It means that whereas the poorer people will be paying 15% of their income the rich people will pay 15% of their income……. ALL income. At the moment those who are earning tens of millions a year definitely DON’T pay tax anywhere near 20%. Most is spirited away in complicated schemes or offshore ‘investments’. Very very few poorer people have the ability to move ANY of their earning out of employment tax reach.
This was my comment: *I HAVE TO BE HONEST* a flat tax works quite well over here in Bulgaria - everyone pays 10% on absolutely everything - income, capital gains, company cars, benefits, gifts etc They then give a rebate to low income people. The benefit is it is SUPER cheap to collect and administer and there is NO point getting a good accountant to try and avoid tax cos its 10% no matter where you put it, and most hyper-rich pay LESS than 10% anyway. YES it would have to be higher in the UK and it will have to go up here. There are arguments on both sides of it.
@@AaaaandAction See my comment below. If you dont give rich people loop holes it can work out better - just tax them say 20% on everything and anything, you live off a bank loan, you pay 20% tax on it, you have a company car - 20% tax on it. Its way way cheaper to collect
That's how insane capitalism is; We have all these great systems in place to avoid it all being a cash grab at the expense of the poor, but still the differences are huge.
@@charlesbruggmann7909 Value Added Tax...it was originally meant to tax 'luxury' items which are mostly bought by the well off. However its been corrupted as a 'general' tax simple to bring in more revenue from the less well off...
What system stops the elite from robbing the poor exactly? the tax system is a ponzi scheme designed to confiscate the poor people's wealth under the pretense of "austerity".
Let me give you an example from Romania. 80% of the population is poor and the rest are super rich. Obviously the tax is in their advantage and is ha widen the gap betwen them and the poor. When I heard Badenoch peddling the flat tax rate, I knew who the target voter is for this.
But the great thing is, everybody has an equal chance. If those 80% got off their fat backsides and put the hours in instead of expecting to be kept, they'd keep more of their earnings and have a great lifestyle too.
@@graemejones9707 I toyed with the idea that you were being sarcastic, but then rejected it. It is rather obvious you are just a titanic ignoramus (about how social wealth is produced and how the economy works) and an even more titanic fool.
I would never vote for Starmer and hate his defence of war crimes and purging of the labour left, and the wasted chance for labour to help people in this country, but I feel pressured to defend him in real life when I hear people say hes worse than the torys. Some people just dont grasp how bad the Torys are.
If China had a parliament with two communist parties we would mock their attempts at appearing democratic. When Britain has two main neoliberal parties running parliament we celebrate the supperiority of British values.
All the while her "Elective Dictatorship" is run by corporations who, while not bribing their entitled, tory accomplices gaze longingly at much of China's dictatorial control/system. (they're likely not so keen on the judicial sentence China tends to hand down to its own pathologically greedy types ... those found guilty of serious fraud/corruption, that of the firing squad.) en.wikipedia.org/wiki/Elective_dictatorship
And in China you have to join the CPC and get an education in politics and economics before being appointed even to something like a local council, whereas here or in the USA someone with no relevant qualifications whatsoever (like Deux étages Farage or MTG) can buy his or her way into Parliament.
@EbenBransome if you want to comment on a speech by a politician in China they expect you to have read or listened to the whole speech. In the uk, they invite friends from Oxbridge to comment on what politicians that went to oxbridge said. Democracy at its most English.
@@HaydenCyclist I detest the term "Oxbridge". Oxford is very different from the (largely science and engineering) universities that do belong together - Cambridge, Bristol, Manchester, Imperial, UCL and KCL. You rarely find people from those in the media, but for example Cambridge is worth an estimated £30 billion a year to the UK economy with all its spinoffs. Oxford gave us Brexit.
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A flat tax in the Eastern European states involved these states having to sell off many state assets. There is a great deal of inequality and poverty in these states too.
the UK has already sold nearly all of (our) her state assets to the rich, so, we're far worse off than many/most of our 'poorer' European neighbours already.
You can’t have state assets, that’s ….. Socialism! Shock, horror!! Any respectable “liberal” (neoliberal) economy has to privatise, public services in particular, lest the public get any idea of “entitlement”.
The UK sold off many state assets and also has huge inequality. Do you know of any nation that doesn't? America has both the richest personal wealth and the highest value corporations, but I can tell you they also have some of the poorest.
Trickle down will never ever work. But asset stripping the workers of 20% of their income and redistributing it doesn't work. Getting the workers into debt, such as borrwoing, pensions, nuclear clean up, all those debts, just makes people poorer. Ask the simple question. IF people had invested their NI, how big would their pots be? Ask if that would be an issue?
Flat taxes seem sensible in the way that first past the post "seems" sensible but when you scale it to apply across a whole population actually ends up being worse.
Treacle down economics was tried 40 years ago and failed miserably. To collect more taxes the economy must grow substantially. Cutting a bit here and there will have little or no effect on the calamitous finance of this country.
Council Tax and Business Rates are regressive taxes where the poorest pay the biggest percentage of their income in tax. A flat percentage tax here would be fairer!
IME, when tory talks it is always to divide and generally to distract the electorate's attention away from the fact that it's planning/executing its latest heist on the economy/majority. #LookSquirrels
Council Tax also urgently requires reform. Essential to widen the tax base, maybe a local income tax,..including a minimum amount to be paid by the poorest - every one of them! No exceptions!
having a flat rate tax simplfies the tax system menaing that 100 million would not need to be spent on more government adminstering complex tax rules. So we could pay for it by reducing government. That money can then be invested by people or spent.
agreed that people with wealth save already. But when somone saves their money the normally deposit it in a bank. What do you think the banks do with that money? You are only talking about what you see over what is unseen. We need taxes to pay for government expendature, by reducing taxes we should in parallel reduce government.
history has shown trickle down doest happen because of government intervension. When the 08 financial crises happened a smaller government would not have been able to pay for bank bailouts, other examples, the north south devide governments wanting managed decline of Liverpool.
Most of the "complicated tax rules" are things like tax credits, exemptions and the like. A transition to a flat tax rate alone would have basically no impact on administration costs.
Jeresey and Guernsey, drug cartel centres, smuggling, tax avoidance and evasion...why would the Conservatives want to emulate them rather than cracking down on them?
@@lkearney7299 The sole point of joining the Conservativce Party for years has been to get a slice of the corruption. Of course it wasn't. They want Banana Republic of Thames.
It frightens me that the leader of His Majesty's Opposition can seriously say that flat taxes are "very attractive". I don't have any training in economics and even I could work out the likely outcomes. (Problem is that social media enables the very wealthy to manipulate the very poorly informed. Even daft ideas can gain traction now. I'm thinking Brexit/Johnson/Trump.)
The simple fact of the matter is, our current system is broken. Its fine saying this is bad, but if the people saying this is bad don't have a better idea, everyone will gravitate to giving this a chance. Because every sane person knows our current tax system doesn't work for us.
I heard about a flat tax rate many years ago, it seems indicating because of its simplicity BUT after a few mins of thought and its obviously a stupid idea, unless you are rich.
@@Michael-yq2ut yes, but I don't agree with him, higher taxes discourage growth to me, taxes are a punishment for success in life, this is why the poor pay less taxes
For Bulgaria, the flat tax of 10% is for corporations. The tax people pay is 20% and is not bracketed. There is also an upper limit to social taxes which is 3700BGN or something like that, so what you earn above 3.7k is free of social taxes which drops down that 20% a bit on the earnings above that amount. This being clarified, if you think flat tax means lower taxes for the rich you can't be more wrong. The rich don't earn a salary! With the bracketed 50% + tax on 100k + GBP earnings the only thing that's happening is that it's limiting the ability of working class to get wealthy, and they are stuck.
