As usual he was very keen to impress on me the positives of all things Estonian - including their system of 30% flat tax.
I've never been convinced by the proponents of flat tax - usually because they are a bunch of right wing nut jobs or US tea party loons. But Cicero made the case that it actually can be progressive (in the true use of the word) and is fearsomely efficient - the 'fiscal drag' (the amount of money lost through collecting tax) is miniscule as a result of its simplicity.
The key is to have a sufficiently high tax rate and a sufficiently large tax free allowance. For example if the UK introduced a 40% flat tax on all earnings over £20,000 (earnings up to this level - approx 80% of average earnings - would be tax free) the
£15,000 = 0
£25,000 = 8%
£40,000 = 20%
£100,000 = 36%
And it would be much much simpler to collect. The complexity of the current tax regime is reflected by the fact the Revenue and Customs currently employs nearly 75,000 people (not all obviously involved in tax collection) and spends £39 billion each year. (Source HMRC accounts)
Given it can be progressive, is clearly far more efficient to collect and results in government getting more revenue bang for its buck - it's time the Lib Dems and the coalition look seriously at a flat tax for the UK.
We also talked about Estonia's land tax, but that's another story...