The principle of the Laffer Curve is so easy to understand that even David Heatherington should have been able to grasp it.

If governments levy no taxes, they get no income. If governments impose 100% tax, they get no income either because nobody would be stupid enough to work. Between these two extremes is a curve, and there must be an optimum tax rate where the curve peaks and where increasing taxes reduces tax return. Where that spot is may be hard to pick. But common sense says that it must exist.

I think that David is another Socialist who thinks that money grows on trees and all government need to do to finance David's pet social theories is to keep on increasing taxes on "the rich" (read, ordinary taxpayers) forever. It is the kind of thinking which caused every productive member of Detroit society to abandon their houses and walk away from Detroit.

Could somebody please send David a copy of 'The Golden Goose" as one vital part of his education was missed in kindergarten.

Reality check to David. There are very productive members of any society, productive members of society, non productive members, and counter productive members. Any policy which increases the numbers of the first two catagories is good for society. Any policy which drives them away and simply increases the numbers of welfare dependent and crime prone members of society, is bad for that society.

Thinking that all you need to do is to tax the productive until they either flee or hunker down, while increasing the non productive to gain political power by promising them that the government will give them money forever, is what got Greece into it's sorry state. The welfare state can only work where the numbers of dependent do not increase over the capacity of the productive to pay for them. That is why immigration demographics is very important. Importing people from strife prone ethnicities who will become social, crime, and terrorism problems is a recipe for bankruptcy.

Brains are like hearts, David. They go to where they are appreciated.

Lego, did you know that the richer a person is, the less tax they pay?

The reason is that they can afford to employ experts in tax avoidance. Average wage or salary earners can't.

It's a scheme that has advantaged the rich immensely and helps to explain why 1% of folk have most of the wealth.

Nice work if you can get it but it's not fair!

Then the greedy don't care about things like fairness, do they?

I'd always assumed Laffer to be an eminent economist and his curve to be something he'd spent months, if not years, calculating. But then I saw him on Lateline and realised... the man's an idiot! His curve was nothing more than an attempt to explain his concept to an American president. He doesn't have a clue where the peak is but he supports rightwing economic policies despite strong evidence of their ineffectiveness.

____________________________________________________________________________________

LEGO, I think you misunderstand David's criticism. The concept of the Laffer Curve is simple enough, but there's always an opportunity cost. In terms of your own reality check, spending money on improving the productivity of the unproductive and slightly productive and making the counterproductive productive is likely to be a more effective way to boost revenue than cutting the top tax rate.

BTW, though it's of little relevance (because it doesn't affect where the peak is and nowhere has that much tax anyway, your claim that "If governments impose 100% tax, they get no income either because nobody would be stupid enough to work" is incorrect as financial gain isn't the only thing that motivates people to work.

And as for immigration demographics, assumptions about people's behaviour based on their ethnicity are often why they became refugees in the first place! Spending billions locking them up on remote islands is a waste of money, as we could instead let them come to Australia to work. The only condition should be a commitment to oppose all terrorists.

Yes LEGO, you seem to grasp reality.

Some very simple maths for those who have a vested interest in the current status quo?

If all the tax we pay, is just 4% of the GNP, and if the GNP is the sum total of our combined expenditure?

Then an entirely unavoidable 5% tax on that expenditure will raise more revenue? 75-100 billion more per?

And this very simplicity would completely negate the need for any tax compliance/reconciliation costs? Returning 7% averaged to the new net bottom line!

It's really very simple maths! 5% taken, 7% returned to the gross/new net; which is 2% better off and after the total tax take/common commitment has been automatically collected;fee free by the banking fraternity!

In return for a banking licence, and transferred overnight electronically to treasury, where no reconciliation issues would ensue, and therefore immediately available to consolidated revenue!

Which would also mitigate against needing to borrow against expected income, to run this or that department!

And while we are examining long overdue real reform, why don't we just decide, once and for all, who funds what?

I mean a direct funding model, plus total autonomy for both health and education, would completely obviate the need to also collect a GST!

And given the same basket of money is not rerouted through this or that state treasury, release as much as an additional 30% for pro rata coal face funding/allow rationalization to finally replace the dogs breakfast of funding control and huge over-government!

Look, we have with just one exception, more politicians and or bureaucrats pro rata, than any other nation on earth.

Elsewhere the essential work done by extremely expensive state Parliaments; can be done by a single state Governor; elected in a winner takes all election; and accompanied around a dozen personally hand picked competent administrators!

Meaning, he/she is only constrained in doing what needs to be done by the size of the budget, rather than an obfuscating, obtuse, obdurate, obstructionist opposition, forever with its eye on the prize, and to hell with the state or the country!
Rhrosty.

To Aiden.

The idea that social workers just need money to make non productive and counter productive people into productive people is ridiculous. It assumes that the parasitic class have equal intelligences to productive people, and that they all just want an opportunity to show their stuff to make them valued members of society. How many times does this utopian Socialist vision need to be proven wrong before people like yourself figure out that it is wrong?

For example.

The Rudd Labor government instituted the Remote Jobs and Communities Program to alleviate the high levels of chronic unemployment by remote area aborigines. It was not that there was no work to do in these communities, but all the work was being done by fly in/fly out white workers who did whatever was necessary, from building new homes, repairing old homes, and maintaining power, roads, electricity and water services.

The $1.5 billion dollar program has been an abject failure. Only 30% of the 37,000 aboriginal people on unemployment even bothered to apply for the program, which involved contracted "Providers" in each of 60 declared "remote" regions, who's job was to work with individuals, communities, and local employers to find jobs for aborigines.

The costings reveal that an incredible $430,000 thousand dollars was spent by the program to place each aboriginal worker in any job which lasted more than six months. And only 30% of those jobs involved "structured work with mutual obligations." Exactly what this bureaucratic diseased English quote means is anybodies guess. But I opine that it means that 70% of the jobs bought for $430,000 dollars by the Aussie taxpayer involved nothing more than the candidate picking up litter from around their community, if he or she felt like it.

60% of the Northern Territory education budget goes to indigenous schools where NAPLAN tests have a 90% failure rate. It is estimated that 75,000 "remote area" aborigines are receiving $100,000 dollar per person in direct government assistance or in assistance to keep aboriginal settlements economically solvent.

No amount of extra revenue through increased taxes will change the inconvenient truth.

LEGO, you're the only one so far who has mentioned social workers, and IMO they're only a small part of the solution. It makes no assumptions at all about equal intelligence, but avoids the false assumption that those with low intelligence are a "parasitic class".

Of course opportunity is not itself a panacea. But lack of opportunity is the biggest obstacle that needs to be addressed, and addressing it requires a sustained commitment.

I notice your badly researched criticism of the RJCP has said nothing about the most important aspect: how successful has it been in enabling the locals to replace FIFO workers?

The whole point of NAPLAN is to divert funding to where it's most needed. And keeping remote communities going (regardless of whether the inhabitants are aboriginal) is expensive, but nation building is a long term process. I favour speeding it up rather than giving up.