Page 2 | Radical tax reform

Nchangeo · 2025-07-28T09:59:01+00:00

Lots of talk on here about taxes, HE, wealth taxes etc. Countries a mess. Something needs to change. But with current levers to pull everyone feels it’s unfair. I ran the numbers on a radical idea last night. Universal Income (non-means tested and non taxed): £500 per week per adult. Replaces all benefits. Flat rate of tax for all earnings replaces all other income taxes; National Insurance, Student Loan repayments etc. To balance the books as currently stands this would mean a flat rate of 61% on income. If we put it to 70% then we could pay off the deficit in 11 years and start a national wealth fund. Would you be better off or worse off under this system. Would you mind being worse off if it means it’s fair to everyone and hopefully the country improves? What do we think? I was quite surprised the numbers worked.

Mrsbloggz · 28/07/2025 13:14

OverlyFragrant · 28/07/2025 13:11

I think the whole taxation rules needs completely scrapping and rewritten for a modern era.
Too many archaic tax rules, exemptions and random taxes to consider.
Just start from scratch, make it progressive and properly tax corporations creaming it in but funneling the sales in Ireland to avoid UK taxes.

I agree but generally speaking the rules and laws are designed to protect and preserve existing power structures. The people who benefit from those power structures are in control of the laws which keep them in place.
Tldr: they've got it all sewn up.

twistyizzy · 28/07/2025 13:15

Nchangeo · 28/07/2025 13:14

Everyone would be getting the same money. And everyone would be getting taxed the same 60-70%

Whats the minimum you need to live in U.K. out of poverty. If anyone has suggestions I will rerun but with UI at these levels and see what flat tax rate is then.

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So what's the incentive to work? There isn't one. That's where your back of a fag packet falls down. Fewer people work = less tax receipt = can't pay the UI!
Really isn't rocket science

TerminalMoraine · 28/07/2025 13:15

millymollymoomoo · 28/07/2025 13:09

We need to tax much less, reduce benefits significantly and massively cut public sector spending

Hi Liz, you’ve been quiet for a while.

Tryingtokeepgoing · 28/07/2025 13:16

Nchangeo · 28/07/2025 13:09

Perhaps I need to lower the Universal income. We could then drastically reduce the tax %. The idea is it replaces UC safety net but equally for all. So those on it aren’t discouraged from exiting, saving, or owning a home; and middle earners who work FT and seem to earn very little difference in take home with people having rents covered on UC are treated more fairly.

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Scrap the universal income. Cap benefits at the personal allowance. Provide proper social housing. Apply a flat rate income tax that includes NI. Say 30%. Extend VAT to everything and keep at 20%. Eliminate all working tax credits above the personal allowance. Incentivise investment by taxing profits and capital gains at a flat rate. Say 25%. Elknate distortions in the market created by stamp duty. Save billions in HMRC by automating and simplifying. Save billions in whatever the DWP is now called by automating and simplifying. Job done ;)

Mrsbloggz · 28/07/2025 13:16

Nchangeo · 28/07/2025 13:14

Everyone would be getting the same money. And everyone would be getting taxed the same 60-70%

Whats the minimum you need to live in U.K. out of poverty. If anyone has suggestions I will rerun but with UI at these levels and see what flat tax rate is then.

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Vastly inflated property prices combined with regional variations in property prices make it very difficult to come up with a figure which is universally applicable.

twistyizzy · 28/07/2025 13:16

TerminalMoraine · 28/07/2025 13:15

Hi Liz, you’ve been quiet for a while.

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Hi Rachel, bit hypocritical considering you've achieved the same thing as Liz, twice!

Simonjt · 28/07/2025 13:17

We would be significantly worse off.

You say people would already have £26k, thats a tiny bit over the living wage, and under the living wage for London, the living wage is survival levels, which means people are likely in high stress etc due to only just getting by. Would a worker at say morrisons work 37 hours a week, pay for childcare, transport to work etc to keep only 30% of their actual wage? 30% of minimum wage is not a lot, it certainly isn’t enough to top someone up to have enough to have a good quality of living unless they live somewhere with incredibly cheap housing.

OP how many adults do you know who would happily work for £3.60 an hour?

