Merv,

An excerpt on Holt:

"Holt’s first budget, brought down on 11 August 1959, was one to please both the voters and the Treasury. It provided a cut in income tax and an increase in pensions"

Dream on.

As the tax attributed to Harold was about 1947, and the tax in 1950 was about 75% but reduced to 66.6% by 1953, and remained at that rate for the next twenty years. I don't think too many people thought it was a bad tax. The only time since then, where any time was spent on a particular tax, is in the last 20 years with the same tax rate lasting about five or six year runs generally involving a recession or two. The workers in those years between 1950 and 1970, were very happy, as the cost of goods and services dropped down. If you want confirmation about that, ask someone who lived then, don't rely on articles on the computer, I have read some of them also.

Merv,

In 1947 there was a Labor government.

Holt was Labor minister in the Menzies Government and did not become treasurer 'till 1958, and his first act was to reduce income tax.

Please read up on your facts before posting this fantasy.

Considering that all other countries had similar taxation rates post the war, and the standard of living was far lower than today. I would suggest that your memory is more than a little foggy.

Great article by Saul Eslake.

How convenient of Sir Vivor to forget the other taxation those in the top bracket pay. The suggestion that somebody on over $100,000 can afford $500 -$900 is a bit mischievous absent the fact that they pay between 30% and 45% of their taxable income in income tax already. they also pay more GST as consumption levels increase with income.

Even so - this misses the point. the tax is only the result of the Government's mismanagement of the $350 billion in revenue it already receives. Nobody questions the need to respond to disaster. Many of us simply resent the Government asking taxpayers to cough up extra to cover its waste.

BTW, when the top tax rate was at 75% it was also levied on relatively few people at the very highest incomes (and only on a smaller proportion of their income) and the overall government spend was much lower, pensions were lower (and based on mandatory contributions), many houses were unsewered, a lot of roads were unsealed and average incomes and purchasing power was lower for the lowest income earners. The invalid pension and unemployment benefits were harder to get and the pension taper had a cut off of 100% when income over the threshold was earned (as opposed to a 40% taper now). There was no Medicare. Is the suggestion that we should return to the same level of expenditure as the 1950s? Because that is the only way that tax system could actually work. Now more people pay a proportion of their income and the top rate cuts in at much lower income levels.

Gobsmacked, you point out that the higher income brackets pay more in GST because they spend more money, and also, they are income-taxed at higher rates. No doubt. Thus are they left with what meagre leavings their tax accountants can wrest from a socialistic system: deductions for negative gearing, deductions for this and that, donations to charities, etc etc - a penny deducted is a penny earned. I'm certainly well-off enough to guess at what an onerous burden it must be, to earn over $150,000 per year. Even I, on a much more modest income, have a tax accountant

You also parrot the Leader of the Opposition's idea of the day, on this evening's news, that the government mismanages its finances. That has been Mr Abbott's big idea of the day for a fair few days now, months even, and it's time he tries thinking outside the box during his morning shower. I expected better of a Rhodes Scholar.

My first post explored the idea of discretionary income: a clear enough idea for individuals, but not (to my knowledge) well defined when applied to corporate bodies. That post made the point, that if dividends are considered as a discretionary use of a listed company's profits, then perhaps there are other choices that could be made with the money available to put marmalade and the WSJ on the breakfast table of the archtypal holder of dividend-producing shares.

Gobsmacked, do you know the typical range of choices that are made, about how major corporations allocate their profits? Can you summarise those choices into, say, three to six categories, then provide an idea of where you thinks the money is best spent? Better yet, provide links to validate yourcategories, and further information about the dollar amounts typical of each, for an individual listed company or a group of similar industries.

As one who is fairly ignorant of economics, I would be delighted to have my questions answered in plain language. Shadow Minister has yet to answer the last question I put to him. Perhaps you can answer me in the meantime.

In the early 60s an uncle of mine was complaining that he had paid 9,000 pounds tax, which left him with less than 6,000 net income.

He looked at me as if I were mad when I said I wished I had paid 9,000 tax. With his 5,000+ net I could have paid cash for my 4,800 pound home, which I would be paying off for another 19 years.

I pointed out that I had only paid about 120 pounds tax, which left me with about 1100 net. I was not unhappy with this. I could comfortably pay my home loan, run the car, pay my hospital & medical insurance, keep my wife, & new baby at home, & even afford to race a 16Ft skiff at the sailing club on Saturdays.

I liked my uncle, he had started with a horse & cart, & worked very hard to be where he had a live in maid, a chauffeur/handyman & could buy a string of houses.

I could not imagine even wanting a live in maid, & he could not imagine wasting Saturday, & money going sailing, but it did not stop us being friends.

He was about as rich as most very wealthy today, & I was much better off than my younger kids are today. They are keeping so many useless public employees providing all the "services" I never needed, or wanted, there is no way any of them could live on one wage.