Divergence : I don't think we need to become like the US. In fact, I was quite happy to see that the author infact proposed some taxes that were aimed at asset rich/cash poor people. I think you could in fact raise a huge amount of money simply by adding people's home residence into an assests test before giving them government benefits. However, this is politically unpopular since it would mean retirees would need to take out negative mortgages on their homes, so we are stuck with a situation now where people with huge assets are being subsidized by people poorer than themselves, and this problem is only going to get worse as the population ages. Thus young people carry the burden of tax and this tax helps keep asset prices inflated. No wonder people get cheesed off with it.

In addition, I'm just trying to give a realistic future scenario for what will happen to young professionals in Australia. If you really don't think the global movement of people from one place to another is a problem (or going to be) for Australia (it already is in some industries -- look what happened to Australias biotech industry, look how many Australian teachers work overseas, etc.), then, as I pointed out, look at New Zealand, or note that 5% of Australians live overseas, and those 5% are of course the top of the top in terms of education and work skills (excluding a few backpackers). Personally, I don't know why Australians are so willing to leave compared to people Europe, but the fact is they do and that the number leaving is increasing. The most likely factors are language (cultural), and better working conditions, whether they be higher wages (the UK), lower taxes (Asia, the US), or better conditions (the US -- particularily for scientists). In case you have another reason, I'd love to hear it.

Hang on, whoah lol. The CGT was lowered, but inflationary effects were not accounted for under the new system. If you faithfully put your hard earned savings into the stock exchange, to provide capital
for Australian companies, taxing that money only once, makes perfect sense. Even now, inflation is not accounted for. Yet if you put your money into your McMansion and walk away with half a million,
its all tax free. Sounds just and fair to you? Think again.

Yup, students should help pay for their own education. The lawyer who charges 400$ an hour for his time, should not expect the small working man, to pay for it.

Kerry said it right "The Govt don't spend it so wisely, that we should give them any extra". Perhaps they should learn to stop peeing it up against walls, before they want an even higher share of GDP to pee with.

I'm with Yabby,the more we give Govt the more the bloated bureaucracies grow.Our present Govt likes churning so they can tax us more with bracket creep and bribe their way back into Govt by giving us back our own money.

In the 1950's we had an average income tax of 11% of total wages,they were able to build The Snowy Mountains Scheme and all manner of infratructure.Now we have $ billions reaped in taxes that go towards paying 1.5 million Australians of working age to be totally idle.That is one of the major reasons why there is no money for infrastructure.We have become "The Can't Do Generation."

The Future Fund of $18 billion is solely for unfunded Super Liabilities of the Federal Govt.By 2020 the Govt will need to find $140 billion to cover public servants Super and this does not include the State Govts which have far more public servants.

If we tax more,there will be less productivity,business and investment will move overseas,and we will have a lot more than the present 1 million Aust professionals working overseas.Remember the UK before Margaret Thatcher took over.It was a basket case.

We can be far more clever in both our approaches to tax and making everyone ,including Govt pull their weight.

This article smacks to me of some uni students realising how hard the real world is and yearn for a cushy Govt job that will molly coddle them for life,just like their parents have done so for the last 20 yrs.

In terms of direct taxation, Austalia is a relatively high taxing state. However, that really does not matter. What matters is how much of the purchasing power of the individual dollar is absorbed by pernicious indirect, as well as direct tax.

On the combined direct/indirect basis of assessment, Australia is one of the lowest taxed of the Developed countries.

The interesting part of the analysis is not to ask the tax question by itself. The real question is what is the “Life satisfaction levels. of those who are highly taxed, versus those who are lowly taxed.

A brief review of the data available from nationmaster.com reveals a negative correlation of -.32 between levels of overall taxation and levels of life satisfaction, in other words, the higher the tax regime, the lower the life satisfaction index.

Anyone who thinks there is any merit in taxing people should think again. Using taxation to engineer the ideal society depends on ones definition of what an ideal society is.

Based on my personal values, which emphasise self reliance and reward for effort (distinct from the dead hand of socialist levellers and bureaucratic intrusion into every aspect of our lives), the less government pretend they know what they are doing and the less they tax us for not doing it well, the better.

Maybe I am missing something in this debate.

One of the problems I see in relation to the tax reform agenda is that we don't have an audit of where the money from taxes is actually spent.

For example: people such as Richard Pratt are given money from the fed govt, BIG BICKIES, with no mutual obligations or audits. Holden and more recently Ford motor companies have also recieved grants.

Now these and many other incidences of welfare for the rich, might have a reasonable explanation, but I would like to see the actual figures.

The medicare levy is a percentage, so people earning 24000 pay less than those on 80000. Where is the money going? Why should a person who is already paying heaps of medicare levy be expected to pay private insurance. How much have Drs income risen/fallen- I would like to know hard numbers. Where is the money going?

The way I see it, the figures on money that goes to the government to deliver services etc for the community are not available or clear. It all seems to be secret.

I want to see the figures listing govt spending on propaganda, opps I mean public information campaigns, and support for the wealthy, infrastructure etc.

The impending budget does not give any hard facts and figures, just smudgy make believe numbers.

Put simply, before we go any further into tax reform, lets have the figures. I for one want to be fully informed.

re:Sweden-and-the-social-democrats:Why-would-people-consistently vote-in-a-government-that-'doesn't make them happy'? Also see-the-results-of-a-happiness-survey-for-high-taxing-Sweden-and-the-Netherlands: http://www.fsmitha.com/world/sweden.html

"The happiness survey, described at Nationmaster.com, has the people of Sweden third in the world, behind Iceland and the Netherlands."

re: figures - according to 2001 figure: "Australia [spent] a mere 33.3% of GDP in government expenditure, compared to 43.4% in Canada, 48.1% in France, 48.7% in Finland, 54.9% in Denmark, and 56.9% in Sweden."

This means less money for health, infastructure, aged care and education. Aged care, in particular, is facing a looming crisis - and already nursing homes are grossly understaffed. What is more - what social services we don't pay for progressively through taxation we end up paying for on a 'flat' basis through user pays charges. Take Citylink for instance. With user pays charges and or Public Private Partnerships, user pays charges consist the effective same as an 'up front, regressive tax' anyway. Also - take the growing proportion of university places provided for now by upfront fees.
Then take public transport - it is estimated in Victoria that it would take $300 million to make public transport free - and thus greatly increase patronage and reduce road congestion. But given the importance of health expenditure and education infrastructure the government just doesn't have this kind of money to spare.

BTW - low tax regimes have led to one of the worst health systems in the developed world in America - and we are slowly but surely heading down the same path.

re: corporate welfare - overall we have space to move on corporate taxation - overall corporate tax should rise - and even with a four per cent increase we would still have lower taxes than the Americans. While some might think this would have a negative effect on investment, there is also the attraction of better quality infrastructure. The BCA wants better infrastructure - it just doesn't want to have to pay for it. Strategic tax credits for some industries and enterprises, however - including R&D concessions - are to the benefit of the Australian economy and can be defended on this basis.