My comment is about happiness, not tax.
Many years ago a colleague told me that happiness was a place on a continuum. At one end of the continuum was boredom and at the other was fear. Each person's happy spot between those two was different, and, indeed, could change at different times in your life.
Some people like to have a lot of excitement in their lives and so are happiest closer to the fear end of the continuum, others like to feel secure and so are most comfortable closer to boredom.
This is a very practical and useful definition of happiness. In my own life I have used it this way, when I start to feel restless and depressed I sense I have too much safety in my life and am slipping towards boredom, the solution is dial up the amount of risks I am taking. If I start to feel anxious and stressed and panicy, I realise I have too much excitement and risk and need to increase my sense of safety and security. This has worked very well for me, and has made a sense of happiness and well being concrete and much easier to achieve. Sometimes, of course, things happen that are out of my control, but even then the concept of the boredom and fear continuum has helped me minimise my misery.

What impact could this be expected to have on the behaviour of individuals who provide high value services? One possible outcome is that in part from a sense of resentment, and partly because they do not personally benefit from the extra work, they would reduce the extent to which they provide the service.

The effect would be to reduce the availability of the service, and push its price up.

Sylvia.

Surely this is a joke? I kept reading, waiting for the punch line, but I must have missed it. So it’s a good idea to base our tax system on a couple of touchy-feely surveys that say money makes us miserable? I can smell a Nobel Prize here somewhere.

350 words wouldn’t even come close to discussing the ridiculous statements put forth in this arti………..Wait a minute! I think I’ve just got the joke! Two lawyers lecturing us on the evils of money! Ah the delicious irony! Very subtle boys, very subtle, but absolutely hilarious! I’ve changed my mind. A top-notch effort from two of Australia’s premier comedy writers!

There you go again Bozzie. Getting upset with new ideas that are a bit too complex; negatively characterising the people and the ideas without actually undestanding them.

Really, there is more than a bit of information about the relationship between happiness and wealth. Lots of research shows that more and more economic success does not mean human success.

And not all lawyers are rilly rilly rich. Some work for social justice organisations and earn a pittance and are happy doing it and earning bugger all.

Believe it or not. The research is there.

Sylvia Else
There are many examples of people who provide high value services for little monetary reward medical researchers or sewage workers. As there is many examples of highly paid people who don’t provide high value services, Athletes and movie stars and such. The ones that make our lives better would still provide their services. Bozzie I have to agree with Mollydukes I can’t see anywhere in the article that says money makes you unhappy the unbridled pursuit of it can but not money

These fellows are onto something here. Individual PAYE income earners can easily pay a higher overall percentage of earnings in tax, than companies.

Average company tax is way below 30% with all consumption, a tax deduction. This is how the rich (no, the really rich, not the poor deluded top marginal rate payers), make it happen. And what capital gains is payable on sale of a business? Only 25% of the gain, after inflation and capital costs?

Bozzie, you’re either in the wrong business, or hiding something from us …

One of the things that makes me unhappy is paying a high rate of tax.

Second, the government should receive a lot less tax. A lot less. Why? Simply because they waste it and they derive no actual advantage (in happiness terms) from all this revenue - which can be used far more effectively by those that produced the wealth in the first place. The government and its socialist champions might think that money is important to them, but this is misguided and as a community we should not let such delusions guide important social policy.

And thirdly, liberty is a source of happiness so let have more of it

Bagaric has done ome excellent work in crimial law. McConville's main focus is corporate law - so it is fair to ask what these two academics would really know about economic issues in general and taxation in particular?

Firstly, basic factual error: Malcolm Turnbull has not said "the rich [are] not [paying] enough tax due to the operation of tax avoidance schemes." On the contarry, he said personal tax rates are TOO HIGH! See:
http://www.malcolmturnbull.com.au/news/default.asp

When two professional academics have basic facts wrong, one must seriously doubt their competence and objectivity on this issue.

Article makes constant reference to "the rich". Who exactly are "the rich"? What income qualifies one as "rich"? fifty throusand? Seventyfive thousand? One hundred thousand? Net or gross?

Some logical inconsistencies as well:
1. authors say that people are happy when they have "high degree of liberty", "are free to pursue their individual goals", and have "sense of participation and control" in their activities. However, all these happiness-creating things are eroded if hard-working people earn more money to achieve their financial goals, lose more than half of their income in tax!
2. authors say money doesn't make you happy - but then say poor are unhappy because they don't have any! OK, you could argue that they are actually unhappy because they can't afford basic necessities but what are basic necessities? In Australia, if they can't afford accomodation, it is provided free (or heavily subsidised). If they can't afford food, it is provided free. Education is provided free. Other social services are provided free (Actually not free - at taxpayers expense!)