Call me naive, but for me taxation is increasingly becoming a moral issue. The vast wealth the borderless business models of many well-known tech disrupters has allowed those in the higher echelons of those organisations to hoard, and indeed the organisations themselves, some of whom have more money in Swiss Corporate bonds than entire countries do. The people who have ploughed money into farmland because of the tax loopholes, the people who pay themselves in dividends / pay CGT on what is effectively their income, and we could go on citing examples of people who have earned loads of money and yet because the system allows, they end up paying proportionally less tax than the vast majority of us. Even the recent budget that increased NICs for employers is largely being passed on to the workers, because heaven forbid the money men with the biggest stakes in big business should have to wear the pain themselves. Well….I am starting to view anything and anyone with such obscene wealth that they could never spend it in their own lifetimes, as reprehensible human beings who are clearly intelligent enough to see the contribution they are making to the increasing disparity between rich and poor, and yet who think it is anybody’s problem but theirs to do anything about it. Yes, we should have the right to question how our hard earned taxes are spent, but for me, when their clearly isn’t enough money in country coffers to go round, it is time the rich and wealthy looked in the mirror.
A question of morality? Why should Tom Smith - a top surgeon who saves lives every day - who earns £500´000 a year be penalised to finance another Tom Smith, a drug addict, minor criminal unemployable with 5 kids who lives largely from government handouts?
@ I assume he pays his taxes like most of the rest of us. If he bought a farm when he is a doctor, I have less sympathy towards him regarding the recent inheritance tax changes . If he gets paid in a way that allows him to avoid the 45% tax rate I don’t think that is right either. I want people paying whatever the marginal tax rate is for the earnings they make
Winter fuel payment withdrawals, open borders, innocent people thrown in jail for tweets, wrecking the economy, tax rises on employing people, giving away important tactical territory, destroying relations with our significant partner. Yep, they're doing a fine job of destroying the UK
Russia has a flat tax of 13%. Badenoch really shows her colours by this proposal, money for the rich scraped off the poor. Trickle down theory was rubbished when I was reading economics 50 years ago!!! Out political leaders go forward looking backwards.
Total Uk tax take in 2023 was ~£830b. Very roughly that is £20k per working age person (average). Very roughly 55% of the average full time salary. No way would that be acceptable
Every politician wants flat tax as they all say people should pay their fair share. A flat tax rate would allow for this, but the flat tax would need to the same across all forms of income.
Worker A is a government employee who takes no risk and produces little of value and is paid $100 every year. Worker B is an entrepreneur who starts a biotech company, improves public health, and earns $0 for 19 years and $2000 in year 20. A and B earn the same amount over 20 years, yet A pays tax at a low rate and B pays at a high rate. Progressive tax rates create perverse incentives. The problem is an implicit assumption that all income is earned annually. Without a strong form of income averaging, progressive taxation is fundamentally flawed and unfair.
this was my comment: *I HAVE TO BE HONEST* a flat tax works quite well over here in Bulgaria - everyone pays 10% on absolutely everything - income, capital gains, company cars, benefits, gifts etc They then give a rebate to low income people. The benefit is it is SUPER cheap to collect and administer and there is NO point getting a good accountant to try and avoid tax cos its 10% no matter where you put it, and most hyper-rich pay LESS than 10% anyway. YES it would have to be higher in the UK and it will have to go up here. There are arguments on both sides of it.
The government wants to grow the economy but doesn't want inflation of more than 2%, the answer is to build infrastructure projects, increase government spending on assets, housing, roads, rail, power infrastructure, create jobs in the UK and increase the taxes on the wealthiest. We need a wealth tax for non-earned income. If you don't work and you earn your money from assets it should just be taxed as PAYE.
Its painfull getting a good payrise knowing now the government takes 50% of the rise 40% income tax plus NI. Makes working harder not really worth it. A flat tax rate encourages people to do more, everyone gets treated equally from the poorest to the richest. If the poor person gains wealth they keep the same % as when they were poor
I just wish that Labour politicians were capable of articulating some of this. Even on media shows such as Question Time when Lobby group representatives from the likes of TaxPayers Alliance, IEA, ERG etc have appeared and have spouted their nonsense other panel members interventions and responses have been feeble at best.
there are no labour politicians left in Starmer's 'labour' party. He lied and lied aplenty, looked into each one's eyes as he deceived and stabbed them , until there were none. Which is why many genuinely labour minded (representation for those who do economically productive work for a living. aka: the vast majority) folks strongly suspect him to be a tory, some wicked cynics even going so far as to think he may even be hellbent on destroying the party in order for the don't-call-it-fascism gang to waltz in asap squealing: "TINA if we are to save the nation !"
@@tfive24 I appreciate that. The starting point doesn't have to be lengthy or detailed, Just a word such as "nonsense" or "ridiculous" is a starting point to capture attention. They then need to be aware of how much time they are likely to have and be prepared. They seldom seem to be at all prepared.
Not true. A flat tax still means the ‘rich’ pay more (often much more) than the ‘poor’. It also has the huge advantage of dealing with the free rider problem. Surely if the NHS and other government services are ‘universal’, then they should be paid for by all?
Maths: If tax-payer A pays 10% tax on his 10k income (1k) and tax-payer B pays 10% on his 100k income (10k) please explain how 1K is greater than 10k. If insufficient revenue has been collected to maintain Tax-payer A's previous state support payments raise the 10% by whatever is required. Flat taxes are plain simple common-sense that will stop politicians playing tax games and will save us vast fortunes in bureaucracy - no more arguing about the threshold levels for the next tax rate for one thing.
What you really mean is progressive taxation has pushed all the taxes to the wealthy and implementing a flat tax would undo that regime. You statement is loaded. Or an alternative would be to say the marginal change would be to the lowly paid. But it certainly isn't as you described.
Man you lot are simple minded. Obviously everyone understand the poor pay less in pounds and pence, but it’s the share of their income that they pay that’s higher. The poor don’t save money, as they don’t make enough to do so, they spend it all mostly on necessities like food and bills. So they pay a much larger proportion of their income on VAT (which is already essentially a flat tax we have, as it doesn’t depend on the buyer’s income). While the wealthy don’t spend their money, so will pay less as a proportion of their income on VAT. Plus the basic premise of progressive tax rates is that those earning the most can contribute the most without suffering.
A clear and concise explanation, thank you. I had thought that the idea of a flat tax was that the high earners absolutely had to pay it on all earnings rather than avoid paying tax through employing clever accountants.
Lots of top earners would continue working and paying 20% tax on those earnings rather than taking early retirement and paying 20% tax on their pension, which is much smaller . Also, there is less incentive to tax dodge as 20% would seem fair especially if the 20% was combined with jail time if caught dodging tax .
This country has been under neoliberal ideology for more than 40 years. Do you really think that another hand out to the wealthy would do anything other than enrich them, and only them? We have 40 years of evidence what happens when we look after the wealthy but don't look after the majority. Inequality increases.
I believe that transactional rather than consumption taxes need to make a comeback. At least you can claw something back from the multi-nationals that way.
@@charlesbruggmann7909 I'm Australian, we used to have a Financial Institutions Duty and it was 0.06% tax on all transactions made through a bank. It was replaced by a 10% Goods and Services Tax which is like your VAT.
You can counter the proposal with flat asset tax rate. The government recognizes and protects our assets, not income. Why not just tax the asset it guarantees?
Because there's no moral justification. The premise of taxing income is really to direct economic activity, ie to get people to do 'stuff' for the overall benefit of everyone. That's distinct from people owning 'stuff'.
@@ChrisLee-yr7tz I was just joking. But citing moral justification here is ridiculous. How can you not find the moral ground with such inequality? Does it need to lead us to some modern form of feudalism before it's justified?
Taxation is necessary for the government to control inflation by withdrawing cash from the economy. Taxes do not fund government spending. If you don't understand this, Richard Murphy has dozens of videos and blogs explaining this basic fact.
