David Leyonhjelm on the morality of taxation

Last week I had planned to ask the nice people at the AFR to accompany my column with a chart showing the income tax paid under current law, income tax paid from July if the Coalition’s budget plan is passed, and income tax paid from July next year if Labor’s additional tax cut is passed. However, it turns out that the differences between these amounts are so miniscule you would need a magnifying glass to identify them. So I’ll tell you the numbers instead.

For instance, if your income is $120,000, right now you have to pay $34,432 in income tax including Medicare levy. Under the Coalition’s budget plan you’ll pay $34,217 next year, and under Labor’s plan for the following year you’ll pay $34,157.

But the story here is not just the paltry difference between the plans of the major parties. The story is also how much income tax we expect high income earners to pay.

Do those earning $120,000 receive $34,000 worth of value from the federal government? Are the subsidies for child care, schooling, healthcare and opera tickets worth that much? Or do they receive $34,000 worth of roads, defence force services, courts and public broadcasting?

The answer is no; the value someone earning $120,000 gets from the federal government is a tiny fraction of the tax paid. This is a violation of the benefit principle of taxation; that your tax should reflect the value you get from government.

The principle is based on the idea that government should provide services that a taxpayer wants but cannot obtain from the private sector. It is the moral foundation for the formation of government and for taxation, just as voluntary payment for services is the moral underpinning for the private sector.

The tax system that would best reflect the benefit principle of taxation would be a poll tax, where each person pays the same dollar amount of tax to reflect the fact that we all receive the same value from government services such as national defence and the justice system. A proportional tax system, where someone with double the income pays double the tax, violates the benefit principle because that person does not get double the value from government. And a progressive tax system, where someone with double the income pays more than double the tax, is a further violation.

There is pragmatism in taxing richer people more — after all, that’s where the money is — and poll taxes are impractical. But let’s not pretend there is anything moral about pursuing the pragmatic course. Taking $34,000 from someone earning $120,000 and providing relatively few services in return satisfies no moral principle.

The ‘ability to pay principle’ is no principle at all. It is a euphemism for ‘take what you can get’ and ‘might is right’.

Some claim that high taxation of the rich is moral as it allows redistribution to the poor. But the moral case for forced redistribution is shaky. Robin Hood and Ned Kelly, who robbed the rich and gave to the poor, are popular figures because of the injustice of their times. But modern Australia is a fundamentally just place, where the rule of law reigns, wealth is earned, and destitution is rare.

The high taxation of the rich is not justified by the willingness of some rich people to pay high taxes either, because these people are free to donate to causes they believe in, whereas tax is compulsory and applies to all.

Quite a lot of what is taken for redistributive purposes is lost on administration costs, while much more goes to those on middle incomes instead of the poorest. And taking hard-earned money from people reduces their donations to charities, whose services are often more personal, tailored and effective than state-provided cash.

Libertarians like me are not opposed to welfare for citizens in genuine need, but we object to taxes to fund middle class welfare and the motley array of government spending programs that serve no legitimate purpose.

If we cut such spending we could have a $40,000 tax free threshold with a 20 per cent flat tax rate thereafter. For someone earning $120,000 this would mean they paid $16,000 of income tax, still more than the value they receive from government but less than half the tax burden imposed by the major parties. It’s not as if the government is spending our money so well that we should be paying any more.

David Leyonhjelm is a Senator for the Liberal Democrats

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52 Responses to David Leyonhjelm on the morality of taxation

  1. 2dogs

    The tax system that would best reflect the benefit principle of taxation would be a poll tax

    Georgists argue, quite effectively, that the benefit principle is best met by land taxation. The provision of government benefits increases the desirability of living where they are provided and hence land values.

    Consider the city vs the rural resident on this point. They receive fewer government services in the bush, so less benefit, and their land value is lower. A poll tax would make them pay the same; land taxes would be less for the one receiving less benefit.

  2. Tim Neilson

    Robin Hood robbed from an unfairly and illegitimately high taxing government and gave back to the productive citizens from whom that government had stolen.

    He didn’t steal from anyone just because they were rich. “Neither harm ye knight nor squire that will be good fellow” one of the earliest versions of the story has him saying.

    Australia could actually do with an infusion of the genuine Robin Hood mentality.

  3. Farmer Gez

    is best met by land tax

    You may have overlooked rates there 2dogs. We’re paying $50,000. That’s enough land tax for rural person to pay beside the fact that rural town rates are higher for a given house value than city properties. Stop trying to help please.

