
Originally Posted by
Lasterman
My own view is that, rather than this being cloak and dagger, everyone should pay a flat rate of income tax, irrespective of earnings. That would pretty much wipe out avoidance and evasion at the upper income levels, and attract a lot of high net worth individuals into the country, bringing their money and their jobs with them. I believe this could be achieved at a flat income tax rate at, or lower than, the current basic rate.
There's quite a bit of research that shows that as you increase tax rates beyond about 45%, no additional revenue is forthcoming because of avoidance and satisficing behaviours. It would be interesting to see how the overall tax take changed if top rates were slashed. I know what I think would happen, but it's untested in an economy like ours as far as I know.