By the time you read this, the utterly ghastly UK general election will be over. I’m assured by one historically minded friend that British politics was far worse in the eighteenth century, what with rotten boroughs, cronyism and corruption, but it often doesn’t seem like it. And if we have to compare the parlous state of contemporary politics to a rotten-borough-infested land 250 years ago in order to feel optimistic, God help us.

One striking thing about the election is how close together the parties are economically. One feels a certain dour amusement in listening to Labour politicians accuse Conservatives of preparing to slash and burn public spending, while Tories accuse the Labour government of preparing to sequester massive amounts of people’s incomes in tax. The actual difference between the two in terms of national income spent by the government is about three per cent of GDP. If the Tories are in power as you read this (what’s that pig doing up there!? Come down!) they will spend about 39% of GDP by 2011. Labour will spend about 42%. Big deal.

Admittedly, that three per cent amounts to about £35bn – equivalent to the total GDP of Romania – but in a one-trillion-quid economy, it’s a negligible difference. And you thought there were meant to be two political philosophies on offer. There are just two (three if we dignify the LibDems with the thought that they might ever wield power) different versions of the same tax-and-spend consensus. Viz: governments take a big percentage of national income by means of a progressive income tax regime.

But here is a new idea (well, not new, but suddenly popping up in intellectual debate for the first time in ages): a flat tax. In a recent edition of The Economist, the case for a flat tax was outlined in a couple of intriguing features. The idea is: no higher taxes for higher income earners, but the same tax for everyone – and, indeed, if you want to push it this far, for every company as well.

A flat tax has a number of advantages. First, it removes disincentives to work and enterprise. Second, it is drastically simpler and cheaper to enforce and administer. (It is estimated that between 10% and 20% of the US’s tax take goes on administration, enforcement and compliance.) The experience of a number of former Eastern Bloc countries which have implemented flat rates shows that revenue does not go down under flat rate systems either. Their economies appear to be booming too.

With a flat rate of tax, the wealthier are less inclined to evade tax; less likely to employ clever tax lawyers to exploit the hundreds of exemptions and loopholes that progressive regimes end up having. Significantly, the wealthy pay about the same overall amount under flat rates than under progressive systems.

But what about the notion that inequality of income is bad in itself? Well, we have inequality of income already under our progressive systems; the rich find ways round the tax code. There is likely to be no greater widening under a flat system if allowance thresholds are adjusted accordingly.

Issues of fairness would certainly be central to any debate about flat tax regimes. Issues of fairness surround the offshore world, too. And because of tax as well. In this issue, I look at whether the very idea of offshore is ethical or not. Page 15 is where the offshore conscience will be probed.