There are some economists talking about the benefits of reintroducing the carbon tax, as opposed to increasing the GST, as they claim it will generate just as much income for the government, if not more and, that it would be less of am impost on families. I beg to differ.

The fundamental difference between the two (my opinion) is that while the GST is a tax collected by business, passed on to the government, it has no effect on business cash flow, in fact, it can even be used as short term funding, albeit, dangerously, while the Carbon tax is a direct cost associated with doing business, and like any costs in business, they must be funded from cash flow.

So if a business were to be forced to find additional funds, these funds generate the likes of funding costs, and lost opportunities, all of which have to be taken into account when setting ones prices, as unlike governments, who usually work on a 'cost recovery basis', business must make a profit.

So the end result of a carbon tax is that prices will increase, as all costs to business are passed on, and usually at a rate higher than the in-costs as margins are usually applied.

I still think we should have some modelling done on a financial transaction tax, both on spending, at one rate, and trades etc. at a much lesser rate before making any changes to existing taxes as this would most certainly be innovated tax reform, which is what both sides are banging on about.

GST or Transaction tax is there a difference, or just a name change. At the moment GST is virtually guaranteed because what is being taxed is everyday wants or needs. And buying in bulk does not affect the amount of tax collected. That is a danger of a transaction tax.

A transaction could be multimillion $ amounts, Or an annuall amount, depends on what you were transacting. I think it would be a mega job in keeping up with tax dodgers. The only ones you have to watch at the moment is the GST collectors.

Raising the GST is a soft target, it should only be considered after other avenues have been exhausted.

The price on Carbon should never have been backed out, it proved nothing and we are still waiting for the benefits of not having it. It was a 6 billion gift to Australia’s biggest polluters, and our bottom line was 6 billion $ worse off

Neither a rise in the GST nor rises in any taxes would be necessary if stupid governments cut spending. As for a new carbon tax, well that just highlights the lie that a carbon tax would have 'fixed' climate change. It proves that the whole thing was just a money-maker as we thought. Memories are not as short as the political galahs think.

Doog, the only ones who pay the GST are those who have either already paid income tax, and those who don't earn enough to pay tax, as businesses claim their GST back.

A TT collects a very small tax on every bank transaction so it taxes money not spending and there are no exemptions as even those who place their profits in off shore accounts pay the TT when they transfer their money.

Sure the cash economy will increase, but very marginally in the big picture.

The tax on trading called the "Robin hood tax" is a great way to raise money for important issues and only effects the rich end of town.
Surely this would be a better option than raising GST?
But then it is not in the Liberal ideology where it is better to tax the middle and lower class earners so that the big end of town can continue to make big bucks and then spend some on buying liberal pollies while salting the rest in offshore tax havens.

Butch ; How much is a transaction.
TTb
Where would you like to start on cutting expenses. We need more money into Education, health care and every other thing our govt; finances. It’s easy to say cut expenses, We do not have the population to bring in the sort of money that is needed. Govt’s use cutting taxes as a handout, wouldn’t it be better to leave taxes as is.
Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000
The above rates do not include the:
• Medicare levy of 2%
• Temporary Budget Repair Levy; this levy is payable at a rate of 2% for taxable incomes over $180,000.

Grattan Institute chief executive John Daley said the state figures hid the extent of their “precarious” fiscal position, which was weighed down by record capital expenditure and high debt levels.
• Propped up by booming property markets that are driving state transaction tax revenues, NSW, Queensland and Victoria account for more than $20bn of the combined surpluses over the next four years. Over the same four years, the federal government will post cumulative deficits of $82.2bn.

Doog, I.
've seen suggestions from 0.2% up to 2%, so I can't really say, but I do think that if everything is on the table, as we have been told, then why I this tax not being modelled.

Doog said;
We need more money into Education, health care and every other thing our govt; finances.

That statement on its own illustrates our problem.
People just do not understand that "more" is now an obsolete word.
There is just not going to be any "more".
The new "more" word is "less".

