Hard pressed on my right; my left is in retreat. My centre is yielding. Impossible to maneuver. Situation excellent. I am attacking
The case for a flat-tax has become, among its supporters, something more like a religion than a sensible policy proposal. There is nothing intrinsically silly about reducing the complexity of the tax system, but advocates of flat-tax appear to come from only two camps, those who make ludicrous assumptions in order to make the numbers work, or those who simply implore their readers to accept it as a matter of faith.One example of the former was made by a paper for the Adam Smith Insititute, where a flat tax was said to be a "practical" option as £81bn of public spending cuts could be made just like that. If you're going to start with that assumption any tax reform sounds attractive -- for example I'm going to advocate the "No Sales Tax Tax". This is a clever tax system in which there is no VAT, and its lost revenue is replaced by nothing!
Another was made in the Economist, where it gave the main benefits of a flat tax as being its simplicity in calculating company tax bills, then gave all the practical examples one in which their was a tax-free allowance, removing that simplicity. Today we have an example of the latter, with George Trefgarne in the Telegraph saying,
I would say that, if Germany adopts a flat-tax structure, it could actually be tougher to resist it than to advocate it. Admittedly, there could be difficulties. For instance, how would it work alongside national insurance and corporation tax? In all honesty, I do not know
He does not know how or if it will work, but he knows he supports it.
posted by Matthew @ 8/29/2005 09:40:00 AM
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