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Would an overhaul of the tax system be fairer than an increase in taxes?
As rumours of tax hikes to pay for the Covid lockdown start to circulate, would it not be fairer to overhaul the tax system than raise taxes?
We could abolish tax brackets and remove the loopholes that allow for 'tax avoidance' and introduce a single, blanket tax rate on all income for both individuals and corporations.
The alternative, raising rates of taxation or reducing the tax brackets, never seems to raise the expected amount. Let's face it, the people who can afford to avoid paying tax at the higher levels will just continue to avoid paying tax if those levels are increased and the burden will fall on the lower paid workers.
@Steve H - In theory yes, currently the lowest paid should pay the least percentage of their salary but the loopholes mean the highest paid can avoid paying anything more than a minimal amount. Removing the loopholes should mean the overall rate of tax can be lowered. Maybe add in a raise in minimum pay to counteract an increase in tax liability for the lowest paid?
3 Answers
- ?Lv 65 months agoFavourite answer
The lowest paid workers tend to pay the least percentage of their wages towards taxes. This overhaul in the form you suggest would either mean low paid workers have to contribute an additional amount or instead total government revenue decreases even further.
Getting rid of some tax loopholes would be a good idea though.
Edit: as per your update.
An increase in tax liability and remuneration for the lowest paid, would mean employers of those people are essentially paying extra to the government. Many of our most vulnerable members of society would lose their jobs.
- 5 months ago
That sounds like a flat tax and that has been considered to be racist since it disproportionately affects the poor who are disproportionately minors. Tax hikes do not work because higher taxes discourage activities such as working overtime and risking assets to make money. We know that a 0% tax rate produces $0 income but we also know that a 100% tax rate produces $0 income. So we then know that the ideal tax rate is somewhere in between.
- Anonymous5 months ago
Whilst your ideas are commendable we are all in the hands of Rishi. HMRC are constantly looking at ways to prevent tax avoidance. There is plenty of cash flowing into the Exchequer. But in the past too much has flowed out. Wiping out our EU membership fees and cutting Overseas Aid will make a massive difference to the deficit. High time too.
