Single tax rate
Sir: The article 'Poverty—a new approach?' by Professor Vaizey (28 November) prompts me to submit to you the concept of my own ideal tax and benefit system. This consists of two parts, the Rate and the Dividend. Every pound earned by everybody is taxed at the same rate, chosen so as to bring in the same total return as the current system of income tax and surtax plus unemployment, health and state pension contributions. At the same time every adult resident in the country receives a dividend which is at least equal to the minimum necessary to support life above the poverty level : children would receive a half divi- dend. The single tax rate would take the place of our present fan- tastically complicated system of graduated taxes and allowances. The single dividend would take the place of our present.equally com- plicated system of unemployment and sickness benefits, family allow- ances, state pensions. student grants, etc., since it would be paid to all adults, married or single, young or old, healthy or sick.
I believe that this system would fulfil most of Professor Vaizeys objectives. It would also be easy to administer, releasing armies of revenue collectors and distributors for more interesting and profitable work. There would be no refunds (which might mildly discourage strikes at the end of the fiscal year) and all the paperwork associated
with claims could be avoided. Savings might be encouraged by paying the dividend direct into -a Savings Bank. The population ex- plosion might be discouraged by limiting the children's dividends to, say, three in any one family. There would be none of the present tax encouragement for 'living in sin' (but no discouragement either). The extreme simplicity of the system makes it difficult to cheat—the more complicated the tax laws the more chance there is for the evaders, who are usually as clever as the tax inspectors and more highly motivated, to find a loop- hole. And one can think of many other benefits.
Can you see any flaws—except for the career prospects of tax accountants?
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