Recently I was asked what I would do if I were made Chancellor for a day. The first thing, obviously, is to introduce the Flat Tax – as around a dozen countries already have done, including four EU members. Everyone would pay the same rate – around 22%.
Doesn’t that just help the rich and leave a big hole in the public finances? Well, no. As Britain and America have found after tax cuts in the past – under Coolidge, Kennedy, Reagan, and Thatcher – the rich end up paying more. When taxes are low, there is less point in avoiding or evading them, or moving abroad.