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The Forum > Article Comments > How to improve social wages with tax reform: Labor’s mission > Comments

How to improve social wages with tax reform: Labor’s mission : Comments

By Tristan Ewins, published 11/10/2011

Labor’s 2011 Platform must enable real tax reform for social wage expansion

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Your problem Tristan, is your perception of the world. Life is
not fair, it never will be. Unless you look like George Clooney,
you will never have his many advantages, unless you inherited
an amazingly good immune system, you'll suffer from all sorts
of diseases which plenty of others have no problem with.

I see wealth as a bit the same. Why on earth should I be against
billionaires, even if they inherited the money? They pay heaps
of taxes, create heaps of jobs etc. Just ask the workers at
Hermes and Rolex, if they are well paid or not.

In fact if there were far more billionaires and far less poor
people, I would be dramatically better off, for its the poor who
are bleeding the system for every dollar.

And there will always be poor people, as we see from what happens
to lottery winners. Some spend the lot in a short time and are
back on the poverty list after a while, others go on to pay lots
of taxes.

We don't need less rich people, we need more rich people, then
we'd all be better off.
Posted by Yabby, Thursday, 13 October 2011 3:17:01 PM
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Very strong welfare states work in Sweden, Norway, Finland, Denmark, Holland without 'demobilising the labour market'. And there are also stronger welfare states in Germany, France, Canada - and elsewhere - than we have in this country.

It works there; it can work here too.

I'm suggesting an increase of the social wage by 1.5% of GDP a term for several terms. Maybe levelling out after social expenditure has been increased overall by around 5% of GDP. We'd be around the same league as Canada when it came to taxes as a proportion of GDP. (about 38%) - as opposed to Sweden which has taxes at about 53% of GDP.

Further expansion might only be necessary because of the ageing population: or, for instance, if public pensions were prioritised again instead of superannuation. (maybe a good move)

Using 5% of GDP to improve Aged Care and Disability support; while making pensions fairer; and giving support to struggling and average Australians in the context of a rising cost of living - is not the end of the world.

Add to that also add an improvement in public education to create a real 'level playing field' for all young Australians, and perhaps universal public dental care. Restructuring tax to end effective corporate welfare would also be good.

It's the top 20% who have *40 times* the wealth of the bottom 20% that would stand to lose. And frankly that's fair enough.
Posted by Tristan Ewins, Thursday, 13 October 2011 3:31:35 PM
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Be careful of what you wish for, Tristan. For the law of unintended
consequences, is never far away.

The European social welfare experiment is still unfolding, with
the consequences there for all to see. Europe is not in the brilliant
financial health which many thought. Swedes might be hardworking
and educated, but now even Volvo and Saab have been sold to the
Chinese, with Mr Ikea living elsewhere, paying no tax at all
in Sweden.

Tax Australia's rich to unreasonable amounts and more of more
of Australia's mines, farms and businesses, will be owned by
Asians. We'll just be their workers and thats not going to be so
good for the Australian tax office of the future.

OTOH, convince some of the poor that if the 20 billion$ lost
on the pokies and other gambling, would be better invested in
BHP shares, then we'd own far more of our own country and everyone
would be better off.

Ignore those fundamentals at your peril.
Posted by Yabby, Thursday, 13 October 2011 4:42:08 PM
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Yabby;

If you're really worried about foreign ownership of mines, farms and other business then why not promote a bigger and more overt role for the Foreign Investment Review Board? Why not support more resource-rent taxation - but plough the takings into a Sovereign Wealth Fund - and use the proceeds for the kind of services I'm arguing for? And why not use such a fund to promote social/collective investment 'buying back the farm'? (including mining)

re: farmers - targeted concessions could be used to ensure farmers retain ownership and remain on the land... It is a reasonable exception to 'free trade' that as a nation we retain local ownership of core necessities. (farming, communications, transport infrastructure)

Pls keep in mind also I'm suggesting a tax take of around 38% of GDP as opposed to 53% in Sweden. And if the cost of low taxes is torment and suffering for our elderly then how 'sustainable' is that anyway?

