Income / Wealth Tax Simplification
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I once wrote a mod for Quake that allowed fiends to run along walls and ceilings in the manner of aliens in the Alien Versus Predator game. The code worked pretty well, apart from one part: how to decide which angle to draw the fiend facing.
That bit of code was a nightmare. I threw everything at it - I hacked and hacked and hacked, adding tweaks here, taking away angles there, guestimating everywhere. It was a total mess, an utter botch job, with lines cancelling each other out, doing the same thing twice, with arbitrary decisions taken as to where and when which angles should be set how. It worked, after a fashion, but not very well, and really not very efficiently.
Is this reminding you of anything yet?
You probably know already that there is more tax law in the Commons library than one person could read in a lifetime. This strikes me as a little bit silly. Combined with the vast number of different means-tested (or not) benefits available, it seems that the current tax and benefits system is much like that fiend drawing routine.
Here's an idea: let's tax everybody at two simple rates - one on income, and one on wealth. Since the basic rate of income tax is 20%, and NI is ~10%, let's have a flat rate of income tax of 30% on all income between £5k and £500k. To pull a second number out of my arse, let's have a wealth tax of 1% on all assets between £50k and £5m.
Combine that with a Citizen's Income of £5k, paid as per my earlier post about children and stakeholder grants, and then abolish:
- National insurance
- Inheritance tax
- Capital gains tax
- Council tax
- Jobseekers' allowance
- Housing benefit
- Council tax benefit (obviously)
- Incapacity benefits (and make lots of services for the disabled available free on the NHS, such as care and transportation services)
- Child benefit
- Public funding for universities (perhaps excluding the Open University)
- Student loans
- There are surely more...?
1 comment:
I don't know why this has only crept into my RSS reader today, but very interesting.
Why would you want to have *any* income tax at all? Especially on lower incomes. Income taxes are a disincentive to work and to the creation of employment (and not just as is commonly said for higher earners who might go elsewhere). They are a tarriff on economic productivity.
The "smart" way to tax, as Churchil and Lloyd-George advocated in 1909 is to ask not just "how much have you got" but "how did you get it" and tax, as much as possible, that gained through processes that are econommically less benign - like the appreciation in land values.
So, I probably would keep a small amount of income tax, on very high earners, on the basis that many of those high incomes will have been (though admitedly not necessarily) partly down to such things as land appreciation or patent monopoly or state protectionism in the past, and use that perhaps to top up specific services for those who for some reason could not survive at all on the Citizen's Income (say people with uninsurable medical needs), but otherwise only tax land values (all land values - including airspace and electromagnetic spectrum and so on).
There's enough in the (residential) national land values to pay out £100 per week to adults falling to £20 per week to 0-2 year olds if it were taxed properly, with perhaps commercial land values going to local authorities.
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