Just a quick post on the nature of fairness.
This week there's been a fair bit of talk by George Osborne and others within the Conservative Party about the possible introduction of flat tax as a fairer system of tax than current income tax. Fairer, because it sets a basic rate of tax which everyone is liable to pay with no sector being discriminated against.
What got me thinking about fairness is that this system is clearly both fair and unfair at the same time. Charging everyone the same rate certainly does seem fair, but it means different things to different groups, which means it's not fair.I think the difference is between fairness and universalism, which seems to be the main distinction between the two extremes. Basically, flat tax is universal because it applies everyone equally even though the effects may not be equal. Another example would be the British legal system, which is also universal in principle but, for example when levelling fines, doesn't take into account a persons capability to pay that fine with the charge being the same whether the individual is rich or poor.
Now obviously we feel that our legal system is reasonably fair (well maybe not, but it's not like we're rioting in the streets just yet). So maybe a flat tax is fair too? Well, no. Not really.
Even exempting the poorest from paying any tax at all, the real winners from a flat tax are the really high earners whose tax rate under flat tax would drop from 40% to 22%, saving them huge amounts of money each year and completely belittling the extra £1000 that someone of minimum wage would get. Anybody between the cut-off point for not paying flat tax and the current higher tax rate would suffer massively, and that group would likely consist of the average wage earner at around £22'000. With some losing greatly and others gaining even more, it can hardly be called fair, now can it?
Basically, we what have is a new type of tax to help a small minority disguised in word which make it sound like it's equal and fair. What we're actually getting is a tax break for the rich, with a little sweetener for the poor as some thinly veiled attempt to buy them off. It's not fair in the slightest, and, most laughably, the person that wrote the book on which the idea is based doesn't think it will work.
Thing is, we seem to be entering a phase where the Conservatives have realised they need to engage more people and gain more than just right wing support. They some very promising young members in David Cameron and George Osborne and for a change it seems like the Tories might be making some progress. (Mat has talked about the possibility of a Lib-Dem/Tory alliance along a new axis of politics elsewhere and he's not wrong) But this is clearly not a move which is going to bring the Tories back to the centre, it's just a new policy designed to make the rich richer and screw everybody else. The whole point of trying to help the poorer sections of society is to give them a better chance of doing as well as everybody else, and taking money away from them isn't the way to go about it. When it comes to money, some people do need more of a leg up than others. It's hardly 'positive discrimination' to support the more needy in society over those comfortably well off - maybe it's not universal, but it's certainly more fair.