This fiction is proposed by a complex rationalist, to effectively transfer the tax from the better off, to the worst off.
It will draw down discretionary spending and further compound housing affordability.
During the financial year ending July 30 2003, according to Ross Gittens, the total tax take from all sources had been 235 billions for the year just ended.
The banking fraternity produced/were responsible for an article appearing in the middle pages of the Q'ld Sunday Mail; during either August or September 2003, which reported, that according to irrefutable bank records, total unavoidable recurrants for all Australians, had totalled 6,785 billions, (rounded) for the year just ended.
4.8% of 6,785 billions collected as an unavoidable expenditure tax, is 330 billions; or, 95 billions more than the total tax take, reported for the period under examination.
Why is it that complex rationalists always seem to want to replace the most complex tax system on earth? With something very nearly as complex, which simply does not address the quite massive avoidance by our largest corporations?
One of the most obnoxious avoidance schemes, is the practice of "creating" an offshore subsidiary in a tax haven, and then outsourcing some element of admin to them, at considerable/exorbitant cost to the parent company, who can then write off this cost, to avoid tax/keep most of the money?
A simple unavoidable expenditure tax would make this practise produce more rather than less tax.
A simple stand alone expenditure tax set at just above or just below 5% would raise more tax than the current complex arrangements: Continued---

A simple unavoidable expenditure tax set at around 5%, would as outlined, collect more tax and end the quite massive avoidance; as demonstrated, that sees as much as 100 billion avoided annually!?
A simple expenditure tax, collected in a fee free paradigm, via the banking fraternity; and, set at around 5%, would end the need for compliance or often onerous compliance/reconciliation costs, adding in the first instance, around 7%, (averaged) to the Australian based bottom line?
Very marginal regional variations in the tax rate, would alone be all that would be required to address either inflation or stagnation.
This new mechanism, would entirely replace interest rate adjustments as the inflation/stagnation control mechanism! Thereby allowing interest rates to progressively fall to all time historical low; or, until they turbo charged, the slowest parts of our multi-speed economy!
A simple expenditure tax as outlined, would allow all other taxes, PAYE, PAYG, fuel excise etc/etc, to be jettisoned; [as advocated by the Author,] boosting the economy; and, adding as much as 30% to Australian bottom lines; and, 25% to household disposals! Paid for in full, by actually effectively ending, all the current forms of often quite massive avoidance.
A simple stand alone expenditure tax as proposed, could also encapsulate a carbon component, 0.3-5%? Which like the tax itself, would rise with economic growth, which by the way, would no longer be dependant on population growth, or growth in the taxpayer demographic!
A 25% increase in household disposals, would allow the immediate imposition of a non-contributory 15% super, leaving a still significant 10% in hand, to boost savings and or discretionary spending, and put downward pressure, on the dog chasing its tail, wages/price rise spiral!
Rhrosty.

Why not just abolish all taxes and have any deficiency in government finances made up from the sale of politicians' assets?

Footnote: A simple unavoidable expenditure tax; like that outlined, would also prevent Multinationals and others, from using offshore/onshore investments, to write off actual income and thereby avoid tax.
Money which should remain inside and circulate/recirculate through, in and around our national economy, creating each time it changes hands/entities, more and more local economic growth and prosperity!
The averaged 7% savings; and the quite massive reduction in bookwork or record keeping; and or, its financial/human relations costs/social dislocation etc, produced by a 5% single stand alone impost, should effectively silence the moans; or any possible reason, to actually avoid a fair share of a common burden!
Rhrosty.

Rhrosty:

...You make much more sense when discussing taxation issues, (an innovating point on which I agree), than you do when discussing the marriage of homosexuals to each other. Your views are confusingly incongruous!

So, your "simple, unavoidable expenditures tax" will magically put an end to avoiders, Rhosty? Just like the GST was going to do, eh? Your "unavoidable" tax is going to use the "banking fraternity", is it? But wouldn't that generate the greatest cash economy in the world? You'd legislate against cash, Rhosty? Right.

Seems to me the Putland proposals actually get to grips with loopholes through which trucks are currently driven.

