Reply to post: Re: equal taxation

Hi Amazon, Google, Apple we might tax you on revenue rather than profit – love, Europe

Anonymous Coward
Anonymous Coward

Re: equal taxation

Now both can afford to live and to save for the future, so the state now has a stable £6 revenue.

That ignores the effect of indirect taxation.

Make the flat rate 10%, with 25% sales tax on luxuries. Cost of living is still £9/week.

A earns £10 a week and pays £1 tax. £9 to live on. Can't afford luxuries, but doesn't die, has incentive to earn more since even £1 extra will mean 90p to spend.

B earns £20 a week and pays £2 tax. £18 to live on. Spends £9 on essentials, chooses to spend £9 on "nice stuff". State gets 25% of that £9, £2.25. B also has incentive to work more, since they'll only 'lose' 10% of the extra.

Total state revenue is a stable £5.25. Even if B saves/invests some of their surplus any gains will be taxed, and it will be spent eventually.

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