What I can't understand about the defenders of the current high-tax system in Australia is that they don't realise that the very rich here pay very little tax. If you have enough income to make it worthwhile a good tax lawyer can set up a legal structure that will quarantine your seven figure income and leave you legally entitled to collect the old age pension and all the other attached benefits. The only people who cannot escape the high tax net are PAYE employees on high incomes. Is there any special reason why this group should be singled out for disadvantage? If income tax were abolished and replaced by a higher rate of GST this would mean that the very rich would pay MORE tax, as GST is very hard to avoid. Personally, I have no objection to taxes, as long as I don't have to pay them. Taxes on poker machines, cigarettes etc are great because I don't consume them. The tax I hate is the GST. My main way of legally avoiding it is to eat at home, and do as many handyman jobs around the house as possible. The thought of saving the payment to the serviceman is pleasant enough; but the thought of legally depriving the government of money in a way that they cannot complain about is delightful.

It's ironic that you should choose Kerala of all places to discuss.

Kerala has one of the highest, if not the highest, rates of female suicide in the world, especially of young women. It is one of the few places where female suicides outnumber male suicides.

So what spurious correlation will the social scientists come up with to explain this one?

Social scientists don't seem to understand that correlation is not causation. Which is why most of their 'rock-solid' theories melt away like ice when exposed to the sunlight.

Gavin:FAIR-GO! mate. Just think for a moment just what a lower tax rate for those pathetics, or as some may say crooks who do not pay what they should anyhow.
1. JOBS for retiring government members, and all they have to do is vote yes. I know it could be beyond most but they are easily led and they all slavishly toe the party line.
2. Imagine the donations to the liberal party funds if they do vote yes. The libs will have more money than even telstra.
So Gavin I think a bit of self flagellation is in-line for you followed by a frigid bath or shower and a craven, belly-on-the-ground apology to the 'man of steal' numbat

New Orleans today represents the health of Australia tomorrow ( it may not be quite as windy and damp, but you get my drift ) if we persist in this mickey mouse debate about money and personal wealth; that's all it is. It certainly is not about tax.

It will be dressed up in all manner of neo liberal clap trap about the rights of the individual, self determination and freedom of choice but at the end of the day we only have X or 2 times X because some one else has sweet f all.
Mooney is right - the average Australian will pay dearly in health terms for tax cuts - take Tesltra out of the picture and an estimated 4 bill from the tax take and the a government inclined to get ut of service delivery as fast as it can and you a grim picture for middle to low income Australia. The threads in the safety nets are getting further apart already.

We will also be told lower tax is an incentive to work hard; well I know well paid lazy professionals and poorly paid hard working community members - the latter will continue to work hard for little return. And the former by the virtue of distorted societal values will keep getting paid a motza for doing bugger all.

And works not all its cracked up to be - hard work is its own reward some tell me - well then lets all work for free!.

The Howard Government must GO.

This tax proposal is the tip of the iceberg in the marginalisation of 90% of the Australian population in order to immigrate high level skills, consolidate business structures and streamline John Howard's economy.

Note that I say John Howard's economy, because if 90% of Australians are not directly benefiting from it then it is NOT the Australian economy. What we have here is a test pattern for neo feudalism in Australian politics.

The pinacle of this new FEUDALISM is not in fact the tax proposal or even the ambiguous workplace relations proposals. The real kicker is Brendan Nelson's portfolio gutting of free and effective education in this country. Immigrants coming to this country used to respect their fellow Australians. These days they see that the government wants THEIR foreign based skills, does not have the confidence in its own people to give them free and effective education, hamstrings its own people with HECS fees for life and effectively sidelines them from economic participation. Why should immigrants respect their fellow Australians?

John Howard has effectively sent out word that this is a foreigner's land of milk and honey and if they support him they can pushover up to 90% of any citizens that get in their way.

As was the case with King John before the Magna Carta, this strategy is great for economic growth and resilience. However it does not sit well with the populace at large. King John was brought to his knees over this very same strategy. I know my fellow Australians and it is only a question of time before 'Our King John' meets the same fate.

None of us, not least of all John Howard himself , wants this outcome. The alternative Labor government is grossly unpalatable to a clear majority. It is thus incumbent on John Howard to lift his game or meet his fate.

PS Has John Howard ever read early English history? He seems oblivious to the ramifications of what he is doing. Maybe he is just starting to forget things.

The article makes no attempt to separate out the influences of income inequality from wealth inequality. In fact it does not try very hard to argue anything, prefering just to float a few hollow assertions.

The author instead seems keen to bash neo-liberals. And yet he makes no attempt to understand their arguments. He says that the authors from the CIS appear (from their arguments) to be well educated, and yet he fails to return them the favour.

The author uses "neo-liberal" as a form of veiled insult and then pretends that it is wrong to use the word "socialist" in the same way.

I give him 4/10 for his article. Gavin must try harder

Gavin Mooney asserts that cutting taxes for the rich will lead to increased mortality. He does not provide any statistical analysis to validate his claim.

After reading Gavin’s article, I researched GDP per capita and Life Expectancy tables. The rankings are very similar; people in rich countries live much longer, however, if you compare OECD countries the figures are quite different, especially when you consider tax rates.

