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.