@@helenheenan3447 Taxes ultimately do fund spending. You can apply a Hesenburg principle and move it around in time a bit, but ultimately, its funded. As for Richard, he can't even state how big the pension debts are on the balance sheet, and he's an Accountant. He can't even talk about IFRS when it comes to debts. So a simple test. Print vouchers. Pay Public Sector workers in vouchers. No need for tax or fines. Do you think they will complain? Why is it that those who swallow the taxes don't fund government so keen on having the rich pay more tax? You don't need it so you don't need to tax.
What would the required tax rate be if a flat tax was even possible? So everyone paid the same and all tax avoidance was stopped. It seems to me at least, it's those individuals and corporations that bend the rules to avoid paying even a 20% tax bill, that prevent a flat rate working.
The tax burden on the low paid is too high, however, what would be the impact if we leave VAT and corporation tax as they are. Set the income tax tax free band at £20k or £30k. Abolish the CGT and Dividend tax free bands. Charge 20% tax on worked incomes, Capital Gains, dividends, interest and other forms of unearned income and Inheritances. Charge 10% NI on earned income, above £20k and on Capital Gains, dividends and other forms of unearned income. Credit those working part-time but earning less than £20k with NI contributions for pension calculation. Simplify IHT nil band to £500k per person. Use the resources freed up at the Inland Revenue to ensure that all pay their taxes due, starting with those with the greatest amount to pay.
@@Darren-i1w If everyone paid their "share", the rich would be paying £1000s for a tin of tomatoes. The system skews rewards towards those with the most influence. Taxation attempts to flatten that somewhat while retaining the incentive to produce more (ie earn more).
@@Darren-i1w Tax is not a punishment for success, tax liabilities exist in order to make people productive, ie it's coercive. What happens in practice is that money by its very nature accumulates to wild inequalities, far beyond what happens in natural processes (eg, no lion could dominate the entire African continent, but a human could do just that using money as a technology).
20% is nowhere near enough without moving to a society where all social and health security is based on private insurance, which effectively means inverted progression on tax-like expenses.
@@physiocrat7143Even worse idea. What do you do about the old woman who bought her house 70 years ago and is now widowed on a small pension? She happens to live in London where land value has gone through the roof. She can't afford to pay a tax based on a land value she has no control over. Why should she be forced to sell?
Flat taxes can work very well, but they need to come with separate taxes. For example, you could have a flat 20% capital gains, and income tax, but scrap VAT for all goods and services, except for luxury goods (designer goods, Bentleys, Rolls-Royce, Jaguars, **luxury homes**, etc) where you could place a 40% VAT rate. For tricky dicky's you can impose a 40% levy on the importation (grey imports) of such goods to stop them getting around it. This would suck a lot of money out of them, dampening their ability to corrupt the legislature.
Assuming they only consider their own monetary gain, all those who currently pay a higher (income) tax rate than the proposed 'flat' tax rate would want it. Therefore, a large majority of tory voters (who tend to be higher paid) would want it , plus the UK's depressingly high number of gullible/ignorant/propagandized voters (because they are deluded and possibly/probably have been deceived by a campaign of associated lies funded by the tory outfit) would vote for it. Only discovering when it's too late that they've been conned and robbed...just as easily as ever. (See also: tory's 'brexit' scam) The UK's media outlets may have changed from print/TV to WWW but the exclusively wealth serving propaganda that's pumped out to the unsuspecting masses has only become more devious in its design and more tailored to its prey's vulnerabilities/ignorance/unwariness.
It is absolutely correct that a flat tax rate of 20% is a very bad idea, but something must be done because the current tax system is penalising the poor. What about a flat rate of 50%? The introduction of such a rate MUST be coupled with negative tax. Negative tax replaces the tax allowance with a substantial universal cash payment that benefits the poor and is funded by the wealthy contributing more tax. They cannot complain about it because everyone is paying at the same rate.
Most people should. The welfare system has got out of hand, and we all have to pay. 1 in 5 people of working age live on benefits, greedy old pensioners want yet more free money, and let's not even mention the hordes of illegal migrants in their taxpayer-funded hotels. If a flat tax is a corrective to an out-of-control public sector then we should all welcome it.
Re flat rate of income tax (just income): You could probably find £40-50bn from the UC budget (currently £81bn), and get people back to work, and I'm sure could find a good chunk of £40bn of waste out the £169bn NHS budget, or spread some of that between other budgets. That's assuming we just cut, not that a flat rate of income tax will inevitably hike receipts from economic growth via VAT receipts, which in term improves corporate tax receipts, creates jobs etc etc. The staggered higher(+) income rate tax threshold policy is inherently and anti-wealth creation policy that punishes hard work, particularly the gap between £100 and £125k when the personal allowance is effectively repaid by the earner.
I’ve often thought that there should be a personal allowance of say £25k and a flat tax of maybe 35% -40% (depending on how much that would raise/cost) on income over that. Would that work?
What about a flat tax of 90% with a tax free allowance of £80k? No more ridiculous than what bad Enoch wants but turns the outcome on its head. Also a decent land tax, can't hide land in an overseas account. Low land tax on primary residence, parks and land used for farming, high tax on unused hoarded land that could be productive and golf courses.
So how's the MoD going to pay the land tax? How's the National Trust going to pay the land tax? Hows the RSPB going to pay the land tax? All massive owners of unproductive land that's being hoarded. So when that golf course is bankrupt because it can't pay the tax, then HMRC get the land. How are htey going to tax themselves?
With the simple flat rate tax obeying the 'simple, broad & low' principle you don't have tax free allowances, the whole purpose is abolish bands & thresholds. Any assistance is provided from tax collected not before it is collected. Your 90/80 model would result in the immediate collapse of society. No super skilled professional; doctors, engineers etc would keep working in the UK, the vast majority of the population would keep thir income below 80k and tax revenue would collapse as the £80k is way above the level where a huge chunk of revenue is currently raised.
@@andyinsuffolk Notice the common theme. Someone else pays so I don't. Next, none of they say why the state needs to take 80% of the UK's income. Why does the state need to make a 30% gross profit? That's its current profit margin.
@@adenwellsmith6908 - Land Tax is interesting because the land protected by a nation state is a fixed unchanging asset linked to natural resource usage; minerals, water etc. It's a unique category and land owners should not be subsidised by non land-owners in a democracy. So what about a very low rate which is excused when the land has public use/access or is owned by the state? Even a £1 an acre would raise tens of millions to run the land registry and land related overheads ??
This based on 20%…what about 25%…coupled with a higher minimum wage and arising the threshold for start. Really such a view, only equates poor economic with low taxes…which is no surprise.
A flat tax might actually trigger an energetic, wealth creating society which could afford those things you said would go because of a flat tax. They are not affordable now, as well you know, or should know. Britain does not have a Fairy Godmother and we both know, if you would admit it, that we are running out of wealth creating options and collapse is certain and imminent. No one is brave enough to spell out what we going to suffer. A flat tax might inspire the British to entrepreneurship instead of everyone wanting a cosy job in the public sector. The current path is over a cliff edge and those things you want will be as unavailable to the greedy, entitled British as they are now in the dusty villages and crowded favellas of the world.
Really, so how do you fix the problem, currently the wealthy pay higher tax rates, a significant contibution to the total income from taxation, with a flat tax their contribution to the total tax income drops by a very large amount, where/how is the loss of income to be compensated for?
@@jonno2000 I did reply in polite and constructive terms but it has disappeared. Must have trodden on some toes but can't be bothered to type it all in again. Sorry
This is one of the first videos of yours that has left a large gap in the explanation. You assumed 20% but I don't know why. What about a 35% flat income tax with a 20k allowance? Does that simplify the income tax system and balance out? I challenge you to come up with the best scenario you can for a flat tax and then destroy it with a counter argument? ;) merry Christmas and thanks for the videos, I learn a lot of great info.