Switzerland, Ireland, USA and Japan with an average of 28% tax on GDP have a slightly better Life Expectancy than Sweden, Denmark, Belgium and Finland with 48% tax on GDP.

After considering this data, I believe Professor Mooney’s assertions are probably incorrect for OECD countries but may be relevant when comparing rich to poor countries

So, by your rationale, it is better to be poor together as a community (poorer even than your countrymen), and by being so, you can achieve mortality rates only 2-3 years less than the richest country. Just think about that logic for a second. Why not aspire to be the richest and live longer than everyone?

Norway has the highest living standards and one of the most equal income distributions in the developed world. How does such a paradise exist, you might ask? The answer is oil, oil exports subsidise the economy to produce the social welfare state they enjoy today. They've even thought ahead to put a US$189 billion nest egg to pay for their paradise well after oil runs out. Of course, not every country is blessed with being the third highest exporter of oil and a relatively small population. Mind you, what about the ethics of building a paradise on the back of big oil and all the environmental consequences of global warning etc? A bit of a quandary for socialist environmentalists, perhaps, but not for me. Good luck to Norway, but for the rest of us, I prefer to live in a world dominated by liberal ideals and capitalist economies, inequalities and all.

Just how do you define poverty anyway? Is poverty not being able to afford to buy your own home and living in state subsidized housing? Is it having to forego educating your children in private schools and send them to state schools instead? Is it having to buy sausages for dinner rather than fillet steak? Or is it in fact, not being to afford to eat, or put a roof over your head or send your children off to school at all? Poverty is not relative, it is absolute. If being poorer than your neighbour means you make less health conscience decisions about your life, then so be it. Not living as long as your neighbour is not a bad thing, if you both have a reasonable expectation of living into your 70’s, which is what the overwhelming majority of Australians share today.

HOT OFF THE PRESS

The 7 core beliefs of average Australians:

¦ They lived in a very successful nation for foreigners with imported skills and those working in public service or for government supported monopoly companies..

¦ They only have to be ashamed of the lack of vision and mental acuity of their politicians who sacrifice their own citizens for a free raid on education budgets through HECS fees and immigration and outsourcing of skills..

¦ Australia was well-regarded around the world ... by foreign predators who are given the wink and nod by John Howard to come here and do as they please and with as many amigos as they see fit..

¦ Foreigners with skills are allowed to push average Australians down on their luck. These individuals should be given a fair go if down on their luck but, once helped out the door, should not expect to be let back in with any kind of community support.

¦ Traditional institutions like the family were central but we can't stop stop them persecuting people with alternative views of course.

¦ People should be very tolerant, believe in unity when facing a common threat and roll over to our plans for neo-liberal-feudalism.

¦ Society should be classless where a person's worth was determined by personal character, hard work and foreign based skills that Brendan Nelson's edjucation portfolio doesn't have to pay for. We don't care about religion, race or social background. Allegiance to King John the first of Australia and never mentioning the word Runnymeade (ooops!) are the only criteria to be considered.

http://www.smh.com.au/news/national/howard-outlines-his-nations-core-beliefs/2005/09/08/1125772641082.html

King John I of England was energetic and enthusiastic about making government reforms. He set about restructuring his administration and reforming accounting practices. His main goal was to increase the crown treasury.
He would also sell forfeited lands and royal wards and widows to the highest bidder.
He was forced to sign the Magna Carta on June 15, 1215.

Mooney argues that the proposed tax cuts should be avoided becuase of:

"...ideals such as altruism, social solidarity, compassion, building the social fabric, developing a civilised society, or to social justice or a social responsibility to take care of the vulnerable in society."

Ok let's look at these ideals one by one:

altruism: Which section of income earners gives a larger proportion of its money to charities? Those earning more.

social solidarity: What does he mean by that anyway? Maybe he means that everyone has the same income. But to achieve that we would need a totalitarian state.

compassion: Last time I looked in the dictionary "compassion" was about voluntary acts of kindness to those in need, not about the Marxist concept of income equalisation.

building the social fabric: The social fabric is better built by people co-operating in mutual assistance at a grass-roots level, not by some big-brother government interfering in our lives from a great height, balancing out who gets what.

civilised society: Civilisation is built on voluntary enterprise and personal responsibility, not on the dynamics of class warfare.

social justice: What's just about taking away what someone works for with their own hands to give to someone else who may or may not deserve it?

Just came across this article. I know Wilkinson's work very well - he and I were colleagues at Sussex and debated this issue endlessly. Suffice it to say that the British Medical Journal has concluded that the inter-country comparative evidence used by Wilkinson does not stand up. It says his findings are "an artefact of the selection of countries. Now that good data on income inequality have become available for 16 western industrialised countries, the association between income inequality and life expectancy has disappeared" (BMJ 5 Jan 2002, vol 324, p.1).
On another matter, I wish critics like Mooney would make some effort to understand so-called "neo-liberalism" before they attack it. The tired claim that this perspective is blind to considerations of the 'social good' has been refuted countless times (most recently by Johan Norberg in his excellent "In Defence of Global Capitalism").