The author assumes that one should get benefits from the government in proportion to what one gives to the government. There is no need to make that assumption. Disparities of wealth exist. I see nothing wrong in reducing these disparities by redistributing the wealth. Sometimes redistributing the wealth can contribute to future prosperity. It would cost large sums of money to bring the public schools up to standard. Teacher's pay would have to be incresed enough so talented people would be attracted into the profession. A generation of well-educated public school students would increase Austrlia's prosperity in the future. In my opinion the welfare state can bring benefits to us all. It has gone beyond the 'safety net' concept, and that is great.

77% of the tax in return for 22% of the benefit?
We could always follow Mitt Romney's example, and have the wealthiest pay only half the tax, as a percentage of income, of say nurses, police, soldiers, ambos and fire-fighters?
Even then, a man "earning" around 15 million per, would still be paying more tax, if volume were the only measuring stick; and vastly more, than he would need to pay, in return for publicly funded benefits?
Always providing you exclude the carbon footprint, he and his quite numerous business interests create!
Which would then indicate, in comparison to any of the aforementioned, he was paying far too little tax, in percentage terms.
Your spending power is your after tax income!
Having said that let me say this. If only I could pay more tax, a million or more a year would do!
All levity aside, if the only tax any of us paid was an expenditure tax, collected via the banking fraternity, and set at a virtually painless 4.8%.
Then none of us, would pay more comparative tax than anyone else.
Moreover, compliance costs would no longer be needed or factored in. Meaning an immediate boost to the bottom line of around 7%.
Not a bad trade for a 4.8% total tax impost?
And when you do the maths as I already have, [check the archives,] then there is an increase in inland revenue of around 25% courtesy of all former tax evaders being finally caught in the "net"!
Furthermore, the accompanying repeal of all other tax, including the ubiquitous GST, further improves all Australian based bottom lines by 30%, and averaged household disposables by around 25%!
[If the Fed Govt then directly funds all public health and education? The GST would not be missed!]
Meaning, a non-contributory super of around 15% becomes immediately viable!
Moreover, the tax rate can be very marginally adjusted, region by region to alone and much more immediately, counter all inflation or stagnation.
Meaning, interest rates can be progressively lowered and then left, at historical lows, to turbo charge, all non performing economies!
Rhrosty.

It's not just the tax system that needs reform or a very thorough make over, but our gridlocked parliaments as well!
I for one would like to jettison state parliaments and save the 70 Billions or so a year, that they cost us!
And a good deal more if you factor in the de-harmonisation created by quarrelsome, nit picking pollies!
I would also like to "electrify" all of our parliaments! With a "covered" key operated voting system, turned to the right for yes and the left for no, then electronically counted!
The key could be the members right forefinger, normal parameters blood temp and attendant finger print, personally verified with a retina scan, and voice recognition; removing most of the possibilities of vote rigging, fraud or strongman control?
Why, it could even be duplicated and done from the member office, which means there would not be the endless ringing of bells, just so the numbers could be counted?
It could also be duplicated in the members electoral and or or home office; meaning, more vital work could be done and or proceed apace, rather than at the whim or caprice of of mischievous or vexatious, power hungry idealogs.
Eloquent evocation essentially replacing the new age negativity of the loud-mouthed, ill-mannered short tempered, strong-arm bullies, who currently rule the roost!
And wouldn't that make such a pleasant change!?
[Whatever happened to progressive conservatism and entirely costless, courtesy and civility?]
State parliaments, if kept, could be reduced to, one man bands, assisted by a dozen or so, extremely competent officials, charged with enforcing completely harmonised rules!
Responsible reform needed, simply to eliminate the log jam, and the endless costly delays, and the endlessly cascading costs; that are so representative, of our almost feudal, combative Westminster system, replete with its ugly aggressive animosity, fatuous fiefdoms, pompous pontification, fractious factions, and dare one suggest, fictitious fabrications. Whyalla wipe-outs, and carbon consumed coal companies, i. e?
Rhrosty.

david f

I think you have misread the argument. It is not about getting back from government in proportion to what you contribute; quite the reverse. The article assumes that those towards the top of the income scale pay proportionately more in taxes and get proportionately less in benefits than those at the bottom. The question is, at what point in the income distribution should we switch from being net donors to net recipients?

A system concerned primarily with protection the poor and providing a safety net would be heavily weighted towards the bottom – those on relatively low incomes would be strongly net beneficiaries, those in the middle would be modest donors and those at the top have the largest gap between tax and benefits. In recent decades (especially under John Howard) the balance of benefits and tax breaks has shifted so that those on middle incomes gain a larger share of benefits, while those at the bottom get proportionately less. Many middle-income households are net beneficiaries, depending on their assets, family structure etc.

If a majority of the population perceives that they gain more than they lose when the government raises benefit payments, then the fear is they will vote to give themselves a bigger and bigger share of other people’s money. Hence the “self-sustaining leviathan” of the article’s title. The danger is, we could wind up rather what appears to have happened in Greece, where the balance of political interests and benefits made the necessary reforms for fiscal sustainability impossible, until the system collapsed

"The question is, at what point in the income distribution should we switch from being net donors to net recipients?"

I don't think it works quite that neatly. The wealthy have a whole bunch of ways of avoiding a lot of the income tax that a lot of wage earners can't avoid.

There can be a massive outlay as a net donor if you don't happen to qualify for the benefits side of the equation and don't have ways of getting around the tax obligation.

The continual push to make the wealthy pay more seems to just keep landing in the laps of wage earners who can't afford to keep propping up other peoples choices.

R0bert