Replacing a tax system?

[Rapscallion]

I've been mulling an idea over in my head for a while, and I figured i'd let the people I trust best to rip it to shreds loose on it. That's you.

The current tax systems in the UK and - from what I expect - the 'western' economies are monstrosities of legislation due to special circumstances for worthy reasons. This allows for loopholes or tax efficiencies etc for those with sufficient wealth behind them.

I'm currently contemplating an option for a national transaction tax to replace it all. Sod all this tax relief for X, income tax, VAT etc. One tax, and hopefully that's it.

In short, every time money changes hands a percentage of that goes to the government (or should - fraud always exists). Buy a pack of gum and a paper at the local store - a percentage goes to the government. Get paid - the same percentage goes to the government. Buy a house - the same percentage goes to the government.

When money changes hands, a percentage is taken by the government, and that's it.

I don't think it's an entirely good idea, as it involves hitting poorer people harder in ratio terms than the rich, but part of the scheme would also be a wealth redistribution to make sure that the poor are adequately funded in the first place. Sue me if you think it's a socialist concept - I don't like people living in poverty conditions in a wealthy economy.

So, thoughts? I've not spent a huge amount of time on this, and it's somewhat idealistic, but I don't have a problem with the second part of it.

Rapscallion

[Andara Bledin]

Transaction taxes are notoriously regressive, harming those at the bottom who do most of the transactions while those at the top barely feel it.

Tiered income taxes are a much saner method of revenue generation, allowing those at the bottom to barely feel the sting while those at the top who are actually benefiting the most from the system are also required to pay in the most to support the system that supports them.

Even a system with zero exemptions can be made to work and work well, but those at the top -thus those with an inordinate amount of the power- will never go for it due to a combination of greed, sociopathy, apathy, lack of empathy, short-sightedness, a fundamental lack of economic understanding, and some good old fashioned resentment.

Ultimately, a system that prevented those from the bottom from sinking would actually be to the benefit of those at the top, but it takes more than a cycle for the money at the bottom to trickle it's way to the top and in a world where instant gratification is the order of the day, a system that would benefit everybody in a decade just isn't fast enough. >_<

Nevermind the whole sentiment of "I'm self-made, you can be too," bullshit fantasy that's a screen for plain old vanilla assholery. The idea that someone else might be getting something, even just enough to not starve bothers a lot of people, most of whom have issues with self-esteem that causes them to have to measure by comparing how much they have/make with other people in an incredibly shallow counting of coup.