  4. Dr Fred Lenin

    It’s not the tax it’s what they spend it on. Bet the senators done a lot of pork barreling to save his little “career” . One term is enough for anyone might be too long for some .

  5. John Barr

    I would like to see a tax rate of 10% on Gross Earnings from all streams, including Safe Havens & Overseas Earnings That are transferred by any means back to Australia.. No Deductions for anything what-so-ever.

  6. jeremy

    Best and most sensible article on tax I have seen for ages.
    The devil of course, is in the necessary cutting of the Public Service.
    Hellishly hard to do.

  7. Colonel Crispin Burqa, Kings' Fusiliers Corps.

    I’ll take this opportunity to troll uh I mean play devil’s advocate, in the hope I can flush out a sensible counter-argument from the Cats. Imagine the following as a liberty quote…

    It is beyond the scope of catallactics to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents taxes and subsidies. It has merely to stress the point that this is a problem of the delimitation of property rights social responsibilities and that with the abolition of patents and copyrights taxes and subsidies authors and inventors soldiers, firemen, professors, judges, and road crews would for the most part be producers of external economies.
    – Ludwig von Mises, Human Action Part 4.

    The point I’m making is the point that Jordan B Peterson has been making for several years. There is no point in considering individual rights without considering individual responsibilities. Proudhon was almost right in the sense that, although property is not theft, when you grant a right of exclusive access for one person you are preventing everyone else from using it. The personal right is inseparable from the social responsibility. For example, this is why patent holders are required to license the use of the protected work under fair terms, and not just withhold benefits from the market.

    Good old Uncle Ludwig rants on and on about how terrible taxes and subsidies are, despite taxes and subsidies simply being methods of internalising external economies. But when the topic of patents arises, which as Mises admits above are also clearly other methods of internalising external economies, he completely dodges the whole issue and claims his theory of catallactics does not need to address it.
    What a punk! Catallactics has no worries using patents to internalise externalities to encourage the world towards a better condition, but is opposed to using taxes to internalise externalities to encourage the world towards a better condition. It’s a total double standard.

    I say you can’t throw out taxes while keeping patents, they are both non-market interventions to internalise external economies and with generally good effect. Okay, over to you, tell me how this is not a double standard.

  8. max

    “The best tax is always the lightest.” ~ Jean-Baptiste Say

    Egypt was a tyranny. It was the most oppressive and extensive tyranny of its day.
    The tax rate was 20%. Genesis 47:23-26

    The Bible is clear: God demands in the form of a tithe 10%
    Leviticus 27:30

    Accounts Receivable Tax
    Building Permit Tax
    CDL License Tax
    Cigarette Tax
    Corporate Income Tax
    Dog License Tax
    Federal Income Tax
    Federal Unemployment Tax (FUTA)
    Fishing License Tax
    Food License Tax
    Fuel Permit Tax
    Gasoline Tax
    Hunting License Tax
    Inheritance Tax
    Inventory Tax
    IRS Interest Charges (tax on top of tax),
    IRS Penalties (tax on top of tax),
    Liquor Tax
    Luxury Tax
    Marriage License Tax
    Medicare Tax
    Property Tax
    Real Estate Tax
    Service charge taxes
    Social Security Tax
    Road Usage Tax (Truckers)
    Sales Taxes
    Recreational Vehicle Tax
    State Income Tax
    State Unemployment Tax (SUTA)
    Telephone Federal Excise Tax
    Telephone Federal Universal Service Fee Tax
    Telephone Federal, State and Local Surcharge Tax
    Telephone Minimum Usage Surcharge Tax
    Telephone Recurring and Non-recurring Charges Tax,
    Telephone State and Local Tax
    Telephone Usage Charge Tax
    Utility Tax
    Vehicle License Registration Tax
    Vehicle Sales Tax
    Watercraft Registration Tax
    Well Permit Tax
    Workers Compensation Tax

    https://www.garynorth.com/public/3119.cfm

  9. AH

    You can make a stronger and simpler argument against taxation without invoking the unfairness borne by high income earners.

    Government expenditure always brings less benefit than private expenditure. This is due to the inherit information costs of central planning. Aside from that there’s the pork barreling, but you don’t even have to count that.

    Therefore, because public expenditure is always more wasteful than private expenditure, the least amount of public expenditure will lead to the greatest benefit.

