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Steve Baker MP: It's time for flat taxes

Baker Steve I appeared recently on The Daily Politics to advocate tax simplification. In the way of things, the Beeb only used the section where I straightforwardly called for lower, flat taxes. I didn't object - I'm serious: low and flat taxes would be better for everyone.

Our austerity programme only deals with the deficit over five years, not the debt. We know we must lift our country's economy and spirits in the context of an awful legacy. We know the public must continue to pay the British state's inflated bills. We know we must create jobs. A flat tax would be an efficient way to set about it.

According to The Adam Smith Institute, countries which have introduced flat tax have increased tax revenue. The better off pay a lower rate than before, but higher total amounts and a higher percentage of the total tax take as the economy flourishes.

A flat tax would deliver simplification – an aim expressly included in the Coalition Agreement. It would do away with a huge amount of HM Revenue and Customs' bureaucracy and wearisome headaches for millions of taxpayers. Capital stashed away would return from abroad. In a low, flat tax environment, many people would revert to simply paying the tax instead of buying expensive avoidance schemes from experts.

There is justice in it, too. It's scandalous that minimum wage earners pay income tax and, for everyone, British taxes are excruciatingly high. In a just society, we would keep much more of what we earn and those hard-working, aspirant "alarm-clock Britons" would be increasingly free of tax and increasingly prosperous.

Finally, an economy can hardly be based on save and invest if the state taxes away what people might otherwise save. Real wages rise when capital is accumulated through saving. It would be better for those less well off if more were invested. Graduated taxes, like inflation, don't produce progress: they are regressive, inevitably making the poor poorer.

Radical tax simplification of this sort is supported by theory and practice. Consider for example Hong Kong and Georgia: here's Lado Gurgenidze, former Prime Minister of Georgia, and an attendee at our 2008 Party conference, explaining the recipe to transform a nation: 

Low, flat taxes should be part of turning Britain around. We should have the courage to make the case.

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