The higher you get up the income scale, the more luxury spending you have, and that can stand to be taxed harder than the essential, “pay your bills” money. I think it’s time for a £20k tax free allowance, then a 25% on everything to £100k and 50% on everything beyond. Taxing 40% over £50k is inappropriate now with the way debasement has inflated wages.
They need to massively raise the level that you start paying tax, the cost of living has raised so much its becoming alot more difficult to manage now on a low income.
The fallacy in this line of thinking is that government ought to tax incomes, when in fact the government cannot possibly have any legitimate moral warrant to tax incomes, unless the government itself was the instrument by which those incomes were earned.
That's completely upside down. In a fiat system, the government is the source of the money. You need it in order to settle tax liabilities. The government doesn't need the money, it needs you to produce output.
Flat taxes would be grossly unfair, but conversely there is an upper limit above which the more wealthy in the economy cease to work and employ their capital. If I were the chancellor looking to boost the economy, my first action would be to increase the level of income at which we all pay basic rate income tax.
@ it is not unfair to have a higher rate of tax for the more wealthy in society, fairness is in my opinion linked to the ability of the wealthy to pay a higher proportion of that higher income.
Badenoch is insane and very obviously quite temporary hopelessly disconnected from voters and enabling wealthy people to be even more wealthy given they find more than enough ways to avoid existing taxes our former PM Sunak only paid an effective rate of tax of 23% through taking most income as capital gains just an example.
I would love you to devote an episode or two of your podcasts to your broad brush design principles for a more perfect taxation system - personal, corporate and VAT. There's such a huge range of possibilities that interested armchair economists are usually baffled.
We already do have almost a flat tax. Lower tax plus NI for lower incomes, just tax at a higher rate for higher incomes. NI is not different in some mysterious way, it is just a tax, paid straight to the tax man.
A flat tax is a fair tax. If a small business seeks to make improvements which increase its revenue, they shouldn’t be punished by tax brackets… which also harm people (like the waitress who works overtime to feed her family, only to discover the government has taken a greater share of her income for labor that’s even more taxing to perform because it’s above 40 hours per week). Anything other than a flat tax is, by definition, unfair.
That's the wrong kind of flat taxation. The interesting kind is a transactional flat tax. Each transaction will have a small percent of tax, no other taxes. The rich move more money therefore they'll pay more. Unproductive jobs such as tax collection will be gone.
@onsendiva4695 first, I didn't mention but sure there are downsides and problems with this system, I'm not claiming it's perfect or even good, rather an interesting system to discuss. As for your question, yes, any money transfer has tax on it. It's not just on the interest but on the entire transaction amount
What if we had a flat rate of 50% but a significant increase in the personal allowance such that it raises the same amount of revenue as the current system
A “flat tax” means “tax cuts for the rich”.
It also means a lot less paperwork which is nonproductive
It means that whereas the poorer people will be paying 15% of their income the rich people will pay 15% of their income……. ALL income. At the moment those who are earning tens of millions a year definitely DON’T pay tax anywhere near 20%. Most is spirited away in complicated schemes or offshore ‘investments’.
Very very few poorer people have the ability to move ANY of their earning out of employment tax reach.
This was my comment: *I HAVE TO BE HONEST* a flat tax works quite well over here in Bulgaria - everyone pays 10% on absolutely everything - income, capital gains, company cars, benefits, gifts etc
They then give a rebate to low income people. The benefit is it is SUPER cheap to collect and administer and there is NO point getting a good accountant to try and avoid tax cos its 10% no matter where you put it, and most hyper-rich pay LESS than 10% anyway. YES it would have to be higher in the UK and it will have to go up here. There are arguments on both sides of it.
@@AaaaandAction Right, which is exactly why a flat tax changes nothing, except disproportionately punish the poor and middle class.
@@AaaaandAction See my comment below. If you dont give rich people loop holes it can work out better - just tax them say 20% on everything and anything, you live off a bank loan, you pay 20% tax on it, you have a company car - 20% tax on it. Its way way cheaper to collect
That's how insane capitalism is; We have all these great systems in place to avoid it all being a cash grab at the expense of the poor, but still the differences are huge.
And yet if you’d listed to the video, you would hear that tax revenue is overwhelmingly paid by wealthy people.
@@brogenville
Direct taxes (especially income tax) are paid by the ‘rich’. Indirect taxes like VAT?
@@charlesbruggmann7909 Value Added Tax...it was originally meant to tax 'luxury' items which are mostly bought by the well off. However its been corrupted as a 'general' tax simple to bring in more revenue from the less well off...
What system stops the elite from robbing the poor exactly? the tax system is a ponzi scheme designed to confiscate the poor people's wealth under the pretense of "austerity".
They may pay more, but not in proportion.
If you want to pump money into the economy give it to the poor - they will spend it, not on fripperies, but on necessities.
Indeed. More to the point, whatever they spend goes straight back into the economy.
@@charliemoore2551yes and creates good circulation.
@@martinpook5707
Necessities including booze, ciggies and trips to the bookies?
@@charlesbruggmann7909 Thankyou for making the most ignorant of comments.
@@charlesbruggmann7909still goes straight back into circulation benefiting the economy
Let me give you an example from Romania. 80% of the population is poor and the rest are super rich. Obviously the tax is in their advantage and is ha widen the gap betwen them and the poor. When I heard Badenoch peddling the flat tax rate, I knew who the target voter is for this.
But the great thing is, everybody has an equal chance. If those 80% got off their fat backsides and put the hours in instead of expecting to be kept, they'd keep more of their earnings and have a great lifestyle too.
@@graemejones9707 No, not everyone can be rich. People are needed to do lower and average paid jobs. Society would collapse without them.
And 80% of the tax is paid by the rich 20%
I wouldn’t bother with Graeme, he’s either a paid idiot, or just a regular one.
@@graemejones9707 I toyed with the idea that you were being sarcastic, but then rejected it. It is rather obvious you are just a titanic ignoramus (about how social wealth is produced and how the economy works) and an even more titanic fool.
I would never vote for Starmer and hate his defence of war crimes and purging of the labour left, and the wasted chance for labour to help people in this country, but I feel pressured to defend him in real life when I hear people say hes worse than the torys. Some people just dont grasp how bad the Torys are.
If China had a parliament with two communist parties we would mock their attempts at appearing democratic.
When Britain has two main neoliberal parties running parliament we celebrate the supperiority of British values.
Spot on comment.
All the while her "Elective Dictatorship" is run by corporations who, while not bribing their entitled, tory accomplices gaze longingly at much of China's dictatorial control/system.
(they're likely not so keen on the judicial sentence China tends to hand down to its own pathologically greedy types ... those found guilty of serious fraud/corruption, that of the firing squad.)
en.wikipedia.org/wiki/Elective_dictatorship
And in China you have to join the CPC and get an education in politics and economics before being appointed even to something like a local council, whereas here or in the USA someone with no relevant qualifications whatsoever (like Deux étages Farage or MTG) can buy his or her way into Parliament.
@EbenBransome if you want to comment on a speech by a politician in China they expect you to have read or listened to the whole speech.
In the uk, they invite friends from Oxbridge to comment on what politicians that went to oxbridge said. Democracy at its most English.
@@HaydenCyclist I detest the term "Oxbridge". Oxford is very different from the (largely science and engineering) universities that do belong together - Cambridge, Bristol, Manchester, Imperial, UCL and KCL.
You rarely find people from those in the media, but for example Cambridge is worth an estimated £30 billion a year to the UK economy with all its spinoffs. Oxford gave us Brexit.
