Basically, I would be much more radical than even Lord Kaldor. It is because you are trying to tax income, capital or income from capital that a variety of complications arise in our tax system and our tax code gets ever more elaborate. Beyond the small range of PAYE-type incomes, income is not definable conceptually in economics. Therefore, when you try to tax something called income, you get into complications because people can find ways of redefining whatever it is as not income. The whole approach is really to go down the expenditure tax route—purely expenditure—and not to worry about income of other kinds. If people are deriving income from capital, that is fine. What we would want to know is what expenses they incur in trying to do that, and tax that.
Especially now when we are in a very different dispensation than we have been used to for the past 50 years, we will have to be radical about rethinking our taxation. I would even go further and not worry about considerations like that.
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