    People may counter argue that if control over money is retained by the people who earn the money then the benefits of that money will only be seen by those people, and coercive redistribution is necessary in order to give low income earners a chance at a good life. This argument can easily be overcome by observing that people who have money and wastefully spend it will no longer have money. Therefore, in order for private individuals to maintain any monetary advantage they will need to invest their capital for a return. In a free society, investments bring a return if they bring a benefit to other people, for example, providing goods or services that other people will willingly exchange money for. If an investor makes a bad decision, he will suffer loss of his capital and it will end up in the hands of another investor, who either invests wisely or sees his money again be passed on to another who can invest better than he. In this way, money accumulates in the hands of wise investors who are best able to judge what goods and services will be most attractive, giving them greater capacity to do greater good. A virtuous cycle leading to an increase in living standards for all.

  10. Boris

    Government expenditure always brings less benefit than private expenditure. This is due to the inherit information costs of central planning.

    But not everything can be done by the market. Markets need a functioning court system for example. Taxes are a necessary evil even before welfare

  11. 2dogs

    You may have overlooked rates there 2dogs. We’re paying $50,000. That’s enough land tax for rural person to pay beside the fact that rural town rates are higher for a given house value than city properties.

    A Georgist would actually agree with your complaint there. The differing cents in the dollar between localities (and the presence of other taxes) means that council rates break the benefit principle.

  12. Terry

    “But not everything can be done by the market. Markets need a functioning court system for example. Taxes are a necessary evil even before welfare”

    Well yes, of course.

    Is anyone advocating for no taxation and no government at all? (Anarchy?)

    Giving a small child with a fever a small dose of paracetamol can save its life (very necessary).

    Giving it the whole bottle might lead to a slightly less desirable outcome (death?).

    More is not necessarily better, whether it be government, taxation or medicine.

    Any idiot can tax an economy to death and call themselves “Dear Leader”.

  13. We need more men of sound principle like this with a yen to pump out the ACT septic tank.

  14. Troy Nelson

    Taxation is theft. When he has the balls to state that basic fact then I’ll vote for him.

  15. manalive

    Imposition of tax is an amoral (not immoral) exercise at least within the Christian tradition, after all the apostle Matthew was a tax collector and the fact that Jesus consorted with ‘tax-collectors and sinners’ was an example of Christian acceptance and forgiveness.
    Hobbes’ ‘social contract’ doesn’t apply because if you don’t pay the taxes demanded you go to gaol and a contract implies voluntary acceptance of the conditions, although I guess it could be argued that merely by living in a society you accept the tax laws.
    ‘Enlightened self-interest’ also implies voluntarism.
    In this world ‘nothing can be said to be certain, except death and taxes’, I think it comes back to Mill’s eternal struggle between authority and individual liberty:

    … The aim, therefore, of patriots, was to set limits to the power which the ruler should be suffered to exercise over the community; and this limitation was what they meant by liberty.

  16. duncanm

    Take that last paragraph — remove the rest — and push it hard.

    That’s all the voters need, or want, to know.

    The numbers are genuinely surprising.

  17. Harry

    Thank you, Senator, and commenters. A true, very good, very reasoned and excellently evidenced argument for optimum minimum taxation. And cutting government expenditure. Savagely.
    Now, how do we give this vital information to the people who vote to steal from not just the rich (progressive taxation), but because of their ignorance, from themselves too (indirect taxation)!
    C’mon, Malcolm, pull on your big boy pants, grow a pair, man up! Immediately cut all non-defence expenditure budgets by 5%, each year for the next 10 years. Freeze all government hiring and let natural attrition ease the burden on the Australian citizen.
    That’s a start.
    Get on with it.

  18. Garry

    The only way to cut reliance on welfare is to only allow those who pay net tax to vote. This would remove much of the political clout from the welfare lobby and pragmatic politicians always follow the vote!

  19. Percy Popinjay

    Over a recent 14 month period I paid $97,000 in taxes over and above income tax. Two CGT slugs and a massive stamp duty bill on a house purchase. As I mentioned to several people at the Friedo shindig last week, that wouldn’t keep an unemployable moozley, his two wives and their nine kiddies in welfare for even six months. It would also take me about 10 years to save that amount net.

    As far as I’m concerned, 97% of taxation is criminal extortion and the mongrels perpetrating this gangsterism deserve to be executed en masse – pour encourager les autres.

