Much play is being made in the international media about the feasibility and practicality of introducing a single tax rate, as is after all being done in a number of Eastern European countries.

I will not be surprised if lobbying in its favour will start gaining ground in Malta too.

The “rationale” behind such a proposal is that a single tax rate would boost economic growth and increase personal freedom. As well as improve tax receipts.

One has to admit that the New Right has a particular knack for sounding innovative even when coming up with and recycling old and hoary ideas.

This issue has come to the fore during the recent election campaign in Germany. Whether it proved to be a plus factor or a definite negative for the CDU will have been established by the time this article appears in print. It might not have been enough to cost it an election but it surely accounted for the erosion of its base of support in more recent weeks.

One thing certain about this proposal is that it will increase the social divide by taxing and attacking the poor and the less wealthy much more than they are being taxed today. If at all.

One does not need to be a seasoned economist to realise that a single flat rate would benefit the better off at the expense of low earners.

Any income tax system bereft of an element of progressiveness will defeat its own purpose.

A flat rate income tax level would be even more socially unjust than the consumer driven VAT – an issue which incidentally has been long dead and buried in Malta since Labour had always made it clear a priori that if reintroduced by the Nationalists it would not dream of removing it once again.

As a consequence of the single tax rate being proposed in various European capitals the poorest segment of society would definitely end up paying a larger chunk of its income in tax.

Some countries which are proposing this single tax rate con game are even compounding it with a proposed rise in national insurance contributions as well as a further increase in VAT which in some cases approximates two per cent.

The claim that a flat tax rate will lead to an increased incentivisation to work still has to be proved anywhere.

In some countries like Estonia, revenue from personal income tax actually went down, not up, with a flat tax rate.

What many might find intriguing and attractive about this proposal is its inherent simplicity.

Nick Pearce the director of the Institute for Public Policy Research described its net effect this way:

“Although a case can be made for tackling complexity in the tax system, a flat tax solution is not just using a sledgehammer to crack a nut, but putting the nut in an antique bowl before taking a swing…”

Need I say more?

The UN summit – a missed opportunity?

This is the question on most commentators’ and political analysts’ lips right now. When does an opportunity become a missed opportunity? Obviously when it gets diluted and watered down considerably.

The UN, whether reformed or not, will always represent the sum of its parts. In other words, the political will of its individual member states.

If one takes too much of a narrow view of UN reform, one cannot find any excuses for claiming that the much cherished and long aspired reform is no reform at all.

This no doubt applies to various areas of importance, including the whole question of security council reforms where the so-called G4 have been lobbying for months on end to achieve some form of enlargement of the council.

One interesting observation I came across is that one can understand a certain attitude when the majority of UN general assembly member states were non democratic states, but things have changed radically since then and the number of electoral democracies has increased considerably, as confirmed by human rights think tank Freedom House.

Let us sincerely hope that we are still in time for a true and proper reality check!

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Leo Brincat is the main opposition spokesman on foreign affairs and IT