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The Forum > Article Comments > Hitching a free ride can be good for all > Comments

Hitching a free ride can be good for all : Comments

By Nicholas Gruen, published 13/11/2012

And if non-excludability creates a free-riding problem, non-rivalrousness discloses a great free-riding opportunity.

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While the lighthouse metaphor, may be a good example of a free ride, with the light providing benefit for those who do or don't pay.
The govt that provides the service, receives benefit from the then better protected trade and commerce elements, which in turn boost tax receipts and or the economy.
Hopefully, occasionally?
Others, like big Pharma, receive incredibly immense commercial benefit from publicly funded university based medical research?
Big Pharma, makes billions from this research, very little of which they actually fund?
And indeed, go to quite extraordinary if currently legal lengths, to minimize or avoid tax?
Some of which, many millions, funds this most important research.
Perhaps we should means test the free ride, and have those who can afford to pay a very reasonable fair share, pay their just due?
Well the only way that may be possible, is by simply junking and or jettisoning all the current tax arrangements; and indeed, their myriad avoidance instruments!
And replacing all that convoluted complexity, with a simple, single stand alone, unavoidable expenditure tax.
A rate set at just 4.8% variable, would alone collect more actual tax, than the total net, collected by current arrangements!
The tax rate could then be very marginally adjusted, region by region, if necessary, to alone control inflation/stagnation.
Allowing/arranging interest rates to go to historical fixed lows, would turbo charge, the slowest parts of our three speed economy!
The unavoidable factor, would allow all current compliance outlays to be saved and add an averaged 7% the the average bottom line.
Thereby making the proposed reform, arguably the easiest to implement!
Albeit, against the vehement/vicious/venal objection of a extremely influential, incredibly powerful, multi billion dollar industry?
Or an ATO, with the ear of govt?
Posted by Rhrosty, Tuesday, 13 November 2012 11:54:25 AM
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