Such is life, sigh, When will they learn ?
No matter, no need for me to try and convince them, "more" will just
not happen despite how the polies pontificate.

Bazz you are so right as even now the pollies are talking up the economy, knowing full well a train wreck is on the way by way if the closure of our car industries and their support industries. While the dream of diversifying, they are lust that, dreams. A mate of mine builds rocket launchers for boats at $3800 a pop. Better quality is now coming in from Taiwan at $1800, and the importer sells for $3500, so he is still creating jobs, just not here and they earn five dollars a day and do a far better job of finishing.

My mate says that his guys wont go to that level of polishing and presentation.

Just look at cabinet makers, almost all now import kitchens in flat pack form. Another lost trade to excessive wage demands.

So long as taxation is needed, a tax on non-renewable energy is quite reasonable.

But so long as they name it against this poor and benevolent molecule, CO2, which they pay scientists to denounce, I will not support it.

A GST on the other hand, is purely the theft of our after-tax savings.

There are cabinet makers and there are box makers. There are countries with $1.50 / day wages. None of which Australia can compete with. As long as Australian’s favor buying cheap imports, it will not matter what sort of wages are paid in Australia.

It’s a world of free trade, so we have to have the right policies to compensate with cheap imports. China is fast outgrowing its cheap exports, Mega factories are now being built in Thailand, as their labour is cheaper than China. Thailand is now assembling cars for the world market.

Turnbull said we have to govern for a high wage earning Australia. Cheap imports are not going to stop anytime soon, and people are not going to stop buying those items either.

Turnbull is not game enough to stimulate our economy, although he knows that is what is needed. He still has Abbott worshippers in his back benchers. Twelve months before the next election, maybe the voters can dismiss some of the Conservative backbenchers from the ranks of the Liberal party.

A tax on Carbon is definitely the right way to go, That should be mandatory to any tax reform. It was a stupid act to discontinue the system that was in place. By now that system should have been extended, and built upon. While the carbon tax was there they were buying carbon credits with the proceeds which they are now claiming as Co2 deductions.

The super profits tax was another example of dismantling something that was designed to come into force in times of high output and over the top profits, But Abbott in his wisdom saw fit to diminish a scheme that did not earn any money at the time. You could say his efforts at governing were against Australia’s best interests. Especially with nothing to replace income with.

Abbott even let small business of another 1% , that would have meant nothing to a business compared to what Australia got out of it as a whole. So much for a radical govt;

We are now scrambling around to find something to tax.

Doog:
First, cheap inputs will decline as the global economy declines.
Large items for their cost will go first. Furniture has largely changed
to local manufacture, except for flat pack furniture.
The cost of intercontinental shipping has been increasing.
Doog added:Turnbull is not game enough to stimulate our economy,

You have here touched on the BIG debate between economists;
Why do low interest rates, high interest rates, austerity & stimulus by money printing all fail ?

When politicians understand that then we might get somewhere.
Fiddling around with taxation like we have seen is not the answer.
We must implement a sustainable, zero growth economy.
That will require both a lower expenditure and a lower tax system.
If we do not do this the economy will collapse is a not very happy way.

What coal & oil sources we have should be devoted to building a new
energy system. The SA proposal for spent fuel rod storage can provide
the finance to build power stations that provide power as well as
degrade the returned fuel rods to a lower half life while generating electricity.
The beauty of it is we won't have to spend a cracker other countries
will jump at the opportunity to pay for our construction costs and
pay us to do it.

We've had a transactions tax in the past - two in fact.

The Financial Institutions Duty was levied on bank deposits.
The Bank Accounts Debit tax was levied on withdrawal. It was called the BAD tax for a reason.

Both were discontinued as part of the GST compensation because they were inefficient and a drain on economic activity.

So why resurrect something that's been tried and rejected.

rehctub, which economists were talking about a carbon tax versus increased GST and where was this reported? Before entering into a discussion on the merits, or otherwise, of this it would be useful to see what those who proposed it had to say.