“Now call me old fashioned but if you want to get extra cash to families with children I reckon you’ve got to get it from people without children.”

- Perhaps Gruen would like to explain how he reconciles this with “Thou shalt not steal”.

This type of thinking highlights the evil of socialism – it relies on compulsion and force to achieve its utopia where we are all dragged down to the lowest common denominator of equality.

“Our tax system raises revenue according to individuals’ capacity to pay.”

- In other words, the mob casts around for those with more money than them, and proceeds to take whatever they want.

All this need-based mantra hides the fact that need is subjective; I need a home theatre, so does that entitle me to walk up to someone else who appears to be more wealthy than me and help myself?

Socialism, which is what the author is advocating, has been well and truly discredited because it doesn’t work. It lowers overall living standards, and fails to lead to prosperity.

However the absolutely-worst aspect of it is that it fails to respect the principle of self-ownership, and as such is morally indefensible. In the final analysis, it always involves coercion, and it always denies freedom and choice.

Winston
I'd hardly call the scenario you portrayed as 'socialism'. Seems more like responsible government to me.

To a very small degree it is I guess, but I'm not sure what your offering as an alternative to this ?
Are you saying "human nature will suddenly 'get religion' so to speak and immediately begin providing out of the goodness of their capitalistic hearts for the less well endowed ? Well, if they DID 'get religion' and I'm referring here of course to the experience of the early church in Acts 2 where it states "And each gave according to his ability, and there was non lacking among them"
Of course, we now also see that Marx was a plagerist.

Winston, you seem to be advocating a very hard 'survival of the fittest' line here, and thats ok, but I think you should spell out your broader position for all of us to evaluate....

Do you also believe along with Peter Singer that we should 'cull' the weak or disabled infants we produce ?

I totally agree that 'socialism' is a dead and unworkable ideology in this world, but at the same time, unrestrained capitalism is equally faulty and dangerous. One will bankrupt the countrys finance, the other will bankrupt its resources.

So, I argue that a middle road is not just workable but absolutely neccessary. I am considered 'rabid right wing' by some, and probably left of Marx by others. (just depends on the issue) but you seem out there with the economic equivalent of Pastor Fred Phelps from www.godhatesfaggots.com

Socialism as a political idea is far more pervasive in its manifestation than the article here.

So, I always advocate that reconciliation with God, through Christ is the only workable approach to life. No good "system" will ever work, without renewed people to drive it. Further, even a 'bad' system can be joyful if the people running it themselves are renewed and selfless following Jesus words "If anyone would be great among you, he must become the servant of all".

Nicholas has his heart in the right place but unfortunately he neglects the impact of these subsidies and handouts. Of all the subsidies and handouts that I can think of such as private health insurance, child care subsidies, private school subsidies, first home owners grant, baby bonus etc etc etc, I can't tink of any that has offered cost support to the consumer. In all of these cases the resulting increase in demand has forced prices up, in most cases equal to the value of the original subsidy. The costs of child care, health insurance, housing and the rest are no more affordable today than they were before the subsidies.

Sorry Nick, it hasn't worked.

The top tax rates have to be lowered, or else more rich people will just take off overseas and leave the tax bills to the middle class.

Why do you think Rupert Murdock lives in the US and Pat Rafter lives in the carribean.

A certain level of Churning is required, a safty net is needed when someone just have bad luck, whether it is health wise or someone losing their job.

However the more churning that happens, the more money we loses from society, when we take $100 from the rich, only around $80 (an optimistic figure) get to the poor, the rest are eaten up by the beauraucrats distributing the money (Centerlink offices) and government promoting what is available (booklets and ad on tv).

I think the tax rates are too high, but try getting someone to go to an election promising to scrap medicare and reducing subsidies to public school and see what the reaction would be.

People won't be happy even if they get a $120 tax cut, but have to pay $100 more in school fees

Thanks to Nicholas Gruen for his interesting article. Obviously, much of the “churning” is positive, that is, well targeted and effective in building triple bottom line capital for the nation (Social, Environmental & Economic). However, there are is also churning that is working against our interest. These negative ‘churns’ include the perverse subsidies which encourage greater consumption of fossil fuels.
See www.isf.uts.edu.au/publications/CR_2003_paper.pdf

Corporate welfare is not justifiable when it is propping up old destructive industry and holding back clean renewable and sustainable replacements.

Regarding the notion that we need low taxes to keep certain people in our country- Do we really want to be held hostage by so base an ethic, or by people who are so narrowly motivated by the current fiscal measures of profit? The best leaders, and there are many of them, act for higher reasons.

Most of the true value in life does not have a dollar figure on it.

PS. Tax does not impede the likes of Kerry F.B. Packer (peace to him). Tax is like genuine competition, both are currently avoidable by those who can most afford them.

"Our tax system raises revenue according to individuals’ capacity to pay." - that is an assumption held by many but the reality is that our tax system raises revenue based on a formula not on capacity to pay. There are many reasons why capacity to pay may be different for people on similar incomes (recovery from divorce, child support, health considerations, victim of crime or misfortune etc) so the premise that the tax system raises revenue acording to the invividuals capacity to pay is a gross simplification which does not reflect the reality of many peoples lives.

In my own case I pay the same tax rates as someone on the same taxable income as myself who still has their superannuation intact, with a low mortgage and who does not have to pay a signicant proportion of after tax income to a former partner with an adversion to paid work.

Likewise I pay the same level of income tax as someone one on the same taxable income who is in much worse financial circumstances.

The tax system has almost nothing to do with capacity to pay and a lot to do with the ease of collection.

R0bert

Its all very well to consider government subsidizies to families as good, but you also need to consider where they come from. In terms of middle (versus lower) class families, you can either take this money from

1) Single poor people. Apart from the fact this doesn't seem fair, taking money from these people also simply shifts the problem of poverty traps to them. This is particularily costly in the long run, because males from this group also create the most social problems, like crime, in society.