  20. John

    What would somebody who doesn’t practice God’s teaching know about morality? http://archive.fatima.org/essentials/requests/examconc.asp

  21. Iampeter

    The principle is based on the idea that government should provide services that a taxpayer wants but cannot obtain from the private sector. It is the moral foundation for the formation of government and for taxation, just as voluntary payment for services is the moral underpinning for the private sector.

    Yes but WHAT are those services that a government should provide? I think the first thing to do before deciding HOW to pay for the government is to actually define what you think a government is and why. This requires a lot more understanding of the philosophical principles that come way before politics.

    In brief, using our minds we can figure out that human beings are individuals that have to individually think and act for the purpose of living their lives. The only thing that can stop a human from thinking and acting is another human using force or fraud against them. So, if humans are going to live among humans they need to institute an organization that will protect them from force and that organization is called “The Government”. In practice what that looks like is the courts, police and armed forces. It’s a monopoly on force.

    Now that we know WHAT a government is, we can work out HOW to fund it. Since we’re establishing a government to protect rights, taxes which are a rights violation, are out. All forms of taxes are out. Instead such a government would largely pay for itself via the courts and any profits would go into the military. Any additional funds that are required would then need to be raised via legitimate, non-rights violating means, just like any non-profit.

    So I think the discussion needs to focus a lot more on estabilishing a clear understanding of the very basics before jumping into this or that tax system discussion since most people don’t have any understanding of the entry-level stuff.

  22. MichelLasouris

    Who does Leyonhjelm think is going to pay for the OAP, the ADF etc.etc? The Labor money tree orchard?

  23. tgs

    Government is like fire, a dangerous servant and a fearful master.

  24. Natural Instinct

    we could have a $40,000 tax free threshold

    Although I understand the administrative efficiency argument for letting lots of tiddlers slip through the net, the problem is that those tiddlers then have “no skin in the game”.
    Even a low income earner who sees 5% of their income be taken in tax then wants to curtail waste and be involved.

  25. Roger

    The only way to cut reliance on welfare is to only allow those who pay net tax to vote. This would remove much of the political clout from the welfare lobby and pragmatic politicians always follow the vote!

    The new revolutionary slogan:

    No representation without taxation!

  26. Eyrie

    “just as voluntary payment for services is the moral underpinning for the private sector.”
    Yeah but that isn’t done with a gun to your head.
    Recognise that government and taxation is inherently evil. A small amount may be a necessary evil but evil, nonetheless.

  27. Snoopy

    Libertarians like me are not opposed to welfare for citizens in genuine need, but we object to taxes to fund middle class welfare and the motley array of government spending programs that serve no legitimate purpose.

    If we cut such spending we could have a $40,000 tax free threshold with a 20 per cent flat tax rate thereafter.

    You would think that someone living off the taxpayers’ coin and with access to Parliament’s analysts might judge it useful to provide some figures to support this assertion.

  28. Dr Fred Lenin

    This senator is now part of the aparat,he has been employed there for more than one term.
    Career polliegangsters ARE the problem not the answer ,never will be the answer.

  29. mh

    Tim Neilson
    #2725394, posted on May 31, 2018 at 9:21 pm

    Robin Hood robbed from an unfairly and illegitimately high taxing government and gave back to the productive citizens from whom that government had stolen.

    Was that the Russell Crowe version? I missed that one.

  30. rickw

    If we cut such spending we could have a $40,000 tax free threshold with a 20 per cent flat tax rate thereafter. For someone earning $120,000 this would mean they paid $16,000 of income tax, still more than the value they receive from government but less than half the tax burden imposed by the major parties. It’s not as if the government is spending our money so well that we should be paying any more.

    I am currently paying 47% directly. No doubt over 50% with all indirects. I get zero access to Government services and on the rare occasion I need to go to the doctor I que behind dole bludgers and immigrants.

    Completely immoral.

    On top of that, I get to live in a total nanny state where a large portion of my tax is spent telling me what I might not do and policing me to ensure that I don’t do it. On top of that the state media insists that I am completely despicable because I am a White Male.

    To say that I am completely pissed off with the situation is a vast understatement.

    The best solution seems to be to leave Venestralia to the horrible end that it most surely deserves.

  31. Snoopy

    I am currently paying 47% directly.

    No.

