Treasury dismisses flat tax

The Treasury has dismissed argument for a ‘flat tax’ – according to
information obtained by the Financial Times.

Papers released under the Freedom of Information Act suggest the Treasury is
not keen on the idea of a simplified tax system comprising the same rate of tax
on all income.

The move would not necessarily increase compliance, nor would it be
necessarily progressive, the discussion paper said. Evidence on increased
compliance was ‘at best mixed’, and suggestions that all would gain from a
trickle down effect of the tax system required ‘heroic assumptions,’ the
Treasury document said.

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