PROBLEM 1: Economy flagging, burdened by more than 120 taxes which cascade throughout the Australian economy and are passed on in prices.

PROBLEM 2: Unaffordable housing, requiring both husband and wife to work and to go into unsustainable debt (with big mortgages).

SOLUTION (TO PROBLEMS 1 and 2): Introduce the reforms of Australia’s Future Tax System (“The Henry Tax Review”) which would abolish 120 taxes and derive more revenue from economic rents (including an all-in land tax to keep a lid on escalating land prices) which, unable to be passed on in prices, would greatly assist Australian productivity.

Which part of this are our politicians unable to understand?

So we are led to believe Prime Minister Tony Abbott’s future depends upon his speech today at the National Press Club in Canberra?

It’s not looking good, because the man is against any form of mining ‘tax’ (rent), or charges on pollution, for heavens sake!  Will he renounce those idiotic positions, too, along with his paid parental leave scheme?

No, his speech will be full of the trivia that often appeals to the press. He will studiously avoid the capture of economic rents instead of all the taxes on productivity that have brought the nation to its knees.

But then Opposition leader Bill Shorten is not within a bull’s roar of addressing the critical issue of tax abolition either.

Political leadership is absent in this country.  Where are the men and women of Australia’s Progressive Era?

RECORD SWING IN QUEENSLAND

The incredible turn-around in voting preferences in Queensland over the last three years, from an enormous vote in favour the Liberal and National Party to a record reversal to Labor yesterday, is typical of the volatility being witnessed around the world in recent times such as also in the recent election in Greece.

Queenslanders obviously didn’t want their public assets to be sold off (or rented) to ‘remedy’ State debt, and the Greeks didn’t like the austerity to which they’ve been shackled to pay off their public debts.   Governments bail out banks and pump-prime the economy, then point to the debt the public is expected to pay before the economy has improved.

There is a common cause underlying all the current volatility.

Most people realise they are being dudded by the political system, but they don’t understand the mechanism that steals from them as it delivers a swag of wealth to the 0.01%.

It’s rotten tax systems: regimes designed by the 0.01% and put into practice by unwitting and often complicit politicians.

Too few people are aware of the damaging role of taxation as they jump from one political party to another in the hope of relief from financial distress, but their hope becomes dashed when no party is willing to tackle the problem at its root seriously.

One hundred years ago, the people of Australia, still suffering from the shocking excesses of the 1880s property bubble, and the economic depression that followed it, decided to set up a federal land tax and to establish a new capital city on the basis of a scheme that, renting its land, would delimit and forestall property speculation.  Today, except for the Henry Tax Review, Australians  are miles away from this sort of insightful realisation. We appear to have retrogressed in our understanding of where we’ve become socially and financially misdirected.

The federal land tax was repealed in the 1950s, and in the 1970s Canberra’s leasehold system was defeated, both by same sort of self-interested disinformation provided by the forces that today claim we need to extend the Goods and Services Tax – just another tax on the people who can least afford it. (The GST was going to put an end to tax avoidance ….. remember?)

Political volatility usually means people feel they are being misled by their politicians and are missing out financially.

They’re quite right, but they can no longer pinpoint disastrous tax regimes as the reason why.

Take a look at these!

Will Rogers on Banking and Wall Street

“I guess there is no two races of people in worse repute with everybody than the international bankers, and the folks that put all those pins in new shirts.” Aug. 26, 1932

“The bankers just got a good cussing by everybody for loaning too much money. Well, they got some awful nice buildings. So when a banker fails, he fails in splendour.” Daily Telegram (DT) #2345, Feb. 7, 1934

“If a bank fails in China, they behead the men at the top of it that was responsible…If we beheaded all of ours that were responsible for bank failures, we wouldn’t have enough people left to bury the heads.” Feb. 6, 1927

