Wednesday, July 30, 2008

UK tax credit gaffe...

...shows why lower, simpler tax system are always better.

Apparently, the tax collectors in the UK messed up bad. Lost records, zero'd incomes, and large tax credits being given incorrectly is going to cost the UK government £2.8 billion ($5.7-billion CDN). (Hat tip: Bourque)

Complexity combined with ineptitude caused this loss. A serious tax reform would solve much of this problem.

This never would have happened if the UK government eliminated specialized tax credits in favour of larger universal exemptions and lower, flatter brackets.

Good thing the Canadian government has a well-researched, fully-costed model to follow to avoid the same problems here.

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