Don’t Extend Regressive GST

gst_toonMy Lords and Gentlemen, a direct tax of 7% would be a dangerous experiment and one likely to incite revolt. But there is a method whereby you can tax the last rag from the back and the last bite from the mouth without causing a murmur against high taxes, and that is to tax a large number of articles of daily use so indirectly that the people will pay without knowing it. Their grumblings will then be of hard times, but they will not know that the hard times are caused by taxation.   – British Prime Minister William Pitt (1759 – 1806)
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The Goods and Services Tax (GST) is a tax on productivity. Economics should concern itself with the relationship between nature and society. With such a focus, it can be seen that taxes for the use of resources should be used to replace taxes on labour and capital–that is, on productivity–if we are to resurrect prosperity and greater community spirit.

Re-introduction of the federal land tax, or reform of state land taxes, would comply with the principle of taxing our resources and un-taxing product.  It would also help to keep the lid on destructive land booms such as has been experienced in Australia ever since 1997.

Land taxes on economic rent*, that is, the community-created value of our natural resources, would permit Australia to reduce its taxes on employment and wealth creation, reputedly the federal government’s aim. The best federal land tax would be an ‘all in’ tax, with no thresholds or exemptions. The wealthy own more land, and also the most valuable land, while the poor own less land and the least valuable. Rich Australians, and international investors, would pay their fair share under a flat rate land tax – as land cannot be hidden nor flee the country.  Impoverishing poorer Australians, who spend most of their net income, with a GST, is in the long run not even in the interests of Australia’s most wealthy.

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I do not deny that all taxes – with the exception of those on economic rent* and inherited wealth – have some adverse employment and economic growth effects.    – Australian Prime Minister John Howard, Australian Financial Review, 10 December 1991.

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FAVOURITISM IN REZONING EXPOSED

The Guardian

Australian Financial Review

MacroBusiness

See the original research article by Cameron K. Murray and Paul Frijters at http://ftp.iza.org/dp9028.pdf

And hear Cameron Murray interviewed by Karl Fitzgerald on 3CR’s Renegade Economists.

 

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OUTLOOK 2015 – IDEA ECONOMICS

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AT AUSSIE – WE’LL SLAVE YOU

john-symond

 

Lindsay David blogs Aussie John

 

 

 

 

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MOMENTS OF JOY DURING HOUSING DESPAIR

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So we’ve come to this … and it’s a growing lifestyle.

 

Redolent of this plaintive song?

 

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“INSIDERS” USES *THAT* TERM!

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So Andrew ‘Twiggy’ Forrest of Fortescue Metals wants an inquiry into why Big Miners such as Rio Tinto and BHP Billiton are selling iron ore so readily at these currently depressed prices.

Is it to get rid of the smaller players, such as Fortescue, he asks?

Let’s have an inquiry then, says Prime Minister Tony Abbott.

Let’s not, say the Big Miners.

OK, let’s not, says the Prime Minister.

That’s redolent of the necessary RSPT mining tax morphing into the worthless MRRT mining tax in a backroom deal with former Prime Minister Julia Gillard, isn’t it?

Er, so who’s running this country, guys? It certainly doesn’t look like it’s our prime ministers!

But wasn’t that you standing up on the back of a flatbed truck with another mining billionaire, Gina Rinehart, crying poormouth, Twiggy?

Anyway, it was very heartening seeing Katharine Murphy on the ABC’s “Insiders” this morning using the correct term for miners trying to retain their super-profits in the exploitation of OUR natural resources – she used the term “rent-seeking”.

But the show’s host, Barrie Cassidy–using the same term for the first time?–suggested that it’s not just the big boys, but the third party seeking relief (Fortescue) which is also a “rent-seeker”.

Correct, Barrie!

Now maybe “Insiders” will continue putting the finger on ALL of Australia’s rent-seekers, if they wish to analyse properly why the economy is collapsing into a heap?
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TAX AVOIDANCE LAWS LACK TEETH ….

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…. and looking at the comments on this article in The Conversation (especially Terry Dwyer’s), seems many Australians agree.

 

 

 

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CONGRATS, PROSPER OZ!

The ‘risky’ property tax grab grows faster than GST, income tax

http://www.afr.com/real-estate/residential/the-risky-property-tax-grab-grows-faster-than-gst-income-tax-20150520-gh5cwb

Pay-walled, unfortunately, but here’s a grab:

Almost all analysis, most recently from the Commonwealth Treasury and the South Australian Government identified stamp duty as one of the least efficient taxes, a drag on economic performance, and restriction on real estate supply.

The South Australian Tax Review discussion paper, suggested stamp duty on real estate be replaced by a broad based, no exemption, land tax.

The proposal drew support from Prosper Australia, a non-government organisation “inspired by economic justice. Policy Director David Collyer says stamp duty is a “vile” instrument. “It traps people in and out of housing and is a handbrake on economic activity”.

But land tax in its current form is not the answer. The South Australian review found that land tax was “less efficient than it could be” because it does not apply to all uses of land.

“The Government recognises that taxes on land have the potential to be a very efficient source of revenue if they operate with no (or very few) exemptions” , the report concluded.

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HOW BANKING ECONOMISTS MAKE THEMSELVES LOOK SILLY

http://news.domain.com.au/domain/real-estate-news/housing-bubble-claims-sensationalist-with-no-pop-in-sight-20150519-gh4s9t.html

National Bank of Australia chief economist Alan Oster says “no bubble exists in Sydney or Melbourne ….. traditionally you’d expect to see the ability to borrow against the house price would be historically high, you’d expect to see very fast growth in credit funding it.”

 Yes, you would, wouldn’t you? As below, perhaps?

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[Hat-tip to LF Economics!]

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TELLING CHARTS

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