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The Forum > Article Comments > Is the answer hypothecated? > Comments

Is the answer hypothecated? : Comments

By Graham Young, published 18/2/2013

The government has limited options for funding their promises, but they do exist, at least from a PR point of view.

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Well, the answer is, not more tax, just getting everyone to pay their fair share.
Goggle,i.e., paid just two thirds of one percent, of the billions they earned here!?
Reportedly, some 40% of our multinational guests, pay no company tax to anyone?
And others are using tax havens to protect money earned elsewhere!
Anything untried remains hypothetical Graham.
Before the Wright brothers, Wilbur and Orville, flying was hypothetical; and putting a man on the moon, science fiction or fantasy!
The current tax act, with its 40,000 pages of convoluted mind-numbing complexity, incorporates a tax loophole in virtually every page!
One very wise US republican Senator, Guest on an early Q+A, said, "at some point complexity always becomes fraud".
Our tax act is an instrument that no longer serves us, but rather the creative accountants; and or, the fraudsters/avoiders.
We need just one leader, with a clear mandate and the courage to throw it out, and replace all that, with a single stand alone expenditure tax.
Set at just 4.8%! A single stand alone expenditure tax will raise around 25% more net revenue, than the current raft of complexity!
Imposed as an unavoidable stand alone tax, it would end the need for around 20,000 public servants; and tax compliance and its costs, which currently rip around 7% from the averaged bottom line!
And the repeal of virtually all other tax measures, inclusive of the GST and fuel excise, would add as much as a further 30% to that same bottom line, and 25% to averaged household disposables; making a 15% non-contributory super, immediately available and affordable. Courtesy of mostly, foreign tax avoiders!
Moreover, the tax rate can be microscopically adjusted,region by region to control inflation or stagnation, meaning interest rates can be progressively lowered until the AUD finds it true value. And both manufacture and exports increase and become competitive once again!
Rhrosty.
Posted by Rhrosty, Monday, 18 February 2013 10:04:22 AM
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Many years ago, when replying to a reporter's question, why had he settled on the GST as reform?
John Howard replied, "well it was either that or a transaction tax, and a transaction tax was thought to be regressive".
With the benefit of 20/20 hindsight, he was so wrong!
In fact, a transactions tax would have precluded the possibility of much of the avoidance, that is currently costing our economy, a hundred billions plus PA.
Before it was imposed, the ubiquitous GST, was just another untried hypothetical.
We should throw it out and replace it, with a direct full Federal funding model, of both public health and public education, both of which ought to be virtually autonomous and controlled by regional boards.
The money saved could be spent at the coal face, on improved student/patient outcomes.
There was a time when even the Westminster system of government was just hypothetical!
Since its inception, the simple tax system, or land tax that used to support government spending, has had layers of complexity added and added, ad nuseum.
And it no longer serves or indeed, keeps up with our expanding infrastructure needs, some of which ought to be myriad northern dams.
After all, water is the basis of all wealth and the Murray Darling, in total, provides just 6% of our irrigation water.
With a simple single expenditure tax imposed, we avoid the destiny of demography.
Growing the tax base, is then as simple as growing the economy, which will be best served, by growing our capacity to produce food for a rapidly expanding, Asian middle class!
Rhrosty.
Posted by Rhrosty, Monday, 18 February 2013 10:41:34 AM
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Are we talking hypothecated or hypothetical here ?
Posted by snake, Monday, 18 February 2013 2:47:53 PM
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'Outside of Liberal voters there is also little support for increasing the GST ...'

Graham this interested me.

Were your questions asking about an increase in GST only. Or were there questions about extending the scope of the GST to include everything?

It does not surprise me to see Liberal voters supporting increasing the GST. I tend to think they spend less proportionally on non necesities like food etc. and more on the luxuries. They could probably afford the increase.
Posted by imajulianutter, Monday, 18 February 2013 5:48:48 PM
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There is no need for more taxes,they just make us all poorer.With the sale of 4 Govt State banks and the Commonwealth since 1980,even our inflationary money gets created as debt by private banks with the click of a computer mouse.

Consider this,we have an average inflation rate of 3% which means our $1.2 billion economy loses value of $36 billion pa.Next the banking system creates the principal as debt to be loaned into our economy at interest.We have to repay via our taxes and mortgages money that should be ours.We lose out three times just on inflationary money.This why our taxes are so high.

Our RBA should at least be creating this inflationary money and loaning it to our banks.Our banks won't lose out since money money will stay here. Our banks will not have to borrow OS from banks who just create it with a computer mouse anyway.

There is no excuse for a shortage of money in any economy since money is the medium of exchange which costs nothing to produce.
Posted by Arjay, Monday, 18 February 2013 5:54:23 PM
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Snake. Given I'm not in favour of a property, death or retrospective wealth tax, I guess my answer is, hypothetical.
Let me anticipate your next question.
Can such a small amount collected as an expenditure tax, collect enough revenue?
Well yes. According to Ross Gittens, former finance Editor, of the Sydney morning Herald. Speaking during August, 2003, "the total tax take from all sources, for the year ending June 30, 2003, was 235 billions".
This was par for the course, before the rivers of gold started flowing from mining boom, mark one.
Around the same time, in a small article appearing in the middle pages of the Queensland Sunday mail; attributed to the banking fraternity, claimed the total unavoidable recurrents for the year just ended, as of June 30, 2003, had been some 6875 billions (rounded).
Now 4.8% of 6875 is 330, or 95 billions more inland revenue, than the reported total tax take, for the period under examination.
Further, every carbon footprint is almost exactly the same as any individual or corporate spending pattern.
So, imposing a stand alone expenditure tax will also put a price on carbon!
And given an unavoidable expenditure tax is imposed, it also increases with super profits; and or, mining venture expenditure or outlays, that previously could have been used to unfairly avoid a fair share of a common tax burden.
Given an expenditure tax would stand alone, business would avoid fuel excise, payroll tax, PAYE and PAYG, and the ubiquitous and cascading GST.
Hardly a bad trade!
Moreover, given the fact there would be no need for reconciliation outcomes, the revenue would be immediately available to consolidated revenue; meaning, govt depts need not borrow against held revenue, simply to fund essential recurrent spending!
Cheers, Rhrosty.
Posted by Rhrosty, Monday, 18 February 2013 6:09:30 PM
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