A FLAT RATE OF TAX IS THE ANSWER
... but who’s game to ask the question?
Four-time Walkley Award winning political commentator and Churchill Fellow, has returned to the fray over concern that the integrity of news dissemination is continually being threatened by a partisan media.
Australia has one of the highest and most convoluted tax regimes in the world and each time politicians attempt to reform it, it becomes even more abstruse and outrageously costly to administer. In the late 60s, Doug Anthony, a one-time leader of the Country Party (now the Nats) came up with a solution: A flat rate of tax at 25c in the dollar.
What a great idea (one would have thought). Whatever anyone earns, be they individuals or companies, they simply pay 25% of profits or pay packets to the Government. No arguments, no deductions, no GST, no mining taxes, no wealth taxes, no employment-inhibiting payroll tax, no lawyers, fewer accountants and no need for tax havens or an amorphous ATO.
In fact the Federal and State Public Service could be halved... but the ensuing massive growth in the private sector would ensure productive employment for all, even Public Servants could learn to be productive. Current myriad forms of tax are mostly lost in administrative costs.
Total Government taxation revenue in 2012–13, as a proportion of GDP, was 27%, with the Commonwealth receiving 22%, State Governments 4% and Local Government 1%.
Per capita taxation in the same period was $18,108, an increase of 5% from the previous year and certain to soar further with bracket creep.
Right now there is no incentive for a productive employee to work longer hours because it pushes him/her into a higher tax bracket.
A flat rate of tax will lure a workforce to greater productivity while rendering the non-productive administrative sector redundant.
In the same 2012-13 period ABS figures cite total taxation revenue collected in Australia had increased 6% to $25,227m, taxes on income increased 5% to $10,886m while taxes on property increased 7% to $2,419m and taxes on provision of goods and services increased 3% to $2,877m.
In the same year, taxes on income represented 58% of total taxation revenue for all levels of government and taxes on goods and services, including the GST, represented 23% with some taxes usurped by 60% in administration costs.
With debt and deficits reaching chronic levels, a 25% flat rate of tax appears a no brainer, not for what it would raise but for what it would save.
A semi-trailer could deliver the Tax ACT to the nearest tip and Governments would be flush with funds for their pet social experiments.
With one third of the total Federal budget spend going to welfare ($150 billion) and almost a million malingerers claiming some sort of disability at the expense of the genuinely disabled, ballooning baby boomer pensioners living to 110 via an unsustainable Medicare system and recalcitrant Senates that refuse to allow a government to govern, something has to give.
Our taxation regime will never be reformed by simply fiddling at the edges with more white papers. It needs a complete overhaul and a rethink.
Of course it’s a waste of time even suggesting a flat rate of tax... governments thrive on circuitous wastage and bloated PS departments to administer their excesses.
A flat rate of tax breeds confidence, attracts foreign investment and allows both the taxpaying employee and the multinational to plan for the future in a vibrant predicable economy.
Bill Shorton’s Left is determined to bash the top end of town only, but the top end will simply move elsewhere (quite legally) leaving a gaping unemployment hole adding to the welfare bill.
There are too few workers and too many loafers taking advantage of 55 separate forms of social welfare that cannot be sustained on an entrenched and broken tax system.
Don’t know why I even bothered writing this piece because governments will always remain addicted to convoluted systems of raising revenue supported by an unintelligibly chaotic Tax Act and a devious ATO.
Oh well, sorry to have wasted your time.