  32. Tim Neilson

    mh
    #2725699, posted on June 1, 2018 at 12:08 pm

    I was referring to the centuries old versions of the story, which have been perverted in recent decades.

    Evil Prince John was attempting to usurp the crown – i.e. make himself the government – while his brother was away, and in his guise as government he was oppressing the people with ruinous taxes (among other oppressive actions), and Robin Hood and his men robbed Prince John’s minions and gave the money back to the people.

    Even in the ’50’s this was still understood – hence the theme song for the old TV series said that he “robbed from the bad, to give to the good”, not that he robbed from the rich.

  33. Siltstone

    Quite right Natural Instinct

    Low tax rate and low income threshhold. I have seen a dramatic effect on the attitude of some people when they finally realise that the organised thieves in Canberra are going to keep their hard earned money. Until then tax was something others paid and hence why care about how much others were soaked.

  34. Rohan

    You would think that someone living off the taxpayers’ coin and with access to Parliament’s analysts might judge it useful to provide some figures to support this assertion.

    What, and be held accountable?

  35. Tator

    All the arguments on taxation I have ever seen have always stated that the best taxes have the broadest bases and the lowest rates. So far, everything about the Australian taxation system contradicts that philosophy. Currently we have the bulk of income taxation being paid by a narrow base of around 10% of the total population of Australia, even the GST is a mangled bastardised broad based tax with so many exemptions. Along with so many nuisance taxes and charges that just drive up CPI which is compounded by most being lifted by CPI every budget cycle. As commonly pointed out here, expenditure is the huge elephant in the room, especially by the State governments who find billions to spend on bread and circuses to generate “economic activity” What a crock that is.

  36. Nicholas (Unlicensed Joker) Gray

    The only good tax is a dead one!

  37. Bushkid

    It’s not as if the government is spending our money so well that we should be paying any more.

    Spot on!

  38. Bushkid

    Even a low income earner who sees 5% of their income be taken in tax then wants to curtail waste and be involved.

    An excellent point!

    Make everyone have skin in the game, make everyone want to cut waste and see their taxes use sensibly.

    Also, it cuts out one of the points where it becomes “unprofitable” to get off “bennies” and actually take up a job.

  39. AH

    If you boil it down, there’s no need for any tax. Everything can be funded voluntarily. Yes, there will be freeloaders, but there already are.

  40. hzhousewife

    I think it was Gillard who raised the tax-free threshold from around $6000 to $18,000 a year, I was astonished that this occurred with so little comment at the time, but of course every PAYE earner was thrilled at the time. People are simply OBLIVIOUS of what tax they pay, and no-one under 40 that I know thinks they will ever see any of their super, since they never see the actual money it is out of sight out of mind.

  41. Mother Lode

    where each person pays the same dollar amount of tax to reflect the fact that we all receive the same value from government services such as national defence and the justice system.

    Value is subjective too.

    For my part, all the sticky beak programs that tell me what I should eat, drink, read, think etc are of no value. I just ignore them.

    On the other hand, there is a swarm of little people who already think they should not eat delicious food, drink ambrosial liqueurs, and must preserve themselves from diverse opinion. They generally don’t need to hear government advice because the government models its advice on their dull, barren, colourless lives. Occasionally 1% might not be aware of the latest banality preoccupying the other 99%, but like a grey dye introduced to water the principle of diffusion is leading inexorably toward uniformity.

    They do, however, derive enormous value of an emotional sort in being reassured they are living the single correct way, being ‘in the right’, and licensed to despise anyone at variance from their own life.

    It is the only passion left to them.

    For them this is of near existential value.

    These fuckers should be taxed to the hilt.

  42. JohnA

    The answer is no; the value someone earning $120,000 gets from the federal government is a tiny fraction of the tax paid. This is a violation of the benefit principle of taxation; that your tax should reflect the value you get from government.

    The principle is based on the idea that government should provide services that a taxpayer wants but cannot obtain from the private sector. It is the moral foundation for the formation of government and for taxation, just as voluntary payment for services is the moral underpinning for the private sector.

    Libertarian? No. Logical? No again.

    If the moral force for government is
    a) to provide services on a user pays basis
    and
    b) to fill in the gaps where the private sector won’t provide a service
    then you have just opened up massive opportunities for cronyism, and you have established the basis for perpetually encroaching government – in fact, totalitarianism.