“You can’t break a man that don’t borrow; he may not have anything, but Boy! he can look the World in the face and say, “I don’t owe you Birds a nickel.” You will say, (if everyone stops borrowing) what will all the Bankers do? I don’t care what they do. Let ’em go to work, if there is any job any of them could earn a living at. Banking and After-Dinner Speaking are two of the most Non-essential industries we have in this country. I am ready to reform if they are.” WA #14, March 18, 1923

[In a speech to the American Bankers Association convention in New York City!] “You have a wonderful organization. I understand you have ten thousand here. And if you count the ones in the various federal prisons, it brings your total membership up to around thirty thousand.” 1923

“Bankers are likeable rascals. Now that we are all wise to ’em, it’s been shown that they don’t know any more about finances than the rest of us know about our businesses, which has proved to be nothing.” DT #1924, Oct. 4, 1932

“But we can’t alibi all our ills by just knocking the old banker. First he loaned the money, then the people all at once wanted it back, and he didn’t have it. Now he’s got it again, and is afraid to loan it, so the poor devil don’t know what to do.” DT #1833, June 8, 1932

“We never will have any prosperity that is free from speculation till we pass a law that every time a broker or person sells something, he has got to have it sitting there in a bucket, or a bag, or a jug, or a cage, or a rat trap, or something, depending on what it is he is selling. We are continually buying something that we never get from a man that never had it.” DT #1301, Sept. 24, 1930

“Just been talking today out here to all the Senators investigating these stock swindles and overcapitalizations. There has been hundreds of millions lost. There ought to be some form of guardianship for people that buy all this junk. Education won’t do it. (The buyers are) the ones we have educated up till they are just smart enough to fall for everything that comes along.” DT #2270, Nov. 12, 1933

“The whole financial structure of Wall Street seems to have fallen on the mere fact that the Federal Reserve Bank raised the amount of interest from 5 to 6 per cent. Any business that can’t survive a 1 per cent raise must be skating on mighty thin ice… But let Wall Street have a nightmare and the whole country has to help get them back in bed again.” DT #950, Aug. 12, 1929

“It’s no laughing matter being a Republican in these perilous times. Anyone can be a Republican when the stock market is up, but when stocks are selling for no more than they’re worth, I tell you, being a Republican — it’s a sacrifice.” Oct. 14, 1934

“I am not against (bull fighting). Every nation has their own affairs and own sports. Some nations like to see blood, and some like to see their victims suffer from speculation. It’s all in your point of view. They kill the bull very quick. Wall Street lets you live and suffer.” DT #1646, Nov. 1, 1931

“It looks like the financial giants of the world have bungled as much as the diplomats and politicians. This would be a great time in the world for some man to come along that knew something.” DT #1611, Sept. 21, 1931

“Borrowing money on what’s called ‘easy terms,’ is a one-way ticket to the Poor House. If you think it ain’t a Sucker Game, why is your Banker the richest man in your Town? Why is your Bank the biggest and finest building in your Town? Instead of passing Bills to make borrowing easy, if Congress had passed a Bill that no Person could borrow a cent of Money from any other person, they would have gone down in History as committing the greatest bit of Legislation in the World.” WA #14, March 18, 1923

“Why don’t somebody print the truth about our present economic situation? We spent six years of wild buying on credit — everything under the sun, whether we needed it or not — and now we are having to pay for ’em, and we are howling like a pet coon. This would be a great world to dance in if we didn’t have to pay the fiddler.” DT #1224, June 27, 1930

“Prosperity this Winter is going to be enjoyed by everybody that is fortunate enough to get into the poor farm.” DT #1031, Nov. 14, 1929

(On spending money) “We have been just going like a house afire, and we couldn’t see any reason why we shouldn’t keep right on burning. Our tastes were acquired on credit, and we wanted to keep on enjoying ’em on credit.

It wasn’t what we needed then that was hurting us, it was what we was paying for that we had already used up. The country was just buying gasoline for a leaky tank. Everything was going into a gopher hole and you couldn’t see where you was going to get any of it back.

