A dip in the middleSource: The Economist (adapted)Sep 8th 2005Income tax has been paid in Britain for more han two centuries.

First introduced by William Pitt the Younger to fi nance the war

against Napoleonic France, it is the Treasury´s biggest source of

revenue, raising 30% of tax receipts. It arouses strong political

emotions, regarded as fair by some because it makes the rich pay a

bigger share of their income than the poor, but unfair by others because

it penalizes enterprise and hard work.During the

past 30 years, income tax has been subject to sweeping changes, notably

the cut in the top rate from 98% to 40% under Margaret Thatcher between

1979 and 1988. Now another Conservative politician, George Osborne, is

fl oating a radical reform to match that earlier exploit. The shadow

chancellor announced on September 7th that he was setting up a commission to explore the possible introduction of a fl at income tax in Britain.Introducing a fl at income tax into Britain would involve two

main changes. At present, there are three marginal tax rates. These

three rates would be replaced by a single rate, which would be

considerably lower than the current top rate. At the same time there

would be an increase in the tax-free personal allowance, currently worth

4,895 pounds.The flat income tax