Concerning the Introduction of Flat Tax

04/02/2015 10:29 GMT | Updated 05/04/2015 10:59 BST

In recent years the adoption of the flat tax system, which would see all forms of tax such as national insurance and that of an alike nature been merged into one tax, has been seen in several Eastern European countries. This has resulted in a positive outcome and lead to reconsideration of the flat tax by many parties. In fact the evidence suggests that since its introduction there is little to object to its implication. Richard Teather's model in A Flat Tax For the UK assumes a 22 percent flat tax rate and a £12,000 tax-free allowance, which results in the just-below average income earners benefiting most from its implication, and sees that the poorest third of all earners gain proportionately more than the richest third.

Though the effects to which the implementation would be as follows it is likely that with changes and adjustments to the system the implementation effects could be neutralised within a short period of time. Implementing Teather's model would result in £50billion being required to close the cost neutrality gap. In 2013/2014 the NHS saw planned expenditure of £113.035billion, to which, with a result of a privatisation of the NHS, would result in the gap being closed, to the effect of leaving a surplus of £63.035billion being available for public spending.

At present Britain's tax code is in excess of 17,000 pages if one uses Tolly's tax code guidebook and subsequently as a result of its complexity requires professional accountants to serve individuals, businesses and other enterprises to ensure a complete and return accounts. The effect of which is a deterrent to entrepreneurial minds and a perceivable barrier to business, reducing job growth and reducing the number of possible SME's, which are driving the UK recovery as the London Stock Exchange (LSE) indicates in a recent article by The Guardian.

With the top 3,000 earners, who declared income of above £2.4million, are paying more tax than the total of the bottom 9million earners according to the latest government statistics. This is a contribution of 4.2% of Government revenue. According to HMRC's statistics almost one-third of income tax payers contribute less to the Exchequer than the top 3,000 earners - equivalent to 0.01% of the total. Such a statistic would be seen as a contradiction to the concept of equality, which is an absolute, as it would indicate the rich are carrying more of the burden to support the economy. As a result, it might be said an is-ought gap occurs when the proposition that the rich should pay more 'because they can afford to'. It is in fact the case that the top 25 percent of all earners pay 75% of all income tax, while half of the country contributes less than 10%.

At present the Tax and National Insurance contributions graph of 2013/14 visualised by The Independent, based on the statistics available from the HM Treasury and the Institute for Fiscal Studies think tank, illustrates that 25% of spending is done so on welfare. The Department for Work and Pensions (DWP) announced that as of May 2014 there were 5.2million working age benefit claimants and 4.93m individuals claiming Housing Benefit as of August 2014, which pay no or little tax. The cost of which is transferred to the taxpayer on a tiered based system, which, as previously detailed, a higher percentage is paid for by the highest earners based on an unfair and unfounded myopic ethical proposition of equality and fairness.

Where a flat tax system would be introduced the results would lead to the closing of loopholes and would encourage more economic activity across the country. For at the moment London is the financial capital of the world as result of present tax levels, in comparison to the rest of Europe they are relatively low. A position that might be weakened by political decisions such as Labour's potential plan to borrow £170billion and the clear decision of Ed Miliband to tax individuals more.

It would also allow for abolishment of double-tax's such as inheritance tax which penalise the inheritors of an estate which at present the current inheritance tax (IHT) threshold is £325,000 per person, £650,000 for a married couple -- as long as the first person to die leaves their entire estate to their partner. Anything over this limit is subject to a 40% tax bill, which is a tax on the individual's inheritance, which has accumulated as a result of the labour of the deceased, as argued by the 2020 Tax Commission. It is for such reasons the revaluation of a flat tax rate should be considered and implemented upon consideration of how the implementation's effects would benefit the UK, with the inconveniences of the system being amendable within a time frame of five to ten years.