Peter Saunders asks : "Besides, why should people earning $80,000 give up nearly 50 cents in every additional dollar they earn to the government?"

It's a method to rectify the way that wealth that has not been fairly distributed this economic system. It is not a perfect method, but it is the only method we have.

People on six or seven figure salaries rarely contribute anywhere near as much to society as their salary figures would suggest. For example (if I can be permitted to allude to a slightly off-topic issue in which I have taken some interest) what has Ziggy Switkowski and the current Telstra board contributed to society in return for the tens of millions paid into their pockets by taxpayers and Telstra customers? They have run down our copper telecommunications network. They have destroyed the livelihoods of tens of thousands of Australians and contributed to rural decline, and they have held back the roll-out of broadband fibre-optic networks, whilst squandering billions of our dollars on failed overseas dotcom empire building adventures. (See also http://www.citizensagainstsellingtelstra.com)

Even if each of the boards members had, instead, been doing an excellent job could Peter Saunders please substantiate (other than by alluding to the circular argument that their salaries must be justified if the market says so) why each of these people's contribution to our society should be worth in the order of 20 to 100 times that contributed by someone on the basic wage? I think the same point still stands even in regard to many others earning closer to the $80,000 mark, especially for those who produce no tangible wealth whatsoever : real estate agents, property speculators, mortgage brokers, libel lawyers, advertising professionals, insurance brokers, neo-liberal economists and sociologists etc, etc.

Given that our current economic system has encouraged so much unequal distribution of wealth and so much economic activity in areas which are of little benefit to society as a whole, we would be better off to persist with the graduated tax system for the time being.

daggett,

I am guessing that the individuals you refered to are on a bit more that $80k. To be fair try describing why someone on $80K or less should contribute such a large proportion of their income especially as the current tax structure does not take into account how much they had to work to get the income.

I have suggested in another thread that tax rates might be fairer if based on an time rather than actual income. That shares the responsibility more evenly.

Extra effort should not mean higher tax, higher pay rate per hour should, less effort should not reduce the burden but a low hourly rate should. Some area's I have not worked out (investment income etc) but it is a start.

I agree that in many cases the top end of town is over paid and under performs (sometimes that might not be the case).

Robert said:

“Agree that in many cases the top end of town is over paid and under performs (sometimes that might not be the case).”

I would say that most people agree with that comment.

Their wages also increase at a much faster rate than bottom end wages.

Maybe, just maybe we should look at the reason WHY this happens.

Change the whole debate as the gap would be much lower; meaning the argument for higher tax rates for the top earners would be greatly weakened.

The upside of Derik Smith's 2% tax is that many multi-nationals would then have to pay tax for the first time.You see a 2% flat tax with no imput tax credits compounds at each sale.It grows expodentially.{This would encourage vertical intergration;Something that would need to be countered.}The idea however has a lot of merit since at a retail level it is not worth your while to give cash discount for a 1% drop in price.

Govt won't go for it since it is too radical and the multi-nationals just have too much power.Not to mention all the tax accountants and as Hugh said, public servants who will lose their jobs.

The ATO could just look at the turn over of a business and say you pay 2% of that amount.There would be no need for 20 000 ATO employees or thousands of accountants.Allow each business owner and employees $50,000 per person income tax free and the rest is taxable.There would be no need for all this regulation and red tape.
We have tied ourselves in so many knots under this present system, that there seems no way out of the mire.

The concept is so simple, that it is scary.We could reach Nervana in an earthly existence!

I just heard you, Peter Saunders, run away, on Radio National's "Life Matters", from a confrontation with one of those in whose interest you claim to be acting by promoting so-called "welfare reform". How convenient it was for you that had to go to some other appointment at 9:30AM? At least you were forced to concede that there is "still an issue" to be dealt with in that the tax-free threshold for the lowest paid were not raised. Another "issue" which had not been dealt with were the lack of suitable childcare places for the single mothers whom you would force back to work. I won't hold my breath waiting to hear any more from you about this one.

Of course, we can expect to hear a lot more from you about "labour market reform" which you claim will create all the extra jobs necessary to accomodate the would-be pension recipients who will now be forced to look for work. Do you have any idea of how little unskilled workers are already paid? Well let me tell you as a university educated IT professional now forced to work in casual unskilled occupations as a result of the current oversupply of IT professionals. My last casual occupation paid me 15.38 an hour.

That hourly rate is to compensate me for sick pay, annual leave, long service leave and other benefits that full time employees get. If I was full time, I would be getting closer to $13.00. (And even that is not the lowest that casual workere are paid these days. A company which conducts traffic survey pays its casual workers as little as $10.00 per hour in Sydney, when I last enquired last year.) During the last week I worked there, I worked a number of days lasting 9.5 hours (excluding lunch). I got no overtime for those days, because overtime rates are now only paid when the total hours worked (even on weekends) exceeds 38 hours in any one week. The last day on which I worked, I was sent home after only four hours. (to be continued).

(continued from previous post)

I would have thought that anyone with a shred of compassion and decency would have appreciated that these sort of pay rates and working conditions are already inadequate for even single people let alone those with families to support, yet somehow you think that work conditions need to be even more 'flexible'. Your proposed so-called 'reforms' to the labor market are, in fact, only a prescription to increase working poverty to suit the needs of Austalia's elite.

When all else fails you always fall back on how 'unfair' it is that poor working Australians must pay taxes in order to support supposed malingerers on pensions. In reality, much of this welfare budget goes into the pockets of landlords, property speculators and others who derive income from Australia's property so-called 'industry'. In 1996, the Howard Government decided to spend money subsidising rent payments, rather than to put equivalent funding into public housing. This only helped to fuel Australia's runaway housing inflation.

Had they seriously pursued the former course, we could, instead, have a situation where the cost of housing would be much less of a strain on the Government's, and, in fact, everybody's budget. Indeed, the Housing Trust of South Australia, set up by Hugh Stretton never cost South Australia's taxpayers a cent.

Much of the money that is not wasted on private housing costs is wasted on the inefficient semi-privatised job network and on the petty harassement of welfare recipients that is required by our current system.

There is a lot more that I could say about yourself and your much ballyhooed book "Australia's Welfare Habit". For now, I will only add that if the true value of everyone's work was properly valued, that single mother you ran away from this morning would be paid, in your place, to write far more honestly and usefully about social welfare, and you would be forced to sweat in order to subsist as I now have to.