Sunday 17 August 2014

What is the CLIPH-rate tax?

The CLIPH-rate tax is the acronym I developed as a shorthand way of describing my taxation proposals. It stands for Comprehensive Lifetime Income Per Hour rate.

This can be split into two components; hourly averaging and my proposal for a comprehensive acquired income tax base. The two proposals complement each other very well and are linked by the Lifetime element of the acronym.

The first component is my hourly averaging proposal. This is described in the acronym as ‘per hour rate’ and it is explained in detail the first two chapters of my book.

Hourly averaging allows taxes to be calculated not only on the amount that people earn but also the amount of time they have spent working (or doing some suitable alternative activity). This means that those who work longer for less pay can be assisted while those who earn a lot for each hour they work can be taxed.

The second component is my proposal to take account of all the economic gains that people receive during their life when determining their tax rate. This is the “Comprehensive Lifetime Income” parts of the acronym. My proposal can be understood as a hybrid which combines aspects of comprehensive income with consumption taxation.

These two components, along with others that go with them, are explained in more detail in my book, and I have said (and plan to continue to say) more about them in this blog as well. In my next blog I will explain the advantages of the CLIPH-rate tax in the briefest terms. 


Physiocrat said...

Why do you want to tax people's economic gains which they have earned through their own efforts? What principle is this notion based on?

dougbamford said...

I set out my principles here:
I would say that taking account of the amount of hours people have worked along with the amount they have earned is a much better measure of effort than any other available alternative.
I would argue that those who earn ten or a hundred times the amount per hour than the average don't put in that percentage more effort. The difference is much more likely to be down to good fortune.

Unknown said...

You do not mention risk. Extreme high earners often take huge amounts of risk. Taxing capital and labour separately is a slippery slope and deep argument. Are you ascribing access to capital to luck in your measure of output to be taxed?

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