Just so that I'm not misunderstood, I proposed raising the tax-free threshold as a means of achieving greater efficiency. It simply isn't possible to raise a family on $26,000/year. So, people on that income or less will inevitably be seeking rebates, grants and all the other 'benefits' that are available. It would be far more efficient simply to eliminate these things and just let folks in the lower income brackets keep what they earn in the first place.

On the issue of 'tax cuts for the wealthy', my impression is that what people are objecting to is the fact that the wealthy pay less than their 'fair share' thanks to the very complexity of the tax system. By all means, cut the top marginal rates, but this must be acompanied by a signifigant simplification of the tax code and the elimination of most of the allowable deductions that people can make. As Terje said, it's about raising revenue, not punishing the rich.

One final point, we need to tax the revenue from speculative activity far more heavily than we do at present. Speculative activity contributes nothing to the overall creation of wealth and diverts resources from those activities.

An absolutely superb post from Craig Blanch- it is precisely on the money (pardon the pun). Australians have to wake up to themselves before the brightest amongst them decide to leave because of the tall poppy syndrome. I for one am sick of resenting the fact that the wealthy can never do enough in the eyes of many who have never done anything to support there countryman.

Craig Blanch, your logic is to be respected. Yes, we should be careful not to scare off the few bright people amongst us (Fred et al), lest we impoverish our tribe’s chances for ongoing wealth creation.

Wait a minute, though. Why does Fred have such wealth, to start with? Yes, I know, the Super Rich People of our world are always to be respected, people who never exploited a fly on the way up, and who play on the same field that us poorer cousins do….. ; )

But here is more my point: even if Fred did generate it in a ‘fair’ and legal manner, is it wise to allow one person to maintain for themself such vast stretches of the sum total?

The idea that one ape in the jungle owns (or ‘earns’ or 'invents') for themself all the good stuff, which thereby forces the nine other apes onto the meagre leftover scraps, strikes me as a strange one, one particular to humans only.

Little wonder there are nine other, poorer diners at the table: whilst Fred has all the positional advantage, it’s no surprise that the other nine diners have little room to enrich themselves, since they would need to figure out a way to tempt the gifted Freds to hand over their source of superiority. Try competing with Fred and the positional power his superiority affords him!

Surely, we can think of a better way to reward the best and brightest amongst us, whilst at the same time better ensuring that their activities happen in a context that doesn’t see them disproportionately favoured to the point of unbalancing what ought to be a natural distribution?

Doesn’t it strike everyone as strange, that the current end result of free market capitalism is that precious few apes have ended up cornering a disproportionately large share of the jungle? If we let this game continue on its trajectory, do we really want to end up with a situation where a single ape owns 99.999% of all the world’s wealth?

'When the going gets weird'......

Your name certainly is an apt description of your posts. What you seem to be saying is it really sucks that the state distributes taxes but that it also sucks that the state doesn't take more taxes from the wealthy....You're not a member of the Chinese Communist Party are you?

"As for taxes, Yes services must be paid for. I understand that. I also have seen an incredible amount of waste in the name of government service. And lest we forget corruption the sister to waste. As government has grown, accountability has gone in the ditch. I just don't see that government is good when there are so many problems it creates through inefficiency, waste, and corruption."

Bureaucracy is a necessary evil and will continue to exist as long as governments exist. We can only hope to minimize inefficiency.

My problem is that we are lagging further behind the United States, Japan, and most of western Europe in terms of infrastructure. Tax revenue continues to be churned, not invested. In fact, I would dare go as far as to say that Australia doesn't understand the meaning of investment. And no, diverting resources away from more productive sectors into an overpriced housing market is not an investment as it exacerbates Australia's (already chronic) economic imbalances and does nothing to boost long-term growth.

When_The_Going_Gets_Weird:

To address some of your issues:
(i) "…even if Fred did generate it in a ‘fair’ and legal manner,"
To begin posing the question with "even if" underlies a given that Fred is, of course, a crook because he is rich but, for the moment, we will assume he is not. Not exactly an objective view. The pious sanctity that is the realm of the Association of Preferred Victim-hood does get wearying.

(ii) "…is it wise to allow one person to maintain for themself such vast stretches of the sum total?" In whose wisdom, do you think, could we trust with the resumption of wealth from these people? Those that haven't got what it takes to earn it? Those that can't be bothered earning it but criticise those that do? Those 'advocates' of the poor that use them just as shamelessly as the prostituting bourgeoisie to push their own ideologies?

(iii) "The idea that one ape in the jungle owns (or ‘earns’ or 'invents') for themself all the good stuff, which thereby forces the nine other apes onto the meagre leftover scraps, strikes me as a strange one, one particular to humans only." Where would we be without Darwin, eh? But, WTGGW, you got it wrong again but thanks for playing anyway. There are many sections of the animal kingdom that have a very real and incontestable hierarchy in who gets what. The lion springs readily to mind.

(iv) "Little wonder there are nine other, poorer diners at the table: whilst Fred has all the positional advantage, it’s no surprise that the other nine diners have little room to enrich themselves, since they would need to figure out a way to tempt the gifted Freds to hand over their source of superiority. Try competing with Fred and the positional power his superiority affords him!" Of course, how could we leave without the piece de resistance of all true advocates of victimhood: It's all Fred's fault!

WTGGW, your concerns are not without foundation however, tearing down the achievements of others does little to elevate those that are TRULY in need.