Shadow,

>The left whinge answer to everything is to raise taxes.
No it isn't. But because the left want better services, they are generally more willing t put up with higher taxes, particularly in the short term.

>That this actually further depresses economic activity seems to elude them.
When considered in isolation it depresses economic activity. However, it is not the only factor to do so. Raising interest rates depresses economic activity, as does cutting spending. Conversely, increasing spending increases economic activity, as does cutting interest rates.

Do you get it yet? I know it's counterintuitive, but the actions that increase economic activity aren't always the ones that are best for the economy. Sometimes, in order to control inflation, measures that depress economic activity are actually better.

>The answer is to reduce corporate tax to normal international levels.
Then you must be asking the wrong question, because it would bring in a lot less revenue but the benefits would be small. Don't forget that Australia has dividend imputation; most countries don't.

Interesting question.

only time will tell as many powerful nations will probably have to begin trend before little old Australia does anything.

This was case after 1945 when majority of nations began to increase tax intake, thus Australia then followed lead.

In a globalised world, however, need to compete will long demand competitive tax rates.

Next ten years will be interesting.

Aidan,

I am more than acquainted with the economic principles. The problem with tax and spend is that it pushes out businesses. The high taxing and spending Scandinavian countries had to ramp down taxes and spending when their economies floundered.

Left whingers want to raise taxes and spend other people's' money. The problem is that in the global age money and people are mobile. Taxes in Aus are already high and take a lot of money out of the economy. Most OECD countries company tax rates are closer to 20% which means that their businesses keep more of their profits and share holders get more dividends. That is why Singapore with a company tax rate of 12% is booming.

As for the dividend imputation, it only fully benefits those earning less than $19000p.a. Between $19000p.a. and $37000 p.a. the additional savings is 11%. So it is primarily aimed at retirees whose votes put Labor in opposition for another 3 years.