The Flat Tax

[geraghd]

I was just reading the newest edition of The Economist and have been thinking about this for some time now:

Introducing a flat rate of tax (doesnt matter really what rate, but thinking of an arbitrary number somewhere between 25 and 30 per cent).

One main advantage of it, as outlined in The Economist is its simplicity and therefore its efficiency in collection. Saving a good deal of money but, in ireland especially, how much would be the key.

Also and how I have heard this being bleated by the 'left' so many time: it would be treating everyone equally. Equality and all that.

What do people think. Personally I think its unfair that the people who have a lot of money should pay a proportionally more amount of tax than others... Of course, there would be a threshold level where one wouldnt have to pay tax etc (perhaps only pay PRSI at a certain low level of income: how does this then fit in with the idea of having an effecient simplistic tax system)..
Following introduction in Russia, tax compliance increased and in Estonia its economy has turned around dramatically since reforms in 1994 which included introducing a flat rate of tax.

For the moment lets concentrate on Income Tax only...

[stringjack]

The flat tax is attractive, mainly, to people who have problems with non-linear equations.

[geraghd]

Or a bureaucracy..

[smiffy]

Or a bureaucracy..

How much difference do you actually think a flat rate tax would make to this? It's the collection of taxes that's resource-intensive, not the calculation.

[pluralist]

See, I have this strange old fashioned idea that the rich should pay proportionately more of the earnings.

Oh, and I have this other strange old fashioned idea that the tax laws should actually be applied to levy jail sentences on those who persistently flaunt the law and evade paying their fair share.

But hey, I'm probably just a godamn COMMUNIST.

[Liberty-101]

I'm tired, so tired, bit I'll have a go.

A flat tax is good in theory but not in practice.

In principle you might say people should not be punished for their success, I personally don't look at it like that, I look at it as the more you make the more you can afford to contribute.

If you set the flat tax high then it punishes ordinary while being a minor inconvience for the rich.

Tho I see tax as a method for funding government, not trying to get equality of outcome.

There are people who think that supertaxes in excess of 60% should be slapped on some wealthy people.

I believe in progressive and fair income tax to fund government, not to punish people or try to get equality of outcome (which is impossible and undesirable anyway).

[geraghd]

I believe in progressive and fair income tax to fund government

And if overall tax revenue increased due to the introduction of a flat tax at some minor level say 25%?

How much difference do you actually think a flat rate tax would make to this? It's the collection of taxes that's resource-intensive, not the calculation.

Personally I havent a clue. But the collection of taxes with a flat tax is more efficient than a system of complex taxes as auditing is more intensive and less straight forward.

[XRoot]

As an aside, a flat tax rate would also put less upward pressure on wages. When salaries are moving towards the higher rate (and above it), employers have more of a burden shifted onto them when raising staff salaraies/wages due to the increased tax burden on the employee.

I think it is fallacious to discard the idea of a single tax rate on the basis that 'the rich should pay more' (as advocates of the left often do... ). It is as plain as the nose on yer Brendan Grace that if people who earn more will pay more tax at a flat rate. To my mind, a flat tax rate is basically fairer than our current system. 'The rich' ( ) who are supposed to pay more at the higher rate have an intricate web of means to pay no tax at all at the higher rate (nominal low salaries, corporate tax, directors' fees etc) where those who are actually punished by the higher rate are those PAYE workers who earn a modest amount above the cut-off point.

[david]

I think the income tax system for the majority is reasonably good as it is; what I don't like is the fact that some high earners don't pay any or very little.

Then you have the problem of high earners being able to afford creative accountancy and moving money out to even more lucrative tax havens than Ireland.

I would prefer to see changes in taxation applied to consumption rather than work, such as stepped taxes on fuel use and property (the more you buy, the higher the rate of tax) and greater differentials in vehicle tax.

[geraghd]

stepped taxes on fuel use and property (the more you buy, the higher the rate of tax)

That appears to be the antithesis of what Im proposing...
How will that be administered?