Rhosty, it is not being simple that makes your tax plan simplistic, it is your ignoring the catastrophic effects it would have on our economy. It would make it far more expensive to do business, and would drive most financial businesses offshore.

The nice thing about trade is that both parties involved end up with something more valuable to them than what they had. Your plan would discourage that. The tax would be on turnover (reducing opportunity) rather than profit, even though it's not insufficient reward that's holding us back. And the government would get no money from land except when it's sold.

And where did you get the crazy idea that the cost of collecting tax was anything like 40%?

I'm not proposing more complexity in the tax act, I'm proposing we move to a situation where land tax replaces all state taxes including GST.

The claim that we have a structural deficit is rather dubious. But at this stage of the economic cycle we shouldn't be trying to "fix" the deficit; we should be running a much bigger deficit to fix the private sector. Once the private sector recovers then we should start moving towards a surplus.

Nobody has us by the short and curlies. If foreigners stopped lending to us our dollar would fall a bit but life would go on almost unchanged.

As for the regressiveness of land tax, it wouldn't actually make land less affordable; land prices would rise much faster without it.

Aidan, you've have just not read anything I have written with actual comprehension have you?

Clearly there is a structural deficit.

I refute almost everything you say, which on my reading would have almost the opposite effect you speculate it would have!

Simply put, you just cannot make anything cheaper by adding yet another layer of complexity and cost to it. At some point complexity always becomes fraud. Quote unquote.

And our record and exponentially growing foreign debt may well be larger than our economy, going to hell in a hand basket, thanks to the most obtuse policies!?

Why, the government trumpets almost daily that they need to borrow more than a million daily from foreigners, just to fund current recurrent spending?

Bragging? How dare you rubbish the other brother like that! What gives you the right?

I didn't say that the current cost of collecting tax costs the tax budget bottom line some 40% of the net, other posters did and just days ago!

And they were my believable source; given the number of hands in the till before a penny reaches the nation's coffers!

However I concede the number could be entirely wrong and only 38.5%?

Simply put, if all the current tax take is just 4% of the GNP, [our total combined spending,] then a 5% expenditure tax on all that total combined spending, would raise significantly more tax.

Maybe as much as 100 billion per?

You do the simple sums! If 4% equates to around 400 billion then 5% would raise around 5 billion!

And while returning the no longer necessary current tax only compliance costs, [around 7% averaged,] to the bottom line of hard pressed Australian business.

And we'd keep far more of it as the net, if it just didn't have any hands on it before it hit the government coffers. And doable!

And it would be immediately available to consolidated revenue!

Think, how much could we reduce Government expenditure, if we no longer need to borrow against expected reconciled revenue, just to fund this or that dept's unavoidable outlays?
Rhrosty.

I always know what to expect, when someone starts talking dinner party conversations. I know I am, listening to a Canberra insider, or an inner city twittering class lefty. With the latter usually a renter, with the skew that puts on their thinking.

Real Ozzies only have bar-b-ques. As all Ozzies know, dinner parties are for slick trendies.

Not only is home ownership the very best superannuation, giving some level of cost of living reduction in old age, but as Rhrosty said, it is available to all. Those who don't own a home by old age are not only "bloody idiots", but almost every one got there by their own stupidity, or lack of effort.

As it is I pay a ridiculously high land tax now. It was lefty governments, advised by Alex & his mates, who unloaded large numbers of services, they had established to buy a few votes, onto local councils. Council staffing & costs went up like an intercontinental ballistic missile.

My rates went from $123.00 a year in 1986 to $2601.00 last year. For those mathematically challenged, as our author obviously is, that is a 2114%, [yes over two thousand percent], increase in my land tax, politely called rates.

Just what do I get for this kings ransom I pay in land tax each year. Well, there is a cast of thousands at the council chambers 60 kilometres away, mostly social workers & clerks doing not very much useful, a truck load of bitumen about 3 times a decade, filling the worst potholes in our narrow little strip of road, & a library truck for 2.5 hours a week, 46 times a year. That road incidentally, was built by the farmer who split off a few hobby farms to pay for his kids education, not by the council.

Continued.

Continued.

Those of us oldies, who have paid our due, & bought our homes, from what was left after paying taxes supporting every bludger, & politician in the country for years, are entitled to a rest from paying for any more.

I suggest you lefties dig into your own pockets for vote buying money, & leave us to fade away in peace. We paid our due, & want dills like you the hell out of our pockets.

All good points Has been,

BTW the 40% quoted to collect tax, is the ATO figures on Income tax,

it is a lot less for GST and other levies. The ATO says it costs them 40 cents in the dollar to pay all staff, rent, auditors, complaints department, fund the ombudsman office, coordinate overseas income tax, pay state and local councils rates/taxes, etc etc.

Excellent article Mr Sanchez! How can we keep ignoring all the studies showing land tax to be the most efficient and fair revenue base because land tax is an economic rent, a community-generated surplus, not an arbitrary tax on labour or capital (with all the related deadweight)? Commenters here clearly don't understand economic rents which Adam Smith, David Ricardo, JS Mill and Henry George pointed to as the natural revenue base.

How many people know we had a federal land tax in 1910, ever before income tax?

How many realise Canberra was set up on the basis of paying the rent of land into the public coffer - until PM John Gorton acceded to the land speculators' demands at a Canberra by-election in 1971? (Canberra is now only nominally on a leasehold system.)

How many understand the world is reeling from burst or bursting property bubbles because we fail to capture land rent? You can either have productivity or land price bubbles - not both.

As for disinformation from the main political parties about land tax, you only have to go back to Janine Haines' campaign for the lower house seat of Kingston in South Australia in 1990 when she said maybe we needed a land tax because of the then massive property bubble. BOTH parties immediately screamed "She's after your house!" She still managed to get an incredible 26% vote from thoughtful people who rejected the scare campaign and understood completely what she was on about. The main parties still remain complicit in burying the fact that land 'tax' (rent) remains the most efficient revenue base, as per looking for another report on tax reform rather than considering the well thought-out recommendations in Ken Henry's panel on "Australia's Future Tax System".