Greetings Kilmouski,

The "ALL OF US" was in the context of the last example, i.e. all of us will benefit from not having junk-mail.

Your sons don't like paying tax, but they already do and with this reform they'll pay less. At the end of the day, no one goes hungry in Australia and those that insist on not-working, do not anyway, only they currently learn to cheat on that road and in the worse case, also to break-in and do other crime (then we also have to feed them in jail, and their guards).

As you go through the examples, you can see that many of those who gain are working people. Not all gain is financial - integrity and peace of mind are no less important.

Note also that the good of others and the good of the economy are two distinctly separate things. While there is some overlap, not all who work for much money contribute to the good of others and many who do not work for money contribute even more. Perhaps your sons work too hard and should relax a bit.

Dear Pericles,

You are partially correct about my lack of knowledge of hippies: it's just that there were no hippies in my country of origin, so all I knew about them at the time is that they have long hair, never wash, do drugs, make much noise, have orgies all day and hate their parents and in fact all old people over 30.

So I don't consider myself a hippy, never did, because I don't answer to any of the above description. I do recall though dancing to the tune of "shake it to the left, shake it to the right, shake it to the hippy hippy shake", not that I could understand at the time either the words or the concepts of that song.

As I just explained to Kilmouski, I'm going to stop the cat-and-mouse game, not extend it. As I remove the cat, the mouse will have nobody to cheat. Feeding cats is more expensive than feeding mice. It's simple logic!

clearly austerity..has failed
http://www.youtube.com/watch?v=PG4bwMiMJb8

steve keen
http://www.debtdeflation.com/blogs/

Yuyutsu

Imagine living in a society where every adult Australian received the dole - you, me, and James Packer, with a reduced amount for children. Where all income was taxed at a flat rate, with no exceptions allowed, and no loopholes.

Consider a $10,000 dole, and a 40% tax rate, initially.

With this system, those earning under $25,000, where the tax equals the dole, will be supported by those earning more, automatically. We actually do this now, very inefficiently and unfairly, through a very complex system handled by thousands of employees of the Australian Tax Office and Centrelink, almost all of whom would now be redundant.

You have very eloquently advocated a similar system, much better than I could possibly do, but take it further. This "dole" is not charity, but is better viewed as dividends on investments - infrastructure - made by our forefathers in Australia. We don't consider James Packer a bludger for his unearned income!

We have been inventing labour-saving devices ever since we could think, and should by now be working 20-hour weeks. We could be working on that unfinished novel, learning about quantum physics, laying on the beach, or just spending more time with the family.

To your list of benefits, I would add the huge simplification possible. With a fixed tax rate, I lose the incentive to move income to other family members - they're all on the same rate. If Holden does pull out of Australia - no big deal - the newly unemployed are already on the dole.

Sadly, Beaucoupbob, it won't work the way you think it will.

>>Consider a $10,000 dole, and a 40% tax rate, initially.<<

The assumptions that you make are the same as Yuyutsu's. That when you implement these changes, all the other variables remain the same. Making a change that alters the outcome for everyone, will cause everyone to adjust their behaviours to maximise their personal outcomes from the new regime.

First problem: on what value will the 40% tax be levied? Earnings? Consumption? Transactions?

From the context, I'm pretty sure you meant income. So, the next issue will be what you determine to be the definition of "income"? Easy for the standard PAYG taxpayer. But that won't attract any additional revenue from James Packer. Rely on that. His tax lawyer will institute the necessary changes to accommodate your definition, and that will be that. If you'd like some evidence as to how this happens, take a look at the behaviours of the high-earners in the UK when the top rate of tax hit 98% in the early seventies.

You can also see that behaviours would change in the face of an increased consumption tax, or the imposition of a transaction tax. In the former case, more old people and those on fixed incomes would go without, and in the latter, the market would simply avoid transacting in Australia if there were alternatives. Which, of course, there always will be.

All I'm saying is that there is no simplistic solution that will enable the sort of universal bludger-support that Yuyustu is advocating.

Dear Pericles,

Of course I agree that there is no simplistic solution to all the problems of the world. What is proposed is an improvement on what we now have, hopefully one of many. There will still be murders and rapists and tax-avoiders, but if a flat tax rate is also implemented and unfair tax-deductions removed, then it will be harder for Packer's lawyers to find legal avoidance tricks.

We cannot base our life on the worst-of-the-worst. If your sole goal is to punish Packer and squeeze the last cent out of his pockets, then may I suggest that water-boarding is a more effective method - but do we want to live in a society where water-boarding is the norm?

I do not support transaction-tax. The main tax should be levied on income as it currently is, but with less exemptions. I believe that it doesn't need to be quite as high as 40% and the dole not quite as low as $10,000, but as Beaucoupbob commented, this is just "initially" and with other reductions in government expenditure the tax-rate should be somewhat lower and the dole slightly higher.