There is no magic in unavoidable. Suggest you both read and understand the irrefutable maths I've provided.
I was part of the 87% who disagreed with the GST, which rather than reform, was simply Granny killing revenue surety, merely masquerading as reform.
It simply transferred tax responsibly from those, who could afford it, onto the backs of those who couldn't; and, added yet another level of complexity!
[At some point complexity becomes fraud. Quote unquote.]
And entirely off topic!
Nor do I see or agree with, that there's any incongruity whatsoever, in advocating equal rights for those, who dare to be born different. Every Human Being extant on the planet, has an inherent right to pursue their dreams, love, genuine happiness and physical affection.
I know of no heterosexual, who has chosen to be straight or "normal"!
Nor do I know of any "normal" heterosexual, who could chose to be otherwise, or engage in homosexual practise, without a loaded gun held to the head. Even then, the skin would fairly crawl!
That being so, it's hard to reconcile a view amongst a diminishing minority, that there is any element whatsoever; of choice, in homosexuality.
In fact, if one knew of all that homosexuals have to go through or are subjected to, one would simply understand; that there's basically no element of choice on homosexuality, just naturally occurring aberrations.
We all of us start our existence in the womb, as female foetuses.
Hormones produced; or not, by the mother, determine whether we are born male or female.
Sometimes this process is incomplete? And or, produces the natural aberrations, we refer to as bisexual, gay or lesbian!
[Genetics seem to play no part, nor does the environment or family composition?]
I simply chose not to blame the victim of this process, whenever it's incomplete or overdone?
Nor do I believe anyone has an inherent or God given right, to discriminate, or deny other's the basic human rights, we simply take for granted!
My usual logic isn't limited to, essential overdue real tax reform or economic practise!
Rhrosty.

Rhrosty mentions two kinds of tax avoidance. One uses inflated "transfer pricing" of purchases from related entities in foreign tax havens. The other uses losses on foreign investments. A border-adjusted VAT has neither of these loopholes because the "border-adjustment" disallows input credits on purchases from overseas.

The flip-side of "border-adjustment" is zero-rating of exports. Hence, if a country has a VAT but no corporate income tax, it provides a tax haven for exporters without compromising the revenue base: by design, a VAT doesn't tax export income except to the extent that people spend it on consumption.

Does my proposal also address domestic tax evasion? Yes -- NOT because a VAT is more immune to fraud than the alternatives, but because, if you replace several taxes by one tax, the ATO's compliance resources are not so thinly spread.

Rhrosty notes that in 2002-3, Australia's "total unavoidable recurrants" were $6.785 trillion. As this figure is more than 8 times GDP for that year, I infer that inputs are not deducted from outputs, so "recurrants" [sic] mean turnover (or perhaps turnover processed through banks). Hence what Rhrosty calls an "expenditure tax" is a turnover tax (or perhaps a debit tax). A turnover/debit tax is a reverse tariff: it hits domestic transactions involved in producing exports but not foreign transactions involved in producing imports.

In conventional terminology, an "expenditure tax" is a consumption tax implemented through the income-tax machinery, using the fact that consumption equals income minus saving plus dis-saving. The claimed advantage over an indirect consumption tax (VAT or retail tax) is that consumption, if assessed through the income-tax machinery, can be taxed at progressive rates. My proposal to let employers keep PAYG income tax while remitting a VAT is an alternative method of switching to a consumption base while preserving the progressivity of the existing income tax. So it does not, as Rhrosty puts it, shift the tax burden "from the better off, to the worst off".

Other components of the proposed "budget" remove taxes that discourage building. This can only improve affordability of housing.

Well Rhrosty,

…The fan-base for your stimulating posts thins by one on “this” off-topic subject…maybe on another day and on another thread, the fog which shrouds your thinking will lift, under an uncomfortable influence of the hot westerly wind of reason!

I think one of the issues here is the hierarchy implied. Site value rental is best applied at the local government level - arguably the most under-resourced but most accountable level of government. If SVR was collected at the local government level as the primary / sole source of funds for government at all levels I think citizens would feel in control of the application of the funds they contribute to receive government services. In order to receive services that were difficult to coordinate at a local level it would be necessary for local governments to contribute to the next level of governance on a per capita basis. The next level could be national, as in the U.K., or state as in Australia and the U.S.

There are obvious flaws, particularly in the U.S., in devolving decision-making to the local level, particularly in the supply of education services. U.S. public schools are a tragedy due to the lack of national coordination of curriculum. However, an inversion of the power structure would make distortion of decision making by oligarchs considerably more difficult.

Representative local government funded by SVR contributing to regional / state / national levels of administration would put most decision making in the hands of my local government representative (acting in collaboration with / opposition to other local representatives). Local representatives would nominate / elect representatives to the next level of governance, but that level would be directly responsible to the nominating local governments and therefore likely to be more directly accountable for their actions than occurs now, where state and federal politicians are directly manipulated by unaccountable oligarchs whose agendas are usually inimical to the interests of the local electors.

I recognise that the relative benefits of local versus national power have been debated as long as there has been representative government, but the unprecedented universal failings of national governments in the OECD version of the world in the last 20 years has made the issue a matter of personal and biospheric survival instead of an interesting topic for discussion at the pub...