Authors say: "important that every citizen in the community has means that are sufficient for them to afford the essentials of life. Thus, we must continue to raise taxation."

Raising taxation will just raise inflation and increase prices making things even less affordable. A market with minimal govt intervention, OTOH, results in competition and lower prices. For detailed discussion of basic economics see George Reisman's book, Capitalism:
http://www.capitalism.net/Capitalism/CAPITALISM%20Internet.pdf

Why, in Australia, do poor people exist? I personally know many people who Bagaric would consider "poor"- in fact I am related to some of them! They are not poor at all. Many have all the gadgets one could dream of. Others have no money because they drink, smoke and gamble it away.

Why should I, as a middle-income earner who is in top tax bracket but who works long hours and pays absurd amounts of tax, and therefore struggles to pay my mortgage and educate my child, pay for some lazy bum to sit at home and watch DVDs or for some dope-head's drug, drinking or gambling problem?

I note that article subtitle is: "A new perspective on progressive taxation". There is nothing new about it at all. It is plain old socialism. It has been tried and tested many times in history and it doesn't work.

The truth is that welfare and socialism has never brought people out of poverty. Instead, it keeps them there. In fact, it does worse - it spreads poverty. Anyone who disagrees, please cite an example of where socialism has led to a higher standard of living.

There is only one solution to poverty: Capitalism (by "Capitalism", I mean the free and peaceful exchange of goods and services).

Probably the most accessible refutation of the socialist mentality which pervades Bagaric and McConville's article, is Theodore Dalrymple's book "Life at the Bottom: The Worldview That Makes the Underclass". It is a fascinating read and one of the best books I have read in years.
http://www.amazon.com/exec/obidos/tg/detail/-/1566635055/qid=1114140635/sr=8-1/ref=pd_csp_1/102-0607526-7160156?v=glance&s=books&n=507846

Happiness may mean different things to different people, and it may mean different things to one person at different times in their life.

However there have been attempts at measuring such things as "Human Development" and indexing it so that one country can be compared to another.

At this page http://www.wttc.org/NU_compmon/compmon04/Social.htm there are different indexes available in spreadsheet form so that they can be sorted, but unfortunately the rates of tax of different countries are not directly included.

However in a number of areas of “Global Competitiveness”, Australia is not always near the top http://www.wttc.org/wttc/compmon/compmon.asp?compmonid=11

Mollydukes – Far from being new and complex, this type of thinking is as old as the hills and as dumb as dirt. Point out the merit of basing our tax system on the subjective and vague concept of “happiness”. Point out the merit in the idea that since rich people make us “unhappy”, we should do away with rich people. Where’s the merit in the thinking that taking away any hope or dream of attaining wealth is going to increase our happiness. This entire article is so ridiculous that I really am not convinced it isn’t a joke. Graham, is it?

Mollydukes instead of embracing every hair-brained, feel-good piece of tripe that’s foisted upon us, you should really apply some of your own advice and give it an impartial, critical once-over.

The top 25% of income earners in this country pay 65% of the personal income tax. How much more do you want? And to everyone who blathers on about the great big salaries paid out to CEO’s – companies aren’t democracies. Either buy shares in the company so you can have your say, or mind your own business.

I thoroughly agree with the sentiments expressed by bozzie, Terje and Aslan. In my view, this paper does not stand up to scrutiny as a serious exploration in the arena of economics and taxation policy.
What the authors do not consider is the classic Hayekian knowledge problem afflicting central planners. There is simply no way by which governments could adequately track levels, and changes thereof, of "happiness". This is especially the case because, as we all should recognise, happiness is a subjective, highly individualised phenomenon - the authors do not consider, in this context, classic microeconomic utility theory which states that one cannot compare interpersonal utility (as a proxy of happiness) due to its inherent subjectivity.
As an important aside, there are many instances where we cannot irrefutably know in advance what will satisfy us (notwithstanding our conjectures of what might do so). The decentralised market system assists in distilling fragmented, dispersed pieces of economic knowledge as to what might make us happy in a material sense. For instance, a producer selling goods and services in an open marketplace is effectively putting out a conjecture as to what they think might make consumers materially satisfied. Consumers respond by purchasing those goods/services which satisfy, and so bringing about a dynamic process ensuring material happiness.
On the other hand, for the reasons noted above, I seriously doubt the capacity of a central bureaucratic committee to facilitate happiness for individuals, including adjusting the taxation system to deliver greater happiness. Indeed, I would strongly argue that arbitrary progressive taxation is a recipe to promote material unhappiness, as well as fostering social discord.
May I suggest, Messrs Bagaric and McConvill, that you reconsider the economic implications of your argument. Friedrich Hayek, who produced famous economic, legal and philosophical texts, would be a perfect place to start.

