Suze, I hate doom and gloom, but do you honestly think we are in good shape?

It wasn't that long ago that you worked hard to better yourself, whereas now you work had to make life better or easier for someone else. Or, to support Rudds illegals.

As for the transaction tax, there is no reason B2B transaction can't be taxed at very small rates. Same goes for trades.

The trouble is that if we don't find a suitable tax system to replace the broken outdated one we have, doom will be closer than many think.

The first thing that a transaction tax would generate would be barter trading.
Only the profit would be deposited, not the whole receipted funds.

Shockadelic,
Cash is one way to avoid bank transactions. Offshoring is another. And a third way is simply to not make the transaction.

"Who is going to take the risk of storing all their wealth as cash (encouraging robbery)?"
Probably very few people, but a lot more people would take the risk of storing a lot more of their wealth as cash. And many people would store their wealth in foreign bank accounts.

"You could also legislate that certain transactions (e.g. any amount over $100) *must* be done electronically, making significant avoidance impossible."
An unwarranted restriction on our freedom, but easily dodged by splitting big transactions into multiple smaller ones.

"The tax would not be an "extra" 2% if it replaces ALL other taxes."
OK, there are some state taxes that are costs of doing business. So maybe an extra 1.9%, though of course it's a moot point because a 2% transactions tax wouldn't bring in anywhere near as much revenue as you think it would.

"Our economy and standard of living did more than fine under tariffs."
Despite them, not because of them.

"If our young nation had grown up under free trade, we wouldn't have the standard of living/development we have."
We'd probably have higher standards of living and development, though of course it'd depend on what other economic policies there had been. But can you think of any industry we now have that's still here because of the tariffs of the past?

"It's only because of those founding years under protectionism and imperial preference that we are so far ahead of Asia."
No, it's because of our better education and more automation.

Japan's success was more the result of being an early adopter of container shipping than anything to do with tariffs. Global free trade is an economic objective; nothing to do with religion. And we're far more productive than "third world level" so why do you assume that our living standards would fall so much?

ehctub,
"As for the transaction tax, there is no reason B2B transaction can't be taxed at very small rates. Same goes for trades."
It'd still be an extra cost on business, and at very small rates it couldn't raise sufficient revenue even in theory.

What do you think is broken and outdated about the tax system we have?

What do you think is broken and outdated about the tax system we have?

Firstly, the GST is only paid by the end user, as the majority of businesses get their tax back. This is very unfair as many of the end users have already paid income tax, so are in effect paying tax on their spending with after tax dollars.

The other issue is that of taxes paid by business as they then claim it back.which leaves the system wide open to avoidance.

A TTtaxes money nit earnings and considering the same $100 is spent over and over again, a small TT will collect tax every time, including for the likes of off shore accounts and profit sharing. It should also open the way for changes to negative gearing.

By taxing people's money by just 2% would mean hundreds of dollars extra for most to spend n a weekly basis.

However, as I have soften said, why not use a natural disaster to test the water on a finavia, transaction tax, as a tax of just 0.5% could be colleges, used for this type of on off funding and would not break the bank for most. However, if you truly believe our current tax system is not collapsing then you're on a different planet to me so it's pointless debating it.

"Offshoring is another.""store their wealth in foreign bank accounts."

That is a choice that can be made under *any* tax system.

You still need to make an Australian transaction whenever you want to buy/sell something *here*, which is *most* personal and business transactions.
You will also pay a currency conversion bank fee (commonly 3%!)
You can't order your groceries from Taiwan, rent a DVD from Japan or fill your fuel tank in Hong Kong.

"An unwarranted restriction on our freedom"

Pur-lease.
All taxation is a "restriction on freedom".
Grow up.

"some state taxes that are costs of doing business."

I believe the proposal was the transaction tax would replace ALL taxes, including company and income tax.

"splitting big transactions into multiple smaller ones."

A headache.
And only when possible or the avoidance offsets any disadvantage (e.g. you can often get free shipping with large orders but not small ones).

"2% transactions tax wouldn't bring in anywhere near as much revenue as you think it would"

Millions are transacted on the stock exchange every day.
And only capital *gains* are currently taxed.

Same with million dollar real estate sales.
Try legally splitting that house into smaller bits (or buying an Australian home from Singapore!).

"nothing to do with religion"

I said it *is* a religion.
And you are speaking in tongues.