Why a 23 percent Flat Tax Leads to Inequality

An examination of the economics of flat taxes

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RENUA propose introducing a single 23% tax on any income over €8,000, including welfare payments, and abolishing the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).

 

Currently Ireland has two basic rates of income, 20% and 40%. Depending whether you are single, a lone parent or married the higher rate of tax kicks in between €33,800 and €42,800. Everything below this amount is still taxed at 20%.

 

Therefore you won’t take home less because you’ve moved into the higher bracket.

 

This is called a progressive tax system. The idea is that those who can afford to contribute more to the public system should pay more.

 

Proponents of the flat tax model argue that it is a fairer system to charge everyone the same rate, and that the progressive tax model essentially penalises those who work.

 

They also suggest that a simpler system of tax would free up resources to tackle those trading on the black market, such as under the table cash payments for services, which currently totals over €20 billion a year.

 

RENUA leader Lucinda Creighton also argues that the lower tax rate would mean that there would be 20% more in disposable income which people would reinvest back into the economy by increasing spending on goods and services.

 

However there are two specific issues with the idea of a flat tax. The first issue is the unequal impacts of having the same rate of tax regardless of earning.

Continue reading “Why a 23 percent Flat Tax Leads to Inequality”

The Political Correctness Police

It is not just derogatory words that are at issue. It is assumptions as to how the world works without taking into account other viewpoints. The idea that you might define “opposing views as bigoted and illegitimate” perhaps might be because those views are, in fact, bigoted and illegitimate.

Johnathan Chait recently posted an article about the oppressive nature of political correctness. He defines political correctness as “a style of politics in which the more radical members of the left attempt to regulate political discourse by defining opposing views as bigoted and illegitimate.” The examples he uses of current day political correctness range from invocation of the term ‘mansplaining’, the use of ‘trigger warnings’ and the emergence of ‘micro-aggressions.’

His final conclusion is that political correctness is an ‘undemocratic creed’.

It is important to make a distinction at this point. Political correctness does not mean that certain types of speech are illegal. Yet, certain people are diverted from making certain statements for ‘fear’ that they might invoke the wrath of the political correctness police. Essentially he wants to live in a world where people can say what they want without facing criticism.

The basis of so-called politically correct speech is the idea that you have to be sensitive of other genders, races, sexualities and distinguishing characteristics. It is not surprising that these issues have emerged today given our growing awareness that society is not as binary as it once was.

When you have grown up in a world where you did not face societal boundaries, where you had more opportunities and did not have to worry about systemic discrimination you don’t need to worry so much about how things like speech can reinforce an unfair system. However, when you belong to any group of people who are treated as less than, language matters.

Continue reading “The Political Correctness Police”