If discussion of systems of taxation could be electrified, this is the idea to do it.
It will make the Tory leadership campaign a bit more meaty to. It's even fired debate here in Observer Towers. That's one rock 'n' roll meme.
Since the Observer will at some stage probably want a leader comment on the subject, the blog has to do some homework to get a view. The blog is not so good with numbers. Pictures, yes. No numbers.
And so to the links. The (rightwing) Adam Smith Institute states the case for in some detail. (That's a pdf, by the way.)
The Guardian is having none of it.
On the blogs, Owen is in favour, and has some more good links. And as ever, there's a pointed debate down at The Sharpener.
We'll do our homework and get back to you.
One thought in the meantime. The proponents of the idea seem quick to point out how many countries in Eastern Europe have adopted a flat tax, among them Estonia, Latvia, Lithuania, Russia and Ukraine. It is not clear whether or not the mere fact of someone else having done something is being mobilised as an argument in favour of doing the same, or whether it is just a point of inteterst.
But having spent some time in all of those countries I would warn against drawing any meaningful conclusions from their tax systems. This is for the simple reason that in my experience of the Baltic states and Russia, hardly anyone pays any taxes anyway. The grey/black economy accounts for a huge proportion of private earnings. People get two salaries - an official one that goes through the books, and another one 'in the envelope' that doesn't.
The Russians state is bankrolled by revenues from oil and gas exports; the Baltic ones, to a considerable extent, by revenues from the transit of oil and gas exports from Russia. The super rich avoid their taxes completely.
Caveat: Since EU accession the Baltic states have cleaned their act up a lot. (Russia is still corrupt as hell.)