Hit 240k today. Appreciate you for all the knowledge and nuggets you had thrown my way over the last months. Started with 24k in September 2024
I would really like to know how much work you did put in to get to this level
I will be forever thankful to you, you changed my life I will continue to speak on your behalf for the world to hear that you saved me from huge financial debt with just a little trade, thank you Jihan Wu you're such a life saver
As a beginner in this, it’s essential for you to have a mentor to keep you accountable.
Jihan Wu is also my trade analyst, he has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns
Jihan Wu Services has really set the standard for others to follow, we love him here in Canada 🇨🇦 as he has been really helpful and changed lots of life's
His guidance allowed me to restructure my retirement plan, resulting in an estimated $700,000 more by the time I retire.
I just love my early morning lessons. please keep them coming. Well done Richard and thank you.
A flat tax in the Eastern European states involved these states having to sell off many state assets. There is a great deal of inequality and poverty in these states too.
the UK has already sold nearly all of (our) her state assets to the rich, so, we're far worse off than many/most of our
'poorer' European neighbours already.
You can’t have state assets, that’s ….. Socialism! Shock, horror!! Any respectable “liberal” (neoliberal) economy has to privatise, public services in particular, lest the public get any idea of “entitlement”.
The UK sold off many state assets and also has huge inequality. Do you know of any nation that doesn't? America has both the richest personal wealth and the highest value corporations, but I can tell you they also have some of the poorest.
Tories still subscribing to the shamen in Tufton St I see...
thanks for educating me! i used to think that the complicated tax system in the uk was intended to fund more accountants 🤭
It's worth "educating" yourself beyond a left leaning echo chamber.
Not many options for England - Tory, Tory lite (Labour), Tory Max (Reform/UKIP) or Tory Fizz (Lib dems).
🤣
Sadly complete nonsense like this will get the most votes here.
There's the sdp. They're different. Like very old school labour of the 50s 60s
Excellent. 😂
Vote Green
the thing to note about trickle down,
it's only ever yellow and brown.
Everyone gets what they deserve?
So where are the trillions of pounds of wealth that the workers have paid the socialist welfare state?
But there would only be a 20% tax on umbrellas :-(
@@charlesbruggmann7909 Instant Karma's gonna get you, Gonna look you right in the face, Better get yourself together darlin', Join the human race
Trickle down will never ever work.
But asset stripping the workers of 20% of their income and redistributing it doesn't work.
Getting the workers into debt, such as borrwoing, pensions, nuclear clean up, all those debts, just makes people poorer.
Ask the simple question. IF people had invested their NI, how big would their pots be?
Ask if that would be an issue?
These videos are delivered in a manner that makes the information nice and easy to absorb, just wanted to say that along with a quick thank you 👍
Flat taxes seem sensible in the way that first past the post "seems" sensible but when you scale it to apply across a whole population actually ends up being worse.
Ooh! That's a really good way of putting it!
Not just is it that the rich will not spend more, the poor will be spending much less ruining economy. Due to marginal propensity to consume.
Treacle down economics was tried 40 years ago and failed miserably. To collect more taxes the economy must grow substantially. Cutting a bit here and there will have little or no effect on the calamitous finance of this country.
Council Tax and Business Rates are regressive taxes where the poorest pay the biggest percentage of their income in tax. A flat percentage tax here would be fairer!
In 2011, 38,000 public sector workers earned £100k or more. Probably a lot more by now.
Thank you for your hard work Richard.
He hasn't done his homework. Tax incidence negates his entire argument.
@@physiocrat7143 what is an ideal tax system for the UK?
@BAmalakas
Land Value Tax. Cannot be avoided or evaded. Inexpensive and easy to collect.
Why are the Tories talking? They are looking for a payout.
IME, when tory talks it is always to divide and generally to distract the electorate's attention away from the fact that it's planning/executing its latest heist on the economy/majority.
#LookSquirrels
Council Tax also urgently requires reform.
Essential to widen the tax base, maybe a local income tax,..including a minimum amount to be paid by the poorest - every one of them!
No exceptions!
having a flat rate tax simplfies the tax system menaing that 100 million would not need to be spent on more government adminstering complex tax rules. So we could pay for it by reducing government. That money can then be invested by people or spent.
agreed that people with wealth save already. But when somone saves their money the normally deposit it in a bank. What do you think the banks do with that money? You are only talking about what you see over what is unseen. We need taxes to pay for government expendature, by reducing taxes we should in parallel reduce government.
history has shown trickle down doest happen because of government intervension. When the 08 financial crises happened a smaller government would not have been able to pay for bank bailouts, other examples, the north south devide governments wanting managed decline of Liverpool.
Most of the "complicated tax rules" are things like tax credits, exemptions and the like. A transition to a flat tax rate alone would have basically no impact on administration costs.
@@InsufficientGravitas you have any evidence for that?
Jeresey and Guernsey, drug cartel centres, smuggling, tax avoidance and evasion...why would the Conservatives want to emulate them rather than cracking down on them?
LOL. i don't know...but i can guess !
#CityOfLondon #DarkGlobalWebOfTaxHavens
Cracking down has never worked. Taxation of incomes is like trying to collect smoke in a fishing net.
I think the emulation was only intended to go as far as the tax rate.
@@lkearney7299 The sole point of joining the Conservativce Party for years has been to get a slice of the corruption. Of course it wasn't. They want Banana Republic of Thames.
The only advantage of flat taxes is the simplification of doing tax returns, which I personally favour. I hate doing my taxes.
HMRC calculate the tax.
Why not give a “UBI” style payment to all UK citizens of around £80 pw and they flat tax of 35-40%. It’s still a flat tax, but no cliff edges
I want a flat tax rate of 100%, then the government takes that money and redistributes it amongst its citizens based upon their need.
I need Beluga caviar and champagne for breakfast every day.
Enjoy your communist state! Why don't you just move?
It frightens me that the leader of His Majesty's Opposition can seriously say that flat taxes are "very attractive". I don't have any training in economics and even I could work out the likely outcomes.
(Problem is that social media enables the very wealthy to manipulate the very poorly informed. Even daft ideas can gain traction now. I'm thinking Brexit/Johnson/Trump.)
The simple fact of the matter is, our current system is broken. Its fine saying this is bad, but if the people saying this is bad don't have a better idea, everyone will gravitate to giving this a chance. Because every sane person knows our current tax system doesn't work for us.
Poll tax is a flat tax. Remember what happened?
It wasn't a flat rate tax though was it?
It was much fairer to base it on usage, ie number of people, rather than property value.
People who are hidden from the system and didn't pay were suddenly going to have to pay. It was a fairer system.
I heard about a flat tax rate many years ago, it seems indicating because of its simplicity BUT after a few mins of thought and its obviously a stupid idea, unless you are rich.
Its not a stupid idea, it encourages growth, doesn't punish success,
@Darren-i1w did you not watch the vid?
@@Michael-yq2ut yes, but I don't agree with him, higher taxes discourage growth to me, taxes are a punishment for success in life, this is why the poor pay less taxes
@Darren-i1w you must be rich then
@Michael-yq2ut am comfortable, the poor need to stop being lazy and stop expecting handouts, they hold the country back and drag it down
Trickle-down economics is utter bollocks.
For Bulgaria, the flat tax of 10% is for corporations. The tax people pay is 20% and is not bracketed. There is also an upper limit to social taxes which is 3700BGN or something like that, so what you earn above 3.7k is free of social taxes which drops down that 20% a bit on the earnings above that amount.
This being clarified, if you think flat tax means lower taxes for the rich you can't be more wrong. The rich don't earn a salary! With the bracketed 50% + tax on 100k + GBP earnings the only thing that's happening is that it's limiting the ability of working class to get wealthy, and they are stuck.
Why isn’t capitol gains income?
Most of it is inflation.