2) Single middle class people. The problem with taking from this group is that you are stopping them having families in a fiscally responsible manner, since they won't be able to save money due to the extra tax. They are therefore forced into a situation where they have children and then rely on the government for handouts that they wouldn't need had they been allowed to save some money before. Why force people to rely on the government ?

3) Rich single people. I don't see why middle class people, who already have enough money (hence "middle class"), should be subsidized by someone else, even if they have more money. More practically, "Rich and Taxable" in Australia means cash-flow rich, not capital rich. This is generally young smart and enterprising people -- a group that is already too few in AUstralia. These people are also the most mobile (not having family or other constraints), and therefore most likely to emmigrate when they get cheesed off by high taxes. The number of people doing this is at a record high. Losing the smartest and most enterprising is hardly a good propsect for the future (ask anyone from NZ), and indeed, one can imagine the amount extra you collect by raising taxes is offset by the amount lost by losing people likely to generate the most business and money.

Which is your suggestion Nicolas ?

There is a lot wrong with churning Nicholas,it creates huge bureaucracies that waste our tax dollar,punishes our dinminishing middle class and thus reduces incentive,hence less wealth and less tax.
Just don't tax people that much in the first place.Govts like it because they can give back what they have stolen at election time and big note themselves on their good management.No one earning less than $30,000.oo pa should be paying any tax.

The lack of will to reform the tax system by the Coalition has been a major disappointment.They are only getting away with it because Labor is weak and pathetic.

Shame on you, Mr Costus Fellow,petros may mean rock but you have become petrified of tax reform.

Can our rising star of Mal content,Come and Turn this charging tax Bull around?

Mr Costus Fellow also had a "lean and hungry look",but now there is one more,who is looking leaner,hungrier, smarter and who is singing the sweet music of tax reform.

Family payments need to be made to ALL parents, and child-rearing costs need to be tax-deductable...

At the present if you are on welfare, each kid you have makes you better off... so birth-rates of welfare-dependant parents are high.

If you are middle class, or wealthy, every child makes you considerably poorer... so our middle classes, our educated people and our wealthiest people have very few kids.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Fact
+++++
In 1996, 3,837 wer born to women with no tertertary qualification, while only 817 to women with a bachelors degree or higher qualification. That's an average of 2.4 children per women, compared to 2.0 for degree qualified mothers.

Or, to look at it another way, looking at the social and economic disadvantage of the region where people live, in the most disadvantaged region the birthrates are 1.3 times higher than in the 'least disadvantaged' regions.

see citation at end...
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

If nothing else, this is an expensive problem. Each child from a welfare-dependant parent cost the government a lot of money... the welfare goes up, school counsellors and social workers are much more likely to be needed, and preventable health problems are also much higher. Not to mention that a whole generation of is growing up where they are unlikely to know anybody who works full-time...

If our best-and-brightest are having so few kids, what will happen over time to our population?

PartTimeParent@yahoo.com.au

1:
Australian Institute of Family Studies, "Fertility decline in Australia, A demographic context". Family Matters No.63 Spring/Summer 2002

Yep,Part Time Parent.In the the case of reincarnation of the spiritual self;if the body be the vehicle for the soul,shouldn't we be improving the vehicle?

As you have observed,we are doing the absolute opposite.How can the soul successfully express itself with both a retarded mind and body?

The only residual problem with churning Tax dollars for the NEEDY, you create NEEDIER and the real NEEDY never get what they need. So after there is NEEDIER than there is, not so needy, then they become needy, we can all flourish in poverty and die and enjoy the debortiary selfish greedy lazy needy get.
If that sounds like poetry, you must be a Bureaucrat.
Why not make people less needy and more self sufficient?
And keep Governments, and their Misery worshiping Looters and Moochers away from my HARD EARNT LIVING.
In another language: Get a Life of your own, and stop bleeding every one else to death. It is economic and values Murder.

Does the market pay us all the true value of our worth? I believe the market undervalues the vital contribution of many and perversely rewards the exploitation and plunder by some.

In our current economic systems, redistribution of wealth is not only just, but is vital to a healthy society. Redistribution is just so long as the ‘free market’ is not sufficiently just.

Many people do vital work which is outside of the market. Think of brilliant people in modest paid not-for-profit work. The policy and culture of society can be structured in an infinite number of combinations. The way it is currently structured favours some more than others. As such, some ought to support the current structures more than others.

The market has not sufficiently overcome the problems of entrenchment. Where people who have gained wealth and power become entrenched in that position by using power to influence decisions that stifle real competition. The current fossil fuel 'mafia' is a recent example of the problems this causes.

The market also has not yet sufficiently overcome the problem of short-termism. Where plunderers can profit today by selling of the natural capital which was bequeathed to us, and that we should have passed on to benefit our children.

The economy is not a perfect measure of wellbeing. A strong economy is not necessarily the mark of a healthy society, nor healthy environment, nor healthy democracy. We ought not confuse wealth or income with virtue. We ought not make policy which gives pre-eminence to the market, nor assumes people are primarily motivated by acquiring personal wealth.

The economy is an extra, an important element, but not the most important. We can have a healthy environment with no economy, We can have healthy soical structures without dollars. But we cannot have economy if we bankrupt our environmental or social systems.

There are great costs to our current acquisition of personal wealth. We are liquidating some of our greatest assets. We ignore this growing debt at our peril. Concentration of wealth and pandering to individualism isn't the mark of good governance.

What’s wrong with churning?

Nothing’s wrong with churning if well implemented (as was also true for communism). Now look at who is implementing flat tax systems, with perfect lateral fiscal equity for all. Churn baby, churn.