Simpler approach to tax and money benefits everyone

In the video below, Martin Wolf describes an alternative financial system that would work in the public interest and encourage the right kind of risk-taking. This kind of radical financial thinking is what we need. We certainly need to stop believing what the wealthy tell us who have a vested interest in the current system.

The focus on simplicity and transparency is similar to some tax ideas I put on Twitter yesterday. In a nutshell, politicians should stop trying to incentivise our behaviour through complex tax reliefs and should run a much ‪#‎simpler‬ ‪#‎fairer‬ ‪#‎transparent‬ ‪#‎better‬ tax system.

As an example abolish all the current tax reliefs and abolish National Insurance switch to

  • £20K tax-free income threshold for people,
  • 40% flat rate income tax on people,
  • 5% income tax for local authorities
  • 5% revenue tax on businesses
  • a flat rate 15% VAT on consumer purchases.

This then stops all the tax avoiding behaviours because there is nothing to avoid. There is no pension tax relief, no mortgage interest relief, no eis. Then people will behave in their own best interests and not to avoid a tax. I am sure the economy would work better.

Martin Wolf understands the financial system better than me and explains it here