    If the private sector cannot make a dollar, logically it won’t provide a service. So it would be in “the government”‘s interest to make services unprofitable and unattractive for the private sector, then to set itself up to provide the service and finally to tax the residents/citizens/sheep to pay for it, that is, to socialise the losses incurred in the provision of the service.

    For example legal tender and the Currency Act, along with the sinister proposal to outlaw large cash transactions. Not to mention, the whole idea of fiat currency in the first place.

    Given humanity’s propensity for evil, I put it to you, Senator, that you have made a case for an immoral force to operate government for the sake of special interests (those who are willing to seize “the reins of government”) and against the general populace.

  43. rickw

    I am currently paying 47% directly.

    No.

    My accountant gave me the revised % and the bracket info 2 weeks ago. So Yes.

  44. rickw

    Cut and paste from accountant:

    Hi Rick, please see table below, any amount over the $180,001.00 is 47% including Medicare Levy.

  45. Flyingduk

    Taxation, at any level, constitutes theft because it takes money by force and without consent. Any argument about the value provided in return is irrelevant because that merely seeks to justify the theft. Given these principles, payment of tax is immoral and avoidance of tax is virtuous, and that conclusion can be drawn even before considering the destruction of societal wealth wrought by taking money from the productive and giving it to the unproductive.

  46. John NOBEL

    The Washminster-system of repressive democracy is broken.
    How not to advance Australia, fair, just perpetuate the money/ pollyTICs, media spin cycle: Expenses/ entitlements, section 44s, …
    What’s needed is more direct democracy, because fooling most of the people all the time is hard.
    I’d like to see mandatory and binding referendums for dollar grabs over x people, y dollars, z levels of gov not part of a published election platform, and for ADF adventures more than 1000 kilometers from Australia’s economic zone or territorial waters.
    Drop the noise about a republic, because the off shore royals have no need to steal from the people, their ancestors took care of that.
    Levels and types of dollar grabs, and quite different from Switzerland to Singapore. Switzerland may not have needed much rebuilding after WW2, Singapore not only gained independence, but look where it is at now.
    Still on the UN’s in-equality adjusted Human Development Index Australia is about third.
    Progressive, (Estonian) flat, (Thatcher-era) poll tax or duty or excise or levy or …
    Paid vs value received, hmmm.
    Ouch, thinking about opportunity, cost of living, education, healthcare, human rights, infrastructure (like growing population pressures) and even (not for real, as in barbed wire on approaches to the beaches with safe passage corridors for au pairs with a mobile, rather than homes, streets, transport, schools or work places) public safety and security.
    Signal the change by removing the colonial Union Jack from the flag.

  47. Tel

    Government is a protection racket, simple as that. The only morality in it is, “Hey buddy, ya need protection.” The highwayman makes an offer, “Your money or your life!” and it’s generally accepted that your life is worth more than your money so that’s the way most people make the decision. The government makes a similar offer, “A fraction of your money or your life!” which is fractionally better than the highwayman’s deal.

    Thus, the only best choice is a lightweight and competent protection racket that does offer some protection, at least enough to look after it’s own territory (see also the “stationary bandit theory”).

    After that it’s all downhill from there, as government wants to start messing with people’s lifestyle, making them equal, telling them who to bake cakes for or how fast their Internet should go.

  48. mh

    rickw,
    Up until the end of the 2017 financial year you would have been paying the temporary budget repair levy of 2 percent also, giving a top marginal tax rate of 49percent.

    Bill Shorten will bring that levy back, quick smart.

  49. W Hogg

    I’ve seen people so brainwashed that, in rejecting “progressive” taxation” they call flat tax rates “fair.” That’s self-evidently bullshit and only a poll tax is far. I use as many govt services, or less, than the next bloke (probably less, as the next bloke hasn’t been forced out of Medicare into private cover by a surcharge).

  50. Mr Black

    Tax-free thresholds are long term poison. They remove the pain of paying into the system from the vast majority of people who suck up welfare money, there is zero incentive for them to exercise any restraint in voting themselves a larger share of someone else’s money.

    A flat tax paid from dollar One with the rate linked to transfer payments would provide just the kind of feedback mechanism that people need to understand what happens when they vote for more “free” stuff.

  51. Fisky

    Tariffs cripple the country that implements them. You should always get rid of tariffs. This is classic economics.

    Yeah, that’s why the US became a third world country in the 19th Century after they whacked tariffs on everything. Same with South Korea, Japan, etc.

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