Admit it. You like a bit of heresy. That’s why, even if you haven’t read The Da Vinci Code, you know the gist of the plot.

Political
heresy can be intriguing, too. As for tax heresy, well yours truly
trotted along to a seminar on flat tax last night in Sydney, organised by
the Centre for Independent Studies.

“In
the last 15 years,” the CIS says, “ten countries have adopted a flat
tax system, but in Australia, the Treasurer has deemed it financially
impractical and the Prime Minister has criticised it as ‘unfair.’…

A ‘flat tax’ means everyone pays tax in proportion to their
income. At a flat rate of 30%, for example, someone earning $50,000
pays $15,000 tax while someone earning $100,000 pays $30,000 (assuming
there is no tax-free threshold).

Because a ‘flat tax’ would
apply to personal and corporate incomes, it should reduce tax avoidance
as well as improving incentives (personal incomes at present are taxed
at up to 47% while company incomes are taxed at only 30%). And because
there would be few, if any, allowances or deductions, a flat tax would
be much simpler.

Yet flat tax is a fraught area. Just ask Germany’s new Chancellor Angela Merkel.

Yet
here’s the heresy, if you’re a defender of the status quo: just because
a tax isn’t progressive, it doesn’t mean that it is regressive, does it?

Think about it – and we’ll look at this more this next week. In the meantime, a wrap of last night is available here – good to see that nice Mr Turnbull there – and there’s plenty more on real tax reform at the CIS’s site.