You must have missed the bit that says, “we base our proposal on emerging empirical evidence on what makes individuals happy”.

Check out the new book by Richard Layard (an economist at LSE) ‘Happiness: Lessons from a New Science’

For an Australian perspective
http://www.cis.org.au/policy/spr03/polspr03-7.htm

Classic Hayekian knowledge didn’t imagine a society in which all (as Aslan says even the people who consider themselves poor) have everything they need.

So classic economic theory works for poor countries but not rich ones. Happiness for people in rich countries has not increased in the last 50 years, although incomes have.

Good relationships do make us happy, but working for increased economic success decreases our chances of good relationships. Trust in our community (as measured by the old wallet in the street trick) also corresponds to happiness.

But for example, classic economic theory increases unhappiness, as it proposes a mobile population is desirable and more efficient. However, mobility detracts from our ability to form good relationships and also decreases community trust; there is a correlation between crime and the numbers of newcomers in the community.

The most miserable are people in communist countries but the happiest are the highly taxed Scandinavians; perhaps because they do not see their taxation as arbitrary but as a contribution to a decent society in which people value things other than ‘getting ahead’.

Aslan, absolutely brilliant.Bozzie well done as well
The basics are well and truly covered if people do not smoke, drink or gamble, or buy $100 pairs of jeans and $150 sneakers when they obviously can't afford it.
There are very few people in this country who are poor who work hard and buy their necessities before their wants.
Kenny arguments about getting rid of sportspeople,movies stars because they are paid too much is silly. What about all the happiness people get from watching movies and sport or listeing to music.

t.u.s.

No, Mollydukes, I can assure you that I did not miss the point which suggests that "we base our proposal on emerging empirical evidence on what makes individuals happy".

My previous posting essentially questions the veracity of "happiness" research, and its public policy implications, primarily on the basis that happiness is inherently subjective to the individual. For instance, the robustness of qualitative survey evidence would be of concern in this area.

To go further, I am alarmed at the potential for using such an inherently subjective construct as "happiness" as yet another rubbery justification for wholesale government intervention, as is the case in the paper for greater tax progressivity. As a personal aside, I am not a supporter of income tax progressivity, but would a government hell-bent on promoting progressivity, using a "happiness" rationale, ask me as to how I feel about it, and then duly consider my views on the matter? I fear not.

To my way of thinking, this paper represents a case of scientism (again, as explored in detail by Hayek) at its worst. Just because something is "empirical", Mollydukes, does not shield it from scrutiny.

This lot and other do gooders talk about happiness an excesses and myself and many others are working very long hours,raising a family,paying taxes,school fees, food ,etc and these two over indulged lawyers are trying to tell us we have too much.Give us a break.After paying for all the stupidity in the form of red tape,excess insurances and regulation due to fear litigation there is hardly enough left for savings and retirement.This sort of mentality just encourages higher taxation and the growth of more Govt bureaurarcy that expands in the guise of protecting us.No wonder birth rates are falling.Our lawyer friends earn too much in proportion to what they actually contribute to society.They have us tied in knots and fearful of our own shadows.What a wasted use of intelligence to manufacture a need based on weakness and then sell us our rights.

The point is, that ‘happiness’ is not a subjective and vague concept. This research raises the issue anew but it is not a new idea (agreed Bozzie). That old but great mythology, the Christian religion, has also made similar claims about happiness for thousands of years.

Classical capitalism, and although I haven’t read Hayek, I have read enough of capitalist theory to understand this, only works perfectly if you have perfectly logical and rational individuals.

We are not and never have been purely rational and so governments have always had to step in and stop the powerful and greedy (who are not necessarily the ‘best’) from subverting the system.

All this article does is suggest that there is some more up-to-date knowledge on which to base taxation and other Government policies that would be more rational to cater for irrational people. Lke the one example I provided of the miss-match between capitalist theory and happiness theory.