Call me naive, but for me taxation is increasingly becoming a moral issue. The vast wealth the borderless business models of many well-known tech disrupters has allowed those in the higher echelons of those organisations to hoard, and indeed the organisations themselves, some of whom have more money in Swiss Corporate bonds than entire countries do. The people who have ploughed money into farmland because of the tax loopholes, the people who pay themselves in dividends / pay CGT on what is effectively their income, and we could go on citing examples of people who have earned loads of money and yet because the system allows, they end up paying proportionally less tax than the vast majority of us. Even the recent budget that increased NICs for employers is largely being passed on to the workers, because heaven forbid the money men with the biggest stakes in big business should have to wear the pain themselves. Well….I am starting to view anything and anyone with such obscene wealth that they could never spend it in their own lifetimes, as reprehensible human beings who are clearly intelligent enough to see the contribution they are making to the increasing disparity between rich and poor, and yet who think it is anybody’s problem but theirs to do anything about it. Yes, we should have the right to question how our hard earned taxes are spent, but for me, when their clearly isn’t enough money in country coffers to go round, it is time the rich and wealthy looked in the mirror.
Tax was always a moral issue, that’s why the rich worked so hard to undermine peoples understanding of it.
A question of morality?
Why should Tom Smith - a top surgeon who saves lives every day - who earns £500´000 a year be penalised to finance another Tom Smith, a drug addict, minor criminal unemployable with 5 kids who lives largely from government handouts?
@ I assume he pays his taxes like most of the rest of us. If he bought a farm when he is a doctor, I have less sympathy towards him regarding the recent inheritance tax changes . If he gets paid in a way that allows him to avoid the 45% tax rate I don’t think that is right either. I want people paying whatever the marginal tax rate is for the earnings they make
The Tories are talking about a "flat tax" because they are a boon for the Rich (Aristocracy) and a bane to the peasants.
Flat taxes sound like the sheriff of Nottingham. I.e., an inverted Robin Hood policy...
Because they want to give even more money to their fat cat mates and stuff the poor . What's new except that it's more blatant. 😂
Agreed. And yet progressive taxation has also failed to be nearly progressive enough.
Wouldn’t be the first disaster a self-serving, cretinous government has brought down upon us, would it?
if you think you can do better - stand for election
Winter fuel payment withdrawals, open borders, innocent people thrown in jail for tweets, wrecking the economy, tax rises on employing people, giving away important tactical territory, destroying relations with our significant partner.
Yep, they're doing a fine job of destroying the UK
Flat rate of INCOME Tax works incredibly well in Hong Kong. In fact their Tax Code is incredibly simple AND successful.
They have both a progressive and flat rate income tax schemes. And they have high property taxes.
Russia has a flat tax of 13%. Badenoch really shows her colours by this proposal, money for the rich scraped off the poor. Trickle down theory was rubbished when I was reading economics 50 years ago!!! Out political leaders go forward looking backwards.
Total Uk tax take in 2023 was ~£830b. Very roughly that is £20k per working age person (average). Very roughly 55% of the average full time salary. No way would that be acceptable
Every politician wants flat tax as they all say people should pay their fair share. A flat tax rate would allow for this, but the flat tax would need to the same across all forms of income.
Worker A is a government employee who takes no risk and produces little of value and is paid $100 every year. Worker B is an entrepreneur who starts a biotech company, improves public health, and earns $0 for 19 years and $2000 in year 20. A and B earn the same amount over 20 years, yet A pays tax at a low rate and B pays at a high rate. Progressive tax rates create perverse incentives. The problem is an implicit assumption that all income is earned annually. Without a strong form of income averaging, progressive taxation is fundamentally flawed and unfair.
Because our current tax regime produces no winners??
Why??
Multimillionaires, and billionaires are bound to love it.
Taxation in the UK needs to be simplified but a flat tax is too crude an approach.
this was my comment: *I HAVE TO BE HONEST* a flat tax works quite well over here in Bulgaria - everyone pays 10% on absolutely everything - income, capital gains, company cars, benefits, gifts etc
They then give a rebate to low income people. The benefit is it is SUPER cheap to collect and administer and there is NO point getting a good accountant to try and avoid tax cos its 10% no matter where you put it, and most hyper-rich pay LESS than 10% anyway. YES it would have to be higher in the UK and it will have to go up here. There are arguments on both sides of it.
The government wants to grow the economy but doesn't want inflation of more than 2%, the answer is to build infrastructure projects, increase government spending on assets, housing, roads, rail, power infrastructure, create jobs in the UK and increase the taxes on the wealthiest. We need a wealth tax for non-earned income. If you don't work and you earn your money from assets it should just be taxed as PAYE.
'I've already got enough' - hmmm I've never heard anyone say that - and probably never will.
Lets put it like this. It would far far more anti poor pro rich than Liz Truss's budget.
Its painfull getting a good payrise knowing now the government takes 50% of the rise 40% income tax plus NI. Makes working harder not really worth it.
A flat tax rate encourages people to do more, everyone gets treated equally from the poorest to the richest. If the poor person gains wealth they keep the same % as when they were poor
People aren't treated equally though in terms of what they are paid (compared to what they "earn"). Progressive taxes aim to dampen the curve.
I just wish that Labour politicians were capable of articulating some of this. Even on media shows such as Question Time when Lobby group representatives from the likes of TaxPayers Alliance, IEA, ERG etc have appeared and have spouted their nonsense other panel members interventions and responses have been feeble at best.
there are no labour politicians left in Starmer's 'labour' party.
He lied and lied aplenty, looked into each one's eyes as he deceived and stabbed them , until there were none. Which is why many genuinely labour minded (representation for those who do economically productive work for a living. aka: the vast majority) folks strongly suspect him to be a tory, some wicked cynics even going so far as to think he may even be hellbent on destroying the party in order for the don't-call-it-fascism gang to waltz in asap squealing: "TINA if we are to save the nation !"
He has time to explain in detail why something is wrong. On or radio, they don't have the time to explain on those platforms.
@@tfive24 I appreciate that. The starting point doesn't have to be lengthy or detailed, Just a word such as "nonsense" or "ridiculous" is a starting point to capture attention. They then need to be aware of how much time they are likely to have and be prepared. They seldom seem to be at all prepared.
Flat taxes push all the taxation to the lower incomes.
Not true. A flat tax still means the ‘rich’ pay more (often much more) than the ‘poor’. It also has the huge advantage of dealing with the free rider problem. Surely if the NHS and other government services are ‘universal’, then they should be paid for by all?
Maths: If tax-payer A pays 10% tax on his 10k income (1k) and tax-payer B pays 10% on his 100k income (10k) please explain how 1K is greater than 10k. If insufficient revenue has been collected to maintain Tax-payer A's previous state support payments raise the 10% by whatever is required. Flat taxes are plain simple common-sense that will stop politicians playing tax games and will save us vast fortunes in bureaucracy - no more arguing about the threshold levels for the next tax rate for one thing.
@@andyinsuffolkThe difference is you can live on 90k but not on 9k.
That 1k is a lot more useful for the 10k earner than the 90k earner.
What you really mean is progressive taxation has pushed all the taxes to the wealthy and implementing a flat tax would undo that regime. You statement is loaded. Or an alternative would be to say the marginal change would be to the lowly paid. But it certainly isn't as you described.
Man you lot are simple minded. Obviously everyone understand the poor pay less in pounds and pence, but it’s the share of their income that they pay that’s higher.
The poor don’t save money, as they don’t make enough to do so, they spend it all mostly on necessities like food and bills. So they pay a much larger proportion of their income on VAT (which is already essentially a flat tax we have, as it doesn’t depend on the buyer’s income). While the wealthy don’t spend their money, so will pay less as a proportion of their income on VAT.
Plus the basic premise of progressive tax rates is that those earning the most can contribute the most without suffering.
There should be flat tax. Land value tax and reasource royalty, carbon tax done
A clear and concise explanation, thank you. I had thought that the idea of a flat tax was that the high earners absolutely had to pay it on all earnings rather than avoid paying tax through employing clever accountants.