You see in the old days there was mighty few things bought on credit. Your taste had to be in harmony with your income, for it had never been any other way. I think buying autos on credit has driven more folks to (rob banks) as a regular means of livelihood than any other contributing cause… I don’t reckon there has ever been a time in American homes when there was as much junk in ’em as there is today. Even our own old shack has got more junk in it that has never been used, or looked at than a storage place. Most everybody has got more than they used to have, but they haven’t got as much as they thought they ought to have. So it’s all a disappointment more than a catastrophe. If we could just call back the last two or three years and do our buying a little more carefully why we would be O.K.” WA #419, January 4, 1931

“Politics are receiving a lot of attention because we have nothing else to interest us. No nation in the history of the world was ever sitting as pretty. If we want anything, all we have to do is go and buy it on credit. So that leaves us without any economic problem whatever, except perhaps someday to have to pay for them. But we are certainly not thinking about that this early.” DT #660, Sept. 6, 1928

“See where Congress passed a two Billion dollar bill to relieve bankers’ mistakes. You can always count on us helping those who have lost part of their fortune, but our whole history records nary a case where the loan was for the man who had absolutely nothing.” DT #1715, Jan. 22, 1932

“America already holds the record for freak movements. Now we have a new one. It’s called “Restoring Confidence.” Rich men who never had a mission in life outside of watching a stock ticker are working day and night “restoring confidence.” Writers are working night shifts, speakers’ tables are littered up, ministers are preaching statistics, all on “restoring confidence.”

Now I am not unpatriotic, and I want to do my bit, so I hereby offer my services to my President, my country and my friends to do anything, outside of serving on a commission, that I can in this great movement. But you will have to give me some idea of where “confidence” is. And just who you want it restored to.” DT #1035, Nov. 19, 1929

“I have been trying my best to help (the President) and Wall Street “Restore Confidence.” Confidence, is one of the hardest things in the World to get restored once it gets out of bounds. I have helped restore a lot of things in my time, such as cattle back to the home range. Helped to revive interest in National Political Conventions. Even assisted the Democrats in every forlorn pilgrimage, and a host of other worthy charities. But I tell you this “Restoring Confidence” is the toughest drive I ever assisted in. When I took up the work two or three weeks ago, confidence was at a mighty low ebb. Wall Street had gone into one tail spin after another…

I am telling (folks) that the Country as a whole is “Sound,” and that all those who’s heads are solid are bound to get back into the market again. I tell ’em that this Country is bigger than Wall Street, and if they don’t believe it, I show ’em the map.” WA #362, Dec.1, 1929

“When Wall Street took that tail spin, you had to stand in line to get a window to jump out of, and speculators were selling space for bodies in the East River… You know there is nothing that hollers as quick and as loud as a gambler.” DT#1013, Oct. 24, 1929

“Sure must be a great consolation to the poor people who lost their stock in the late crash to know that it has fallen in the hands of Mr. Rockefeller, who will take care of it and see that it has a good home and never be allowed to wander around unprotected again. There is one rule that works in every calamity. Be it pestilence, war or famine, the rich get richer and the poor get poorer. The poor even help arrange it.” DT #1019, Oct. 31, 1929

“Our whole Depression was brought on by gambling, not in the stock market alone but in expanding and borrowing and going in debt, all just to make some money quick.” Radio, May 5, 1935

“Candidates have been telling you that if elected they would ‘pull you from this bog hole of financial misery.’ Now is a good chance to get even with ’em, by electing ’em, just to prove what a liar they are.” DT #1334, Nov.2, 1930

“If you got a dollar, soak it away, put it in a savings bank, bury it, do anything but spend it. Spending when we didn’t have it put us where we are today. Saving when we’ve got it will get us back to where we was before we went cuckoo.” DT #1353, Nov. 24, 1930