The depth and extent of the irrationality present in the population, can be judged by the failure of people here to understand the article and the total rejection of the idea. LOL, even to attacking the writers because they are lawyers.

Arjay, obviously you aren’t one of the Australians who spent millions last year on food they didn’t eat and things they didn’t use or want.

Who were all those people, since so few people here admit that they have more money than they need.

I know I have but so many people here are sure they pay too much tax and need more money?

I’d post the link to this research but nobody would go there. You are all so sure that your opinions are better than research. Apparently research leads to scientism. LOL again.

The economy, according to Hayek, most certainly does not rely on logical, rational individuals (in a neoclassical economics sense) to help ensure the workings of a market economy. In fact, quite the opposite - some of his famous papers "Economics and Knowledge" and "The Use of Knowledge in Society" explains this perpsective further. These works most certainly puts paid to the notion that governments can somehow cater for irrational people by employing a vague, subjective concept such as individual "happiness" to justify changes in taxation/expenditure parameters. Mollydukes, I would be really happy to read the link that you could prospectively provide on this issue, so why not provide that?

I know what makes "me" happy. I really wish that social policy makers would stop telling "me" that I am wrong about "me". However if they insist that they know better than me what makes "me" happy perhaps they could explain why their chosen policies make "me" cranky and irritable. Maybe they don't know "me" as well as they think

Terje do you object to happiness research because you are an unhappy person? Are you really unhappy because you pay too much tax or is that just something on which you can focus and identify as obviously a bad thing?

It is so much choice that makes me unhappy. I am sick of it. Everywhere I look new useless products that I have to walk past on my way to buy the few products that I buy from supermarkets.

Julie Novak I am sure you would have heard of the Australian research about the amount of money spent on uneaten food and unused goods. If not check out “Wasteful Consumption in Australia” by Clive Hamilton, Richard Denniss and David Baker. It is available at

http://www.tai.org.au/

For more information on the happiness research see
http://www.lse.ac.uk/collections/LSEPublicLecturesAndEvents/events/2003/20030106t1439z001.htm

I am not an unhappy person in general. Its just that certain public policies make me unhappy. Just as choise makes you unhappy.

The only choices that I get miserable about are the ones that other people impose on me through force. The rest of the time I view the prolific number of choices as a sign that I am not yet dead

Some bits that appear to have been missed in this discussion so far.

- Is the pursuit of happiness really a great value to base society on? Maybe I read the word differently to others. Sometimes the excessive focus on happiness seems to seem a bit like "eat drink and be merry for tomorrow we die". Does happiness encoumpasses the other values which could be seen as important? I often get the impression that the pursuit of happiness does not bring happiness but rather the pursuit of other values, and that happiness is a fortunate side effect of more important issues.

- Some of the posters may have missed the bit where the author acknowledges that middle income earners pay a disproportionate amount of tax (PAYE with no legal way of skipping the excess).

- There does not appear to be any recognition of the value of supporting yourself in overall happiness. Are people who carry their own weight generally more happy than those who choose to let others carry them? If not then why do I bother putting in the effort?

- Why does capacity to pay increase a persons social obligation? If it does then why is the additional spare time available to those with shorter working hours not included in the discussion? There may be a case for a flat rate of taxation based on a certain number of hours. I'm being taxed at about 530 hours of gross income per year, if that is truly a reflection of my share of social obligation then those without the capacity to pay with money could pay with community service (assumed capacity to pay with time instead of money).

Please note that I am not attempting to deal with the issues around the genuinely severly disabled in the above.

R0bert

Here we go again!
Tax is robbery by governments from their citizens.
Does anybody disagree?

R0bert, you’re so right – I never really though of it that way! My figures based on hours paid, work out at 605 hours for the year, but when hours actually worked (instead of those paid), I get close to 800 hours. And that’s just income tax.

So why shouldn’t everyone put in their 15 hours a week of community service?

Even 10 hours a week would net almost $20 an hour at minimum social benefit rates – and that’s without tax.

Therefore, with tax, 15 hours per week for all social security recipients (excluding the genuinely disabled of course), sounds pretty reasonable to me.

Alternatively, we could reduce income taxes to levels where those working could afford to pay for services they need and have no capacity to provide themselves. We would then also avoid a huge bureaucracy to oversee such community service programs, and maybe even provide for more employment opportunities for those that really want to work full time – apart from sharing some social responsibility, we get to share some leisure time … Hey, this may even resurrect extended families and the community spirit. May even bring back some personal responsibility. Or am I just drifting back into some distant, irretrievable, happy past.