Mrsbloggz · 28/07/2025 13:17

Provide proper social housing
👏🏻😊
But fat chance of that actually happening ☹️

Original poster

Nchangeo · 28/07/2025 13:18

Tryingtokeepgoing · 28/07/2025 12:55

No one is going to work if 70%, before any pension contributions, is taken off them and based on your minimum universal income no one will work in shops, restaurants, care homes, factories and many other places. So the country wouldn’t function.

I agree a flat rate tax and simplification of the tax code would have some benefits, but you have to consider the total tax take which includes tax on spending (VAT, duty etc) which are in part to influence behaviour, and taxes on profits which also need to be at a level to encourage investment.

So, perhaps there’s a case to be made for a personal allowance set at the level of the living wage, no other allowances or ‘credits’ and a flat income tax rate of, say, 30% above that, which VAT at 15% on everything and corporation tax at a flat 20% as well. No NI and much higher duty on alcohol, fuel, cigarettes, vapes and other things that we want to discourage. Then change per mile for driving, limit cars to those who have a parking space and better public transport. I haven’t run the numbers, but I’m sure there’s a plan there 😂

Yes this is what I am trying to do. Something like this.

I have to go out soon so probably won’t be able to get to this until this evening but will post that scenario when I run it.

OP posts:

Londonmummy66 · 28/07/2025 13:19

Nchangeo · 28/07/2025 11:22

3 YABU votes? I assume you would be worse off? What is the change in your take home?

I ran this for low and medium earners and it actually works out quite well for them

How's that going to work if someone needs to pay a London rent? And then London childcare for preschoolers?

twistyizzy · 28/07/2025 13:20

Tryingtokeepgoing · 28/07/2025 12:55

No one is going to work if 70%, before any pension contributions, is taken off them and based on your minimum universal income no one will work in shops, restaurants, care homes, factories and many other places. So the country wouldn’t function.

I agree a flat rate tax and simplification of the tax code would have some benefits, but you have to consider the total tax take which includes tax on spending (VAT, duty etc) which are in part to influence behaviour, and taxes on profits which also need to be at a level to encourage investment.

So, perhaps there’s a case to be made for a personal allowance set at the level of the living wage, no other allowances or ‘credits’ and a flat income tax rate of, say, 30% above that, which VAT at 15% on everything and corporation tax at a flat 20% as well. No NI and much higher duty on alcohol, fuel, cigarettes, vapes and other things that we want to discourage. Then change per mile for driving, limit cars to those who have a parking space and better public transport. I haven’t run the numbers, but I’m sure there’s a plan there 😂

Charge per mile for driving slightly falls apart for rural areas which have few local facilities within walking distance.

Simonjt · 28/07/2025 13:20

Mrsbloggz · 28/07/2025 13:17

Provide proper social housing
👏🏻😊
But fat chance of that actually happening ☹️

Its such a huge shame isn’t it, the UK desperately needs either a huge increase in social housing, or significant changes to the rental market.

Venalopolos · 28/07/2025 13:21

Mrsbloggz · 28/07/2025 13:05

I’d rather just live more frugally and with more free time
@Venalopolos this is also my preference but it's difficult to live frugally when the basics of life (such as housing and fuel) are overpriced/unaffordable🤬

Well yes but in this scenario the £4k universal income per month for me and DH would cover our bills and housing costs (assuming we took on a smaller mortgage for say a 2 bed terrace instead of our 3 bed detached). And working won’t pay enough for the holidays etc I’m accustomed to, so I don’t really see the point in working full time - I could just do a few hours a week for pocket money and fun spends and then be done. No more 40-50 hour stressful weeks.

SpaceRaccoon · 28/07/2025 13:21

Then change per mile for driving

And fuck anyone who lives rurally. Marvelous.

TheCurious0range · 28/07/2025 13:22

So I've just spent twenty years paying back my student loan with extortionate interest and now I have to pay others'?
I would be worse off financially with this system, having also received absolutely no benefits when I was on lower income and having worked multiple jobs for years to balance my books and to get to where I am now and before anyone asks no I didn't get any parental hand outs my parents both left school at 14 with no qualifications. Interestingly neither of them have ever claimed anything either

twistyizzy · 28/07/2025 13:22

Venalopolos · 28/07/2025 13:21

Well yes but in this scenario the £4k universal income per month for me and DH would cover our bills and housing costs (assuming we took on a smaller mortgage for say a 2 bed terrace instead of our 3 bed detached). And working won’t pay enough for the holidays etc I’m accustomed to, so I don’t really see the point in working full time - I could just do a few hours a week for pocket money and fun spends and then be done. No more 40-50 hour stressful weeks.