Lots of top earners would continue working and paying 20% tax on those earnings rather than taking early retirement and paying 20% tax on their pension, which is much smaller . Also, there is less incentive to tax dodge as 20% would seem fair especially if the 20% was combined with jail time if caught dodging tax .
This country has been under neoliberal ideology for more than 40 years. Do you really think that another hand out to the wealthy would do anything other than enrich them, and only them? We have 40 years of evidence what happens when we look after the wealthy but don't look after the majority. Inequality increases.
I believe that transactional rather than consumption taxes need to make a comeback. At least you can claw something back from the multi-nationals that way.
You mean VAT at a standard 20% rate? Or perhaps higher stamp tax on property and financial transactions?
@@charlesbruggmann7909 I'm Australian, we used to have a Financial Institutions Duty and it was 0.06% tax on all transactions made through a bank. It was replaced by a 10% Goods and Services Tax which is like your VAT.
No point is just taxing flats- you need to tax houses too…
I believe HK has a flat rate of income tax as well. It’s a very unequal society.
You can counter the proposal with flat asset tax rate.
The government recognizes and protects our assets, not income. Why not just tax the asset it guarantees?
Because there's no moral justification. The premise of taxing income is really to direct economic activity, ie to get people to do 'stuff' for the overall benefit of everyone. That's distinct from people owning 'stuff'.
@@ChrisLee-yr7tz I was just joking.
But citing moral justification here is ridiculous. How can you not find the moral ground with such inequality? Does it need to lead us to some modern form of feudalism before it's justified?
Thanks for the warning. Sharpen the pitchforks.
FLAT taxation is the only fair taxation!
So why do you need the taxes? It's not as if its going on services, 30% gross profit margin.
Taxation is necessary for the government to control inflation by withdrawing cash from the economy. Taxes do not fund government spending. If you don't understand this, Richard Murphy has dozens of videos and blogs explaining this basic fact.
@@helenheenan3447 Taxes ultimately do fund spending. You can apply a Hesenburg principle and move it around in time a bit, but ultimately, its funded.
As for Richard, he can't even state how big the pension debts are on the balance sheet, and he's an Accountant. He can't even talk about IFRS when it comes to debts.
So a simple test. Print vouchers. Pay Public Sector workers in vouchers. No need for tax or fines. Do you think they will complain?
Why is it that those who swallow the taxes don't fund government so keen on having the rich pay more tax? You don't need it so you don't need to tax.
What would the required tax rate be if a flat tax was even possible? So everyone paid the same and all tax avoidance was stopped. It seems to me at least, it's those individuals and corporations that bend the rules to avoid paying even a 20% tax bill, that prevent a flat rate working.
The tax burden on the low paid is too high, however, what would be the impact if we leave VAT and corporation tax as they are. Set the income tax tax free band at £20k or £30k. Abolish the CGT and Dividend tax free bands. Charge 20% tax on worked incomes, Capital Gains, dividends, interest and other forms of unearned income and Inheritances. Charge 10% NI on earned income, above £20k and on Capital Gains, dividends and other forms of unearned income. Credit those working part-time but earning less than £20k with NI contributions for pension calculation. Simplify IHT nil band to £500k per person. Use the resources freed up at the Inland Revenue to ensure that all pay their taxes due, starting with those with the greatest amount to pay.
Perhaps she wants a flat tax and a pay ratio, so execs can only earn, say, 40 times the lowest paid. Oops! I'm dreaming...lol
What about a flat tax of 45% with increased allowances ( say 20k) so that the poorest paid little or no tax?
The allowance should be 0, that way the poor pay their share
@@Darren-i1w If everyone paid their "share", the rich would be paying £1000s for a tin of tomatoes. The system skews rewards towards those with the most influence. Taxation attempts to flatten that somewhat while retaining the incentive to produce more (ie earn more).
@downshift4503 no it doesn't, tax is a punishment for success in life, cut gov services and spending, lower taxes
@@Darren-i1w Tax is not a punishment for success, tax liabilities exist in order to make people productive, ie it's coercive. What happens in practice is that money by its very nature accumulates to wild inequalities, far beyond what happens in natural processes (eg, no lion could dominate the entire African continent, but a human could do just that using money as a technology).
@@Darren-i1w Tax is not a punishment, tax liability exists in order to make people productive.
20% is nowhere near enough without moving to a society where all social and health security is based on private insurance, which effectively means inverted progression on tax-like expenses.
Can be done at 0% if we have Land Value Taxation instead.
@@physiocrat7143Even worse idea. What do you do about the old woman who bought her house 70 years ago and is now widowed on a small pension? She happens to live in London where land value has gone through the roof. She can't afford to pay a tax based on a land value she has no control over. Why should she be forced to sell?
A flat tax doesn't have to be a benefit to the rich. Have a flat tax of 60% and give a significant amount to low income people.
People would stop bothering to work.
Flat taxes can work very well, but they need to come with separate taxes. For example, you could have a flat 20% capital gains, and income tax, but scrap VAT for all goods and services, except for luxury goods (designer goods, Bentleys, Rolls-Royce, Jaguars, **luxury homes**, etc) where you could place a 40% VAT rate. For tricky dicky's you can impose a 40% levy on the importation (grey imports) of such goods to stop them getting around it.
This would suck a lot of money out of them, dampening their ability to corrupt the legislature.
Why would anyone want a flat tax!?! 🤷♂
Because you they're rich.
Good question. Earned wages should be taxed at 0%.
Assuming they only consider their own monetary gain, all those who currently pay a higher (income) tax rate than the proposed 'flat' tax rate would want it.
Therefore, a large majority of tory voters (who tend to be higher paid) would want it , plus the UK's depressingly high number of gullible/ignorant/propagandized voters (because they are deluded and possibly/probably have been deceived by a campaign of associated lies funded by the tory outfit) would vote for it.
Only discovering when it's too late that they've been conned and robbed...just as easily as ever. (See also: tory's 'brexit' scam)
The UK's media outlets may have changed from print/TV to WWW but the exclusively wealth serving propaganda that's pumped out to the unsuspecting masses has only become more devious in its design and more tailored to its prey's vulnerabilities/ignorance/unwariness.
If the rich actually paid their 20% or whatever, I think that would be quite the improvement.
Tories deciding to leave the single party system, by being worse.
Here's a radical idea - lets stop wasting tax generated revenue
It is absolutely correct that a flat tax rate of 20% is a very bad idea, but something must be done because the current tax system is penalising the poor. What about a flat rate of 50%? The introduction of such a rate MUST be coupled with negative tax. Negative tax replaces the tax allowance with a substantial universal cash payment that benefits the poor and is funded by the wealthy contributing more tax. They cannot complain about it because everyone is paying at the same rate.
Most people should. The welfare system has got out of hand, and we all have to pay. 1 in 5 people of working age live on benefits, greedy old pensioners want yet more free money, and let's not even mention the hordes of illegal migrants in their taxpayer-funded hotels. If a flat tax is a corrective to an out-of-control public sector then we should all welcome it.
Re flat rate of income tax (just income): You could probably find £40-50bn from the UC budget (currently £81bn), and get people back to work, and I'm sure could find a good chunk of £40bn of waste out the £169bn NHS budget, or spread some of that between other budgets. That's assuming we just cut, not that a flat rate of income tax will inevitably hike receipts from economic growth via VAT receipts, which in term improves corporate tax receipts, creates jobs etc etc.
The staggered higher(+) income rate tax threshold policy is inherently and anti-wealth creation policy that punishes hard work, particularly the gap between £100 and £125k when the personal allowance is effectively repaid by the earner.
I’ve often thought that there should be a personal allowance of say £25k and a flat tax of maybe 35% -40% (depending on how much that would raise/cost) on income over that. Would that work?
no because it doesn't deal with outrageous income inequality.
