individuals should be treated the same regardless of what they earn" ... Who says? Are you really saying that the JP Morgan welfare queen Jamie Dimond should pay say 10%, while the barista that sells him a Starbucks should to? BS.

Any reduction in revenue from a lower flat rate would be partly offset by the economic boon it would foster ..Again, who says? What you are suggesting is that the extra cash that the top earners would recover would be spent and energize the economy. If this were true, then all that Reagan's 'trickle down' should have worked and it clearly did not.

But then if the economic boon (I think you mean boom...) would only partly offset the tax consequences you propose, then how exactly do you intend to make up the balance?

If this makes sense to you, you need to start thinking...but you right-wingers just ignore common sense and logic, don't you?

[Account Deleted]

2.

First comment "Poo Hoo'd" the post...I knew it wouldn't take long, but the 1st comment...

[Account Deleted]

3.

Quote
"But then if the economic boon (I think you mean boom...) would only partly offset the tax consequences you propose, then how exactly do you intend to make up the balance?"

Read the whole article Dumbnuts

[Anton]

4.

Technically, a completely fair system would be a poll tax. All people get the same rights and benefits from society, so they should all pay the same membership fee (that is the same $, not same %)

Of course, our system was designed to be unfair

[Michael F Smyth]

5.

I like the idea of a flat tax, but I fear that many people will still find ways to avoid paying tax, even if you reduce it to a flat rate.

Another issue - to play Devil's Advocate - is whether reducing Income Taxation to a flat rate would require an offset through increased indirect taxation (e.g. GST). While we could enjoy a boom as a result of reduced tax burden, until we get rid of the Greens-Labor deficit, a whole lot more taxation reform is required to restore equity to taxation, and to society in general.

[Michael F Smyth]

6.

"Freedom cannot exist where the people are overtaxed and overregulated" - Thomas Jefferson.

So, John, reducing taxation to a flat rate is unfair, is it? What's wrong with treating people the same?

[Oscar]

7.

Good luck trying to convince the public that things like Medicare should be shut down. Things like that would have to be made in order to make this 'small government' thing work.

And what about the ACCC? I think mandating two year warranties on items and giving the consumer rights is something that the public wants more of, not less.

[Michael F Smyth]

8.

Where exactly in either the article, or the comments on this thread, is a reference to shutting down anything, Oscar?

[Account Deleted]

9.

Keep on topic, pal.

[gwallan]

10.

"How can it be right to tax 38.5 per cent of a dollar of income above $80,000 but only 24 per cent of dollars below that level?"

The author of this piece is, like most journalists, mathematically illiterate or has little idea how individual tax is defined.

Tax, including medicare, on taxable income in percentage terms...

$81000 tax 19132 23.62%
$80000 tax 18747 23.42%
$79000 tax 18407 23.30%

The increase is relatively smooth and consistent. There is nothing unfair about this. Individuals don't suddenly go from paying 24% tax on their income to 38.5% in the manner inferred.

[Allan]

11.

Goodness me; one doesn't know what a boon is and the other mathematical genius thinks that it is fair that one person pays 38.5% tax while another pays 23.3% because the increase is relatively smooth and consistent.

Yeah, that should do it - relatively smooth and consistent justifies an unfair system. Everyone knows that.