"One simple income tax on all personal earnings no matter the source, then everyone pays on a level scale."
Its not that simple. If I have the same tax rate as a permie Ill be taxed twice as for liability reasons I have to operate through a limited company which if we all had the same income tax applied would mean I'd be taxed twice.
What I think you are missing out is that we DO have the same tax rates applied at the moment, anything I take from my company as salary is taxed at the same rate as the salary that you have.. what is different is that I can take some income in the form of dividends which are taxed at a lower rate, thing is once you take into account the expenses of running a limited company the rates average out fairly evenly.
Yes its still in the contractors favour or no one would do it - I suggest that if you think its so awesome and easy that you give it a try - I can give you the number of a reasonably priced accountant and recruiter... fancy it?