What about a flat tax of 90% with a tax free allowance of £80k? No more ridiculous than what bad Enoch wants but turns the outcome on its head.
Also a decent land tax, can't hide land in an overseas account. Low land tax on primary residence, parks and land used for farming, high tax on unused hoarded land that could be productive and golf courses.
So how's the MoD going to pay the land tax? How's the National Trust going to pay the land tax? Hows the RSPB going to pay the land tax? All massive owners of unproductive land that's being hoarded.
So when that golf course is bankrupt because it can't pay the tax, then HMRC get the land. How are htey going to tax themselves?
With the simple flat rate tax obeying the 'simple, broad & low' principle you don't have tax free allowances, the whole purpose is abolish bands & thresholds. Any assistance is provided from tax collected not before it is collected. Your 90/80 model would result in the immediate collapse of society. No super skilled professional; doctors, engineers etc would keep working in the UK, the vast majority of the population would keep thir income below 80k and tax revenue would collapse as the £80k is way above the level where a huge chunk of revenue is currently raised.
@@andyinsuffolk Notice the common theme. Someone else pays so I don't.
Next, none of they say why the state needs to take 80% of the UK's income.
Why does the state need to make a 30% gross profit? That's its current profit margin.
@@adenwellsmith6908 - Land Tax is interesting because the land protected by a nation state is a fixed unchanging asset linked to natural resource usage; minerals, water etc. It's a unique category and land owners should not be subsidised by non land-owners in a democracy. So what about a very low rate which is excused when the land has public use/access or is owned by the state? Even a £1 an acre would raise tens of millions to run the land registry and land related overheads ??
Why are lefties so preoccupied with taking and banning? Why don't you focus on bettering?
This based on 20%…what about 25%…coupled with a higher minimum wage and arising the threshold for start. Really such a view, only equates poor economic with low taxes…which is no surprise.
A flat tax might actually trigger an energetic, wealth creating society which could afford those things you said would go because of a flat tax. They are not affordable now, as well you know, or should know. Britain does not have a Fairy Godmother and we both know, if you would admit it, that we are running out of wealth creating options and collapse is certain and imminent. No one is brave enough to spell out what we going to suffer. A flat tax might inspire the British to entrepreneurship instead of everyone wanting a cosy job in the public sector. The current path is over a cliff edge and those things you want will be as unavailable to the greedy, entitled British as they are now in the dusty villages and crowded favellas of the world.
Maybe we need a whole new approach, but I'm not sure handing the rich a pile more money is it.
Really, so how do you fix the problem, currently the wealthy pay higher tax rates, a significant contibution to the total income from taxation, with a flat tax their contribution to the total tax income drops by a very large amount, where/how is the loss of income to be compensated for?
@@jonno2000 I did reply in polite and constructive terms but it has disappeared. Must have trodden on some toes but can't be bothered to type it all in again. Sorry
50k pounds a year isn’t exactly a lot of money… that’s normal entry level for an engineer in the US… the UK isn’t what it used to be…
You need all the money you can get for healthcare. We don't have that problem in the UK.
Chat about something that wont happen but not talking about elections that are being delayed/cancelled. Who is the mad man.
This is one of the first videos of yours that has left a large gap in the explanation. You assumed 20% but I don't know why. What about a 35% flat income tax with a 20k allowance? Does that simplify the income tax system and balance out? I challenge you to come up with the best scenario you can for a flat tax and then destroy it with a counter argument? ;) merry Christmas and thanks for the videos, I learn a lot of great info.
Is there merit in treating all income as income? I work OT and face a far higher rate of tax than capital gains.
How's Brexitania doing up there? 🤣🤣🤣🤣 sunny uplands? rainy uplands?
The higher you get up the income scale, the more luxury spending you have, and that can stand to be taxed harder than the essential, “pay your bills” money.
I think it’s time for a £20k tax free allowance, then a 25% on everything to £100k and 50% on everything beyond.
Taxing 40% over £50k is inappropriate now with the way debasement has inflated wages.
They need to massively raise the level that you start paying tax, the cost of living has raised so much its becoming alot more difficult to manage now on a low income.
That would just push up core inflation.
The fallacy in this line of thinking is that government ought to tax incomes, when in fact the government cannot possibly have any legitimate moral warrant to tax incomes, unless the government itself was the instrument by which those incomes were earned.
That's completely upside down. In a fiat system, the government is the source of the money. You need it in order to settle tax liabilities. The government doesn't need the money, it needs you to produce output.
because the majority of studies show that it increases revenue and productivity.. it is not fair, but it works better
Tories learning from the GOP/maga playlist, give more tax to the rich!
I agree but Estonia has managed to do a lot with a relative low effective tax rate, it has a very efficient state.
Flat taxes would be grossly unfair, but conversely there is an upper limit above which the more wealthy in the economy cease to work and employ their capital.
If I were the chancellor looking to boost the economy, my first action would be to increase the level of income at which we all pay basic rate income tax.
You do realise that 'fair' is subjective right? The same treatment and rate for everyone is most definitely 'fair'....it's equal.
@ it is not unfair to have a higher rate of tax for the more wealthy in society, fairness is in my opinion linked to the ability of the wealthy to pay a higher proportion of that higher income.
Badenoch is insane and very obviously quite temporary hopelessly disconnected from voters and enabling wealthy people to be even more wealthy given they find more than enough ways to avoid existing taxes our former PM Sunak only paid an effective rate of tax of 23% through taking most income as capital gains just an example.
I would love you to devote an episode or two of your podcasts to your broad brush design principles for a more perfect taxation system - personal, corporate and VAT. There's such a huge range of possibilities that interested armchair economists are usually baffled.
We already do have almost a flat tax. Lower tax plus NI for lower incomes, just tax at a higher rate for higher incomes. NI is not different in some mysterious way, it is just a tax, paid straight to the tax man.
No we don't. 20% income tax, 40% income tax, 45% income tax. All of which has NI added onto to make it look like people aren't getting taxed at 50%
Land value tax is what we need.
Land value tax is definitely not what we need.
A flat tax is a fair tax. If a small business seeks to make improvements which increase its revenue, they shouldn’t be punished by tax brackets… which also harm people (like the waitress who works overtime to feed her family, only to discover the government has taken a greater share of her income for labor that’s even more taxing to perform because it’s above 40 hours per week). Anything other than a flat tax is, by definition, unfair.
Nobody really knows the answer to correct taxation. I would suggest that people like Richard possibly know more than most.
Yes, but the key is to get people to pay it. The super wealthy avoid income tax and the poor evade income tax
@@kevinsyd2012 The wealthy both avoid and evade. The poor are well...poor. Can't pay much when you don't have much.
He thinks he does. Flat taxes work well where they are used.
@@johnj4860 No they don't.
Richard's clearly knowledgeable but if you can't see how politically driven he is i feel sorry for you.
That's the wrong kind of flat taxation. The interesting kind is a transactional flat tax. Each transaction will have a small percent of tax, no other taxes. The rich move more money therefore they'll pay more. Unproductive jobs such as tax collection will be gone.
what happens when the rich horde money and assets? Is interest on savings and investment a transaction in your proposal?
@onsendiva4695 first, I didn't mention but sure there are downsides and problems with this system, I'm not claiming it's perfect or even good, rather an interesting system to discuss. As for your question, yes, any money transfer has tax on it. It's not just on the interest but on the entire transaction amount
What if we had a flat rate of 50% but a significant increase in the personal allowance such that it raises the same amount of revenue as the current system
That'd be grossly unfair. It'd shift the burden to wealthy people. How could that possibly be fair?
Have you factored in an increase in the marginal propensity to consume?
Marginal propensity to consume explains why rich people are useless to society. They must up their game 😹