“It looks like the financial giants of the world have bungled as much as the diplomats and politicians. This would be a great time in the world for some man to come along that knew something.” DT #1611, Sept. 21, 1931

“Say, this new home building idea of (President) Hoover’s sounds good. They are working out a lot of beneficial things. The only thing is it took ’em so long (2 years) to think of any of ’em. We ought to have plans in case of depression, just like we do in case of fire, ‘Walk, don’t run, to the nearest exit.'” DT #1659, Nov. 16, 1931

“Wall Street is being investigated, but they are not asleep while it’s being done. You see where the Senate took that tax off the sales of stocks, didn’t you? Saved ’em $48,000,000. Now, why don’t somebody investigate the Senate and see who got to them to get that tax removed? That would be a real investigation.” DT #1803, May 4, 1932

“There is two things that can disrupt business in this country. One is war and the other is a meeting of the Federal Reserve (Board).” DT #837, April 2, 1929

From yesterday’s AUSTRALIAN FINANCIAL REVIEW.

From the BRISBANE TIMES:

Queensland members of parliament boast big property portfolio.

The question may fairly be asked:  Is either side of Queensland politics likely to be interested in reducing, or at least keeping a lid on, property prices for young Australians?

MacroBusiness

Real Estate Institute of Australia parasite injects negative gearing poison

AUSTRALIAN FINANCIAL REVIEW 21 January 2015

Tax system ‘infected’ by politics: Justice Richard Edmonds

FLEUR ANDERSON

A Federal Court judge says the tax system has become “infected” by politics and politicians so lacking in “intellectual honesty, integrity and courage” that Australia may never return to the prosperity of its past.

In a scathing critique of past and present federal politicians, eminent tax expert Justice Richard Edmonds said the Abbott government had no “realistic prospect” of taking a structural tax reform policy – that had debated in the community with even a chance of consensus – to the next election.

Despite the Abbott government’s commitment to release a tax white paper before the 2016 election, Justice Edmonds said: “I fear time is now too short”.

Justice Edmonds, who has adjudicated on some of the country’s most high profile court battles, cited warnings by former Treasury secretary Martin Parkinson last year that the tax system had a revenue mix stuck in the 1950s, even after the introduction of the GST and big corporate and income tax cuts.

And the nation had to consider politically unpalatable changes to superannuation, the taxation of the family home, fringe benefits, negative gearing and even broadening not just GST but also income taxes.

But politicians were not interested in tax reform and only embrace tax changes “in their own political interest”, Justice Edmonds told the Australasian Tax Teachers’ Association in Adelaide on Wednesday.

“Changes to the taxation system are so riddled and infected by politics, changes amounting to real tax reform cannot even make it to the table for consideration and discussion, let alone be adopted as policy for implementation,” he said.

“Recent events in relation to the present Government’s budget proposals and the abolition of the carbon and mining taxes illustrate the state of infection.”

He said federal politicians over the past 15 years – which includes the Howard government, the Rudd and Gillard government and the Abbott government – all pursued objectives driven by “political expediency to the exclusion and detriment of the nation’s best interests”.

“In doing so they have all displayed a lack of intellectual honesty, integrity and the courage necessary for strong political leadership,” Justice Edmonds said.

“The most worrying aspect is not that this has happened in the past, but every indication that it is going to continue into the future; and if it does, then the people of this country will never again enjoy the prosperity and consequential well-being that they, and their forebears, have enjoyed in the past, and deserve to enjoy into the future: Europe here we come!”

Over the past eight years, the superannuation system has become “totally skewed” in favour of the wealthy because of the opportunities for tax avoidance, said Justice Edmonds who said he was always amazed at the apparent political consensus on the introduction of the tax-free status of super benefits.

“I dare say that if the ordinary man in the street had any knowledgeable notion of what certain sections of the community were getting away with in this regard, any semblance of consensus would quickly disappear,” he said.

“The whole system of the taxation of superannuation in this country needs to be brought back to the table.”