As a nation we can 'hold on to the farm' without the price being enormous disparities in wealth - with some struggling to pay the bills, the eldelry and disabled facing untold suffering, and others engaging on outrageous conspicuous consumption.

We can do this via the 'democratic mixed economy' model; with collective capital formation, co-operative ownership, government business enterprises, socially-owned infrastructure... We can welcome foreign investment for the most part; but prioritise local, social and democratic ownership of the most sensitive areas of the economy; as well as 'natural monopolies'.

And we can avoid the kind of problems seen in Europe so long as we do not let debt grow to the level where it cannot be serviced. To maintain public services and contain public debt actually suggests an increase in progressive tax is a good idea.
Posted by Tristan Ewins, Thursday, 13 October 2011 5:29:31 PM
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*Why not support more resource-rent taxation*

Because if you push it too high, Tristan, its not worth taking the
risk of mining. Last time I checked, a company like BHP were
going to pay around 45% of profits in tax. That is a huge amount
of money each year, of benefit to all Australians. A good chunk
of the rest, they invest in new projects. The 27 billion$ which
they plan to invest to develop Olympic dam, has to come from
somewhere. What they invest in that project now, will benefit
the next generations of Australians, as its going to take about
5 years or so just to remove the overburden.

We already have a sovereign wealth fund, investing in all sorts
of corporations, established by a clever fellow called Costello.
Swan is free to contribute to it, if he ever becomes as smart
as Costello, but I doubt he will.

We also have 40% of Australians owning shares directly and most
of the rest indirectly through their super fund. The more they
invest, the more profits and tax stay in Australia, for eveyones
benefit.

You will always have some people struggling, because you cannot
legislate for people to make wise choices about their lives.
I know people earning 6 figures who have nothing because they
spend more then they earn. Yet by your statistics they would
be poor. Yet I know plenty of pensioners doing ok. They know
how to budget, they grow a few vegies etc, they don't play the
pokies, for luckily in WA we don't have them.

What say pensioners sell their house to fund their retirement,
rather then want to leave the kids rich?
Posted by Yabby, Thursday, 13 October 2011 6:54:18 PM
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Tristan Ewins:"What you say about women in the labour market shows that ideally we should have free education;"

I agree with you on that, although I suspect we would differ on what sort of education should be free.

Tristan Ewins:"that partners who remain at home need support"

We already spend more than 35% of our taxation revenue on redistribution and welfare and another 5-10% on administering those things. How much do you think we can afford to outlay on "compensating" people for their free choices? What's going to happen to the next generation when the mining money runs out and they've become welfare-dependent?

Even people who make a very good living indeed are eligible for thousands and thousands of dollars to compensate them for the fact that they will want to someday have children. Note, they'll WANT to, not they'll HAVE to for reasons they can't control. I'd quite like to travel a lot more, should I be eligible for compensation for lost career opportunities or income? What other personal decisions should be compensated, do you think? Should the individual have any responsibility for self-support at all?

Moreover, the handout system hasn't worked: men are choosing to leave relationships rather than have children. They have adjusted to the new paradigm by simply refusing cooperation, which is a common response to oppression.

Tristan ewins:"superannuation discriminates against women"

What a lot of tosh. Women make 85% of the spending decisions in households, according to Woolworths' new Masters hardware chain, which is spending a great deal to appeal to women, as does Bunnings and every other retailer. Women also live considerably longer and they usually inherit their husband's wealth.

Women don't have as much super in their own names because they don't work as much as men. They take more time off and they require more health care, even when they don't have children. They choose convenience and security over challenge and risk and they are paid accordingly.

All the wishful thinking and spending of other people's money in the world won't change biology
Posted by Antiseptic, Friday, 14 October 2011 5:28:54 AM
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