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And we would all do that hence tax receipt would fall = no more UI cos no-one would be working enough.

twistyizzy · 28/07/2025 13:23

@Nchangeo you would basically bugger up productivity which would mean less and less £ coming in. Within a short period of time your plan would be unsustainable and collapse.

MalcolmMoo · 28/07/2025 13:24

If my income was taxed at 70% there’d be no point me working 😆

Tryingtokeepgoing · 28/07/2025 13:25

Did you see my ‘better public transport’ statement that went in line with that ;)

I’m sure that by eliminating road fund licence, and a variable cost / mile based on location a solution could be found. So, use a car in an urban area well served by public transport, pay £1 a mile, use a car in a remote rural area and pay 1p a mile.

Original poster

Nchangeo · 28/07/2025 13:27

Simonjt · 28/07/2025 13:17

We would be significantly worse off.

You say people would already have £26k, thats a tiny bit over the living wage, and under the living wage for London, the living wage is survival levels, which means people are likely in high stress etc due to only just getting by. Would a worker at say morrisons work 37 hours a week, pay for childcare, transport to work etc to keep only 30% of their actual wage? 30% of minimum wage is not a lot, it certainly isn’t enough to top someone up to have enough to have a good quality of living unless they live somewhere with incredibly cheap housing.

OP how many adults do you know who would happily work for £3.60 an hour?

Yes so here someone in Morrisons on minimum wage is earning 20,662.44 take home.

Plus likely universal credit at variable rates plus more if renting. Thats them then trapped and we pay for them forever.

Under the 61% model they would earn 9228 so total take home £35282
Under the 70% model they would earn 7137 so take home £33137

OP posts:

TheignT · 28/07/2025 13:28

Tryingtokeepgoing · 28/07/2025 13:16

Scrap the universal income. Cap benefits at the personal allowance. Provide proper social housing. Apply a flat rate income tax that includes NI. Say 30%. Extend VAT to everything and keep at 20%. Eliminate all working tax credits above the personal allowance. Incentivise investment by taxing profits and capital gains at a flat rate. Say 25%. Elknate distortions in the market created by stamp duty. Save billions in HMRC by automating and simplifying. Save billions in whatever the DWP is now called by automating and simplifying. Job done ;)

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Capping benefits at personal allowance level would surely mean some severely disabled people would die as they couldn't afford care.

twistyizzy · 28/07/2025 13:28

Tryingtokeepgoing · 28/07/2025 13:25

Did you see my ‘better public transport’ statement that went in line with that ;)

I’m sure that by eliminating road fund licence, and a variable cost / mile based on location a solution could be found. So, use a car in an urban area well served by public transport, pay £1 a mile, use a car in a remote rural area and pay 1p a mile.

And how do you fund brand new bus routes (across swathes of the UK) at same time as a falling tax receipt? Do you know how large some of the rural areas in UK are? Or how inaccessible they are in bad weather?
You just want to say "fuck you" to rural communities.

SpaceRaccoon · 28/07/2025 13:28

Did you see my ‘better public transport’ statement that went in line with that ;)

Still doesn't work - we have to lug heavy items from the nearest city (1.5 hours drive way) in a pickup - that's not exactly feasible on the bus.

Tryingtokeepgoing · 28/07/2025 13:32

twistyizzy · 28/07/2025 13:28

And how do you fund brand new bus routes (across swathes of the UK) at same time as a falling tax receipt? Do you know how large some of the rural areas in UK are? Or how inaccessible they are in bad weather?
You just want to say "fuck you" to rural communities.

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I live in a rural community…. I thought this was a light hearted thread on how to radically change the tax system…but it’s easy to see why little changes in this country if people are so resistant to new ideas ;)

MaturingCheeseball · 28/07/2025 13:32

I read an article about UBI with the author extolling the benefits of having the time to pursue interests/hobbies etc.

All I could think was that we’d need national service to force people to work in care homes/clean toilets or even work in a cafe.

There was a referendum in Switzerland on UBI and the idea was rejected as it would be a magnet for those wishing to come to the country with no intention of ever working.