h/t: cross-posted from LinkedIn (because Dr Terry Dwyer makes sense!)
National Tax Director at Nexia Australia
Once again, the OECD recommends that Australia adopt “growth-enhancing tax reforms”, including rebalancing the tax mix away from personal income tax to GST (with appropriate shielding). So many experts, with so much evidence, say this over and over, and yet we still have so many politicians who are the tax-reform equivalent of anti-vaxxers. Google “oecd economic surveys australia september 2021”
The Treasury uses the OECD to lobby politically and put pressure on the government of the day, so take cum grano salis.
Second, OECD tax burden comparisons are worthless, since superannuation and workers comp in our systems are taxes in many European systems.
Third, Y = C + S, so a GST increase is equivalent to a flat rate income tax which exempts savings. Try selling a flat rate income tax of 10% with no tax free threshold, an exemption for foreign landholders not spending here and an unlimited super tax deduction… same thing pretty much.
Fourth, another twist. Consumption is mismeasured. A farmer gets write-offs for sheds for his pigs, a father and mother get no deduction for raising children to replace them as labourers. Yet labour is a factor of production as much as capital. Adam Smith understood this which was why he opposed taxes which would diminish the future supply of useful labour. So did Manchester merchants who wanted the Corn Laws ended.
I trust this does not mean I am regarded as the economic equivalent of an “anti-vaxxer”. If so, dump me in with Adam Smith, JS Mill, Henry George, Harold Hotelling, William Vickrey and a few more economists.