A taxpayers lobbying group has an interesting model of how a flat tax might work. What does the quote suggest – we have an infinite tolerance for financial pain?
Remarkably, the UK Treasuryâ€™s model of the economy, as well as those operated by private think-tanks, assume that if the top tax rate were to double from the current 40% to 80%, revenues would also double and taxpayers would not modify their lives in any way, choosing to work almost for free for Brown. The truth, of course, is that such a massive tax increase â€“ or even one which took the top rate to 50% or 60% â€“ would trigger economic Armageddon. Millions of people would quit their jobs, leave the country or shift to the underground economy â€“ as Ayn Rand put in her bestselling classic novel, Atlas Shrugged, the wealth-creators, thinkers and doers would go on strike.