Flat Tax is spreading because it works. Regardless of any theoretical
objection, it achieves the desired results. With the addition this year
of Romania and Georgia, there are now 11 countries using the system,
with many more studying the idea very closely.
So what is it? In place of the various tax bands, exemptions and
allowances that feature in a progressive tax regime, flat tax replaces
them with a single rate. Typically, it excludes low earners from paying
any income tax at all and sweeps away the tax allowances that made the
graduated system so complex.
Is it time to move towards Flat Tax? According to Eamonn Butler it is a good time for Scotland to go for it. Though they would need permission from Gordon Brown, it would be a great step for Scotland. He looks at how various countries have proven that having a Flat tax works.
Dr Eamonn Butler takes a look back in time to when Margaret Thatcher started a revolution of Privatization. He looks, through history at some of the major movements of companies from public to private ownership. Whilst assessing their impacts, he points out that privatization has been a positive addition to European policy.
Dr Eamonn Butler takes a closer look at the Queen's speech. He believes that apart from the obvious subjects of crime and terrorism, the speech seemed to be more about reforming the the boring reforms from seven yeas ago.
The fall in coffee prices has been caused by a 15% oversupply in coffee production. It is a market response to excessive production, rather than evidence of corporate wickedness. More efficient techniques and improved technology may cause prices to fall further. Those who advocate prop-up pricing schemes such as 'fair trade' may have the best of intentions, but they will probably encourage the less efficient producers to keep at it, maintaining the over-supply. What farmers should do is to diversify into other products. Instead of a token gesture such as paying a few pence extra for a cup of coffee, we should be opening our markets to their goods, and cease selling subsidized crops in competition with theirs on world markets.
Britain's local government authorities raise only a quarter of their budget from local sources. Which means that they are in thrall to national politicians and bureaucrats. Turn-out in local elections is falling because people no longer think they matter. The solution? Make local councils raise all their money locally. Not with an extra tax, but by turning VAT into a genuinely local sales tax. Since VAT raises almost exactly the amount that counties and districts spend, the sums balance neatly. And with competition between authorities to keep rates low, there will be greater focus on value for money.
Distinguished actuary and government advisor on pensions Alan Pickering believes he has found a way to overcome the savings crisis that could just have everyone agreeing. Better education, simplification, a wider role for employers- but the key measure is to massively increase the basic state pension, while raising the retirement age too.
Dr Eamonn Butler discusses the introduction of a flat tax rate. He mentions the increasing popularity of this form of tax and why the increase in tax revenue often confuses politicians.
Because the flat tax is paid on all income above that threshold, the rate can be very low. It ranges between 13% and 33%. The low rate encourages payment. There are no tax loopholes, nor the need for them, given the low rate. Instead of paying accountants to shelter income and move it offshore, people find it cheaper just to pay the tax. And a low rate makes it more worthwhile to earn more, which brings economic expansion.
A flat tax is simple, letting people understand their obligations. It is fairer, with low earners paying nothing and the rich paying their due. And it unleashes all the talent and enterprise being held back by a devious and complex system.
Dr Eamonn Butler argues the case for people to be able to secure property rights. Through property ownership, people will have the potential to borrow and thus, obtain capital to start a business and create employment opportunities. This, on its own, will create prosperity in the country.