Seeker,

Your outline is exactly where we need to go. We need government out of our lives so that community can come back in.

Terje.

Taking government out of our lives does not necessarily bring community back in. it seems clear to me that the emphasis on individual achievement, ensures that community is not something that we learn to value.

The 'happiness' that these authors refer to is the sort of happiness that does come from a focus on community and taking responsibility. It is not the sort of short term happiness that capitalist values elevate.

I agree that community service is something that we could and should ask of those receiving welfare. We should not castigate and blame them for their failings. That is counter-productive.

the thing this government (and the opposition to some extent) does that makes me unhappy is assuming that I should aspire to have more material goods and should be actively advantaging my chidren over and above the children of others, who will after all, constitute the broader community in which I live.

Mollydukes, so trying to give your own offspring any advantage you can makes you unhappy? Unbelievable! I’ll be doing my best to make sure my children have every advantage I can possibly give them.

Mollydukes there’s nothing wrong with competition, there’s nothing wrong with success, there’s nothing wrong with the concept of some people having more than others, there’s nothing wrong with having an advantage. You seem to think that anyone who is materially successful must be dreadfully unhappy and have only obtained success by trampling over others to get there. I think you’ll find that rich people are generally much happier and healthier than poor people. Struggling to pay your rent on a diet of KFC and McDonalds does not a happy person make. If you don’t want to aspire to material success, that’s fine. No one else cares. But most people do want a degree of material success and it would make them very unhappy if our tax system was geared to make the realization of that aspiration impossible.

I always thought that the idea was to help the less successful become more successful, Mollydukes thinks it should be the other way around. I suppose if we were all poor, sick, and miserable, we could at least find solace in the universality of that condition.

By the way I forgot to give RObert a pat on the back. Very fresh thinking and definately something to consider if we want to go down the track advocated by Messrs Bagaric and McConvill.

Some futher thoughts on an alternate approach to taxation.

My general thinking so far is

- Those who work for a living generally do so as a trade off to get money in exchange for time (I know it is more complex than that but it's a starting place). In the end the most finite resource we have is time, everything else is a product to some extent of how we use that time.

- A just tax system should allow for the fact that time is our most precious commodity (some belief structures might disagree but it's a starting place) and place the same burden on all who are able to bear it.

- The current money only based system ignores the social responsibility of those with lots of time not used earning money and little money and unfairly penalises the PAYE taxpayer.

- Start with a determination of what is required to provide core government services (wouldn't the debate to determine what is core be fun?).

- Relate that to the per healthy adult ability to provide the core needs. This size population with so many earning an average income and so many with hours available etc.

- Every capable adult contributes either through tax or community service to their share of the core needs. This one needs lots of thought, I suspect there are some big holes in that so treat it as a starting place.

- Non core services are provided by a subscription approach, those who really think that such services should be provided can opt to pay additional tax or do additional community service (on top of their core responsibilities) to provide for them. Much of the non core things might be better done out of government anyway and plenty already is. If something is underfunded then not many really value it anyway. Again the debate about what is core is the clincher.

I am not trying to put forward a finished proposal but rather some idea's for feedback and thought. Maybe something different might come out of it.

R0bert

Prolific government and the welfare state in particluar is driving out the community values that bind our society. It may not have reached the tipping point however unless there is trend reversal it will within one or two generations. An excess of materialism that has arisen over the last 35 years has done so in tandem with the expansion in welfare.

"Community" is built on the giving of gifts and the extension of hospitalities and civility. Or in my neighbourhood the lending of hammers and shovels. Community is where we feel a sence of connection and reciprocacy with those around us. Community is a place were charity is a messy personal matter that is handled locally not a systematic mechanistic one that is managed centrally and remotely.

"Economy" is built on the trading of things. Where two parties come together voluntarily to exchange goods or services.

"Government" is founded on the threat of force and the imposition of rules. And the welfare state is based on theft, the forced removal of one persons property for the material benefit of another. A process that undermines the spiritual well being of everybody involved and erodes from both sides any sence of connection or reciprocacy. A process that is far more materialistic in its motivation than capitalisms aspiration to commercial freedom.

So long as government is seen as "the solution" to the decline in community we are on a slippery slope to hell. Community is an intangible form of social capital. It might take more than a generation for meddling governments to undermine peoples spirit of community however it will happen. Removing meddling government will not cause our culture to instantly revert. However the removal of meddling government is a prior necessity. We will not start to rebuild community until this thorn is removed.

