In reply to Andrew Lodge:
> Life's not fair, get used to it.
The idea of setting tax rates according to "fairness", rather than practicality falls down on several points. First "fair", like beauty, is entirely in the eye of the beholder, normally it translates as "someone other than me should pay lots more tax", secondly it lends itself to ever more complicated tweaks and quirks being introduced into the tax system. The fairists then get very annoyed when much clever people than them then use these quirks entirely legally but entirely to their own advantage, to dramatically reduce the amount of tax they are subject to. The response of the fairists is then to introduce even more complicated rules to punish these "abuses", that they introduced in the first place, which meet with the same response, in a self-reinforcing cycle.
It never occurs to those who scream for fairness that the cure for the disease is not more of the same actions that caused it in the first place, and that simple tax systems are harder to avoid and manipulate than very elaborate ones introduced under the banner of being "fair". This is especially true where politicians are involved in using public money (normally non-existent money), to buy votes on a temporary basis that produces massive costs and is incredibly hard to remove or reform on a long term basis. Gordon Brown was of course notorious for this, with an endless lists of goodies to his favoured groups, baby bonds, EMA and of course the incessant, fantastically complex and cripplingly expensive list of bribes for parents. These bribes are invariably very easy to introduce (even if quite hard to introduce in a way that works remotely competently), but very hard to remove, as the bribed group screams as though the removal of an unjustified privilege is the equivalent of being packed into cattle trucks and sent to a labour camp. Witness the howls of indignation at child benefit being removed from those already earning £50k!!
Another point that never seems to be considered by those screaming "fair" is that apart from it being more sensible to have a cheap, simple tax system that is hard to avoid, if one were genuinely attempting to construct a tax system based on fairness, the amount that individuals COST the state would be a very important criteria, especially where that cost is due to their own foolish or reckless actions, rather than some unfortunate fate. In other words, fairness is as much about inputs as outputs.