Aidan: Imagine you're a company.

Your current tax liability is 30%!

You pay around 7% of your bottom line to get it down to 13%; a 10% saving to the company, if you factor in the 7% tax compliance costs that made that savings happen. With me so far?

And you could be tempted to move to Ireland or maybe Singapore, where the tax rate may be as low as 15%; or china, where labor costs might make the combined outgoings a little cheaper, given ours at around 16% averaged, makes us a little dearer.

Now I can't change your wages bill much, except to make it significantly larger, without impacting on AUSTRALIAN company outgoings.

And just by unharnessing most of the tax liabilities from it bar one!

With me thus far?

Now if some cleverly lead government with the necessary testicular resolve to make real reform possible; approached you and said, we are not only going to reduce your total tax impost just to a very simple 5% expenditure tax, but into the bargain, allow you to return your tax compliance money, 7% to the bottom line, as a 7% increase to the net, (5% taken, 7% returned) would you say.

No thanks, that would force my cost up and force me to offshore!

Which effectively is most of your (as above, frivolous and vexatious) argument about overdue simplicity/real reform!

I wonder, if your brain were a lamp, would you still be able to find your way home in the dark?
Rhrosty

Actually, all land (including resources) is the gift of Creation or G-d (Lev.25:23) and was not made by humanity. Any privatizing of same is theft. Land price itself is the ubiquitous underlying crime. Our entire economy, including mortgage security for loans, is based on theft. No good can come of this. The rental-value of land privately occupied (ignoring improvements), as determined by independent valuers not by politicians, must be collected as the sole source of public revenue. All taxes are artificial & unwise imposts which warp their target (skill, effort, employment, transactions etc.) and should be ditched next 30 June. Collecting site revenue would destroy land price and enable sites to transfer for value of improvements only. Let the losses lie where they fall upon the thieves and their parasites involved. Economic health, government restraint, proper bargaining power for labour, and inter-generational equity would be restored immediately.

I completely agree with this article.

If you tax labour, at some rate of taxation people become more reluctant to work. If you tax capital, at some point it buggers off overseas. But if you tax the use of natural resources, such as land and minerals, you don't end up with fewer natural resources. You end up with more prudent use of those natural resources.

None of us made the land we use. We all improve our homes and hope for a capital gain, but most of that gain comes from a rise in the unimproved land value, caused by population growth and the actions of society (e.g., put good facilities near my home, and its value will rise without any effort on my part).

Any increase in the unimproved value of land has not been earned, and should be taxed.

Contrary to the self-interested comments of some critics above, there is no problem valuing unimproved land values. We've been doing it in NSW since 1906, and there is a well-organised system to challenge any valuation errors.

Rhosty, do you know the difference between refutation and contradiction? Because you haven't refuted anything I've said, you've merely contradicted it. Refutation requires sources or logical argument. Often both. For example:

Income tax revenue is $175.4 billion according to http://www.budget.gov.au/2013-14/content/overview/html/overview_44.htm
Total ATO budget in the same financial year was $3.598 billion according to Wikipedia's ATO page (they got that figure from an ATO document, but the link to it no longer works).

That's not 40% but 2.05%.

As for your other claims:

It is very very far from clear whether there is a structural deficit. Clearly there is a deficit but there's no real evidence it isn't all cyclical.

I'm not arguing for more complexity. As the land tax would replace other taxes, there would eventually be far less complexity.

Australia's foreign debt is nowhere near the size of our economy. But I do think we should make it easier for banks to source their funds domestically.

More than a million daily does need to be borrowed, but not necessarily from foreigners.

Maybe bragging, maybe just feeling smug; the effect is the same – it's not something we should subsidise. Or maybe your concerns are unfounded and it wouldn't bother him anyway. Either way, the economy does not benefit from the situation where the best investment is something that doesn't actually improve productivity.

YOU do the simple sums! You don't seem to realise that you can't tax sectors of the economy for more money than they make! In the financial sector, many have profit margins of far less than 5%. They would go bust or go overseas.

And what matters more to a company than how much it is taxed is how easy it is to make money in the first place. Good infrastructure and a highly skilled workforce matter much more than the tax rate.

And in answer to your final question, no I wouldn't be able to find my way home in the dark without a brain, and a lamp is useless in a position where it can't illuminate anything.

Valid commentary, Philip and Aidan.

'Excessive' valuation problems in those parts of the country where actual sales of undeveloped land are very infrequent, are possibly inevitable. For example in the small town I live in, the sale of just one empty block, at well above average asking prices of all the other ,unsold blocks, in my town, resulted in a near doubling of official land values for the whole town.
(The block was purchased solely so as to block a development that threatened the amenity and peace of mind of the eventual buyers neighboring land, so they were willing to pay more than the land was really worth).

And it does seem unfair that people who bought into an area because it was 'all they could afford, at the time', should later in life- after say 'gentrification', should be hit with a large tax on the land they live on.