The institution we call government is founded on force and the threat of violence. It is the antithesis of community. Any notion that social capital can be built through violence and coersion is seriously flawed.

Reduce dependancy on Social security,more self reliance,smaller less interfering Govt,more people working in private enterprise,reward hard work,and happiness will follow.

When the do-gooders prevail,productivity fails and the master's of wealth creation become slaves to the servants in our Govt.

A number of people have put in posts expressing general opposition to tax/government etc.

Whilst I have a level of support for the views expressed I am wondering what alternatives you would suggest. I tend to see both as a necessary evil and if there are viable alternatives I would love to hear about them. In the mean time I continue to take an approach of trying to reduce the impact of both on peoples lives.

I do support aspects of Government spending being funded by optional additional taxes paid by people who nominate to do so. Plenty of scope then for those activities to move into the private sphere if better served there or die a quiet death if nobody wants them enough to pay for them.

As an example I support (to some extent) the choice to invade Iraq yet I wonder if I would support it enough to pay additional tax to fund our countries involvement. I wonder how different the welfare system would be if funding came from people saying I will pay additional tax to support this.

Any better offers in terms of doing away with taxation and government or do you also recognise that we do need them but object to your freedom's being limited as a result?

R0bert

Robert ,it is not about alternatives but the degree of taxation and Govt and interference.Both Govt and the PS have to be more accountable to the public.There is just too much waste and regulation.

There is way too much government and taxation. Maybe if the real world trend was towards smaller and leaner government then we might have a meaningful discussion about how far this trend should be allowed to go. However the current real world trend in Australia is towards larger and fatter government. So why worry too much about limits that are:-

a) A long, long, long, long way off.
b) In the opposite direction to what we have been heading over the last 100 years.

Even if we reduced the size of government to the size it was at before WWII we know from history that society will not collapse into anarchy. Maybe when we reach that point we can review our progress and see if we wish to proceed onward to the size of government we had pre WWI

Well terje, if enough voices in private enterprise were raised in unision, Govt would have to listen.Private enterprise is too fragmented and too busy being productive.If all of private enterprise stopped work for a day in protest to all this Govt nonsense,ie taxes regulation and growth of bloated Govt bureauracies could be reversed.It just needs enough people with the will and the courage.No one has ever really tried .

Arjay, Terge, I'm completely in agreement that we have to much government and taxation. A quick reflection on public debate on tax cuts vs services will quickly identify why. There is very little public support for tax cuts (smaller govt) when services are threatened. In the previous sentence I am assuming that tax cuts do not equal deficit.

We need a cultural change before we will have smaller government or real tax cuts. Whole elections are won and lost partly on the basis of increasing the size of government (more services) then real tax will increase to go with it.

R0bert

If one side of politics were to promise real tax cuts and the other side didn't then I think the outcome would be assured.

The majority would do the sums in their own private time and all else being equal (ie foreign policy, monetary policy, personalities etc) they would vote for tax cuts.

The real problem is that neither party is going to elections committed to real tax cuts. They are all locked into the fiscal straight jacket that Costello and Howard have spent so much time crafting.

It is not the taste of the electorate that needs to be fixed. Its the menu that they are presented with that is lacking

The question I would like debated, is how tax can be raised, when it’s included in the CPI, and that is used as the basis for wage increases in our regulated labour market, which has still has the ability to achieve wage increases in line with inflation.
Inflation being, cost of good or service, plus the GST "tax”.

As I see it, the labour market gets the benefits of the social wage provided by the "tax" plus a wage rise.
This also means domestic business, without export competition an also price there G&S to achieve the same outcome, i.e. an income that rises with cost of G&S plus tax.

I have come to the conclusion, that it is DOUBLE dipping, and actually no consumable wealth is collected. I agree that "$"s is collected, but as the cost of G&S goes up with the tax, particularly tertiary services, the govt is actually in a net situation. This is because it has to “BUY” back the tax when it purchases “G&S”

Maybe this is the reason govts love the tax's that are not included in the CPI, like gambling, speeding fines, stamp duty. I see this as particularly revellent to those states without a large export sector relative to their total domestic economy.

Any modelling I have done shows a result of infinity, unless you “exclude” a section of the economy. (They pay all the tax then)

I have excluded any productivity improvement, as the benefit from this should be shared by all members of the community.

Maybe this should be the first reform, and it surly would it inflation on the head for a while?

Any comments or further information please.
I would particularly like a excel model if the above is achievable.