"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.

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Fact
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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...
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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?