Wealth can be used as a reduction factor for calculating living income and flows into their • after-tax income, so we have a small proxy for a wealth tax, which is sorely needed No more dole, no more pensions and no more complex and penalties • Absolute transparency and fairness when adjusting the budget • Disadvantages Some groups may be disadvantaged under the new system and complain. If some people are disadvantaged by comparison to the current system then one has to ask, what is special about them? lfthere is something special about them, then this can be built into the living income calculation. If not, they should have no complaint. Transitional arrangements could be devised. Some may object that the very wealthy will only pay the same marginal tax as everyone else. This is academic. We know that truly wealthy people will have arrangements to minimise their tax. More importantly since holding assets will result in a lower living income payment the truly wealthy will receive a lower welfare payment. It must also be recognised that income taxpayers pay the bulk of the net tax raised so why should they be expected to pay at a higher marginal rate? The system is already progressive. Tax revenues will no longer grow through bracket creep. If the purpose of a progressive tax system is to provide governments with an easy way to grow revenues then it is a travesty. Lower reduction rate than present welfare payments may cause a budgeting problem.
• Wealth can be used as a reduction factor for calculating living income and flows into their after-tax income, so we have a small proxy for a wealth tax, which is sorely needed • No more dole, no more pensions and no more complex and penalties • Absolute transparency and fairness when adjusting the budget Disadvantages Some groups may be disadvantaged under the new system and complain. If some people are disadvantaged by comparison to the current system then one has to ask, what is special about them? lfthere is something special about them, then this can be built into the living income calculation. If not, they should have no complaint. Transitional arrangements could be devised. Some may object that the very wealthy will only pay the same marginal tax as everyone else. This is academic. We know that truly wealthy people will have arrangements to minimise their tax. More importantly since holding assets will result in a lower living income payment the truly wealthy will receive a lower welfare payment. It must also be recognised that income taxpayers pay the bulk of the net tax raised so why should they be expected to pay at a higher marginal rate? The system is already progressive. Tax revenues will no longer grow through bracket creep. If the purpose of a progressive tax system is to provide governments with an easy way to grow revenues then it is a travesty. Lower reduction rate than present welfare payments may cause a budgeting problem.
003_-_david_pearce.docx