People on higher wages are going to have more money than those on lower incomes. Gee, ya think?
A flat tax has a big advantage in places where people have to do their own tax, it's simple to calculate and so is easier to get right, so it costs less both for the administration and for the individual (for self-employed people, like writers, time to do the taxes is time taken from earning money). And it results in fewer challenges. A complex tax system as in the UK (3 bands of tax rates, plus 3 different bands of "national insurance" which is a tax by any other name) mean complex calculations and often getting it wrong with even more time and money being spent on putting it right.
There is no such thing as a fair tax. If you have an ultimately progressive tax where the percentage gets more as you earn more up to 100% at a certain level then you just discourage people at higher levels from working (why do more work when you are not being paid for it?). As was found in Sweden when they had that, they found that people were turning down promotions and working just their basic hours because they would still be paid the same even if they worked more or had more responsibility. And those who are earning a few million per year will still be hundreds of thousands better off than those on a few tens of thousands per year.
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mmmag
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Re: flat tax?
Date: 2008-01-29 09:27 am (UTC)A flat tax has a big advantage in places where people have to do their own tax, it's simple to calculate and so is easier to get right, so it costs less both for the administration and for the individual (for self-employed people, like writers, time to do the taxes is time taken from earning money). And it results in fewer challenges. A complex tax system as in the UK (3 bands of tax rates, plus 3 different bands of "national insurance" which is a tax by any other name) mean complex calculations and often getting it wrong with even more time and money being spent on putting it right.
There is no such thing as a fair tax. If you have an ultimately progressive tax where the percentage gets more as you earn more up to 100% at a certain level then you just discourage people at higher levels from working (why do more work when you are not being paid for it?). As was found in Sweden when they had that, they found that people were turning down promotions and working just their basic hours because they would still be paid the same even if they worked more or had more responsibility. And those who are earning a few million per year will still be hundreds of thousands better off than those on a few tens of thousands per year.