Wednesday, 5 March 2008

Finance and Investment

I have been thinking a lot about tax lately and about what is fair to all. Our present system is not properly integrated and certainly doesn't look after the poorer members of society.

I really liked the idea of a flat tax rate but one Dr Adolf Stroombergen the chief economist at Infometrics takes that idea one step further. What about, he says, a flat rate of personal income tax combined with a universal guaranteed minimum income (GMI).

What about he says a flat tax rate of 25% and a GMI of $10,000. Tax is paid on every dollar of income whether wages or investment. The strength of a GMI system is that all of the big social welfare benefits (unemployment, sickness, superannuation) would all be rolled into GMI. If you lost your job or became ill or were too old to work you would automatically receive the $10,000. No application form, no means testing. Imagine the money the government would save through employing thousands fewer civil servants!

Your thoughts and comments are welcome.