Commnetators are right to suggest that we may be 

approaching a tipping-point, where raising taxes 
becomes counter productive.

Evidence suggests that there is an inverse 
relationship between the tax rate and the amount 
of revenue collected. The higher the tax rate the 
lower the Government's revenue In making the 
case for lower taxes, we need only look to the 
Russian Federation, following the demise of the 
Soviet Union in 

1991. In order to invigorate a sclerotic economy, 
the introduction of a flat tax resulted in a 25% rise 
in revenue from personal income tax, followed by 
a similar increase in the second year and 15% in 
year three.

The Laffer curve predicts such an outcome, 
attributing the primary reason for increased 
revenues to higher levels of economic growth, 
stemming from the introduction of the flat tax. If 
the UK Government were to adopt this model it 

would also benefit the exchequer by increasing 
declared income and reducing bureaucracy by 
simplifying the way tax is calculated and collected.

 A flat tax would have a transformative effect on 
employers and employees alike. It would 
incentivise, generate growth, boost consumer 
confidence and raise living standards.