The BBC on Flat Tax

Even the BBC has noticed the Flat Tax debate, although some of their comments are a little strange, such as calling the BBC Licence fee a Flat Tax. On the whole though its just nice to see it being discussed.

And the idea that reducing government revenue could be a force for good also arouses vehement opposition - not least because many fear the consequences of creating a very large class of non-taxpaying - and hence non-participating - members of society.

One of the attractive things about the Adam Smith Institute proposal is the tax allowances that take poor people out of the equation all together. This somehow makes them non participants in society?

A pure flat-tax regime would operate without the current mass of deductions - expenses offset against tax obligations - bringing an extraordinary measure of transparency to the system.

This is the main reason why politicians and lefties alike hate the idea. Transparency leads inexorably to pressure to lower government expenditure. The current complicated system helps to make most people believe that they are gaining.

Since deductions are the main means of massaging one's figures, proponents say the system would vastly reduce evasion. Opponents question this. Cheats, they say, would simply divert their attention from fabricating their expenses to hiding their income.

This is a total non argument. The majority of expense manipulation is not illegal. Hiding income is. The release of resources currently wasted on tax avoidance would be one of the best reasons to have such a system.

Some libertarians welcome the prospect that a flat tax would cut government revenue; leave the money in people's wallets, they say.

OK own up. Which one of you libertarians doesn’t want to see government revenue cut?

In Britain, Chancellor Gordon Brown has refused to countenance even the most tentative discussion, and has repeatedly taunted the Conservatives for their flirtations with the idea.

What a surprise, the man who brought more complication to the system than any of his predecessors doesn’t want to simplify it. One of the best arguments for a flat tax is to save us from future Gordon Browns. Hopefully our friends in Central and Eastern Europe have started something that will run and run.