Gurgle gurgle gurgle

The natural progress of things is for the government to gain ground and for liberty to yield.

… said Thomas Jefferson a long time ago.

In light of the weekend election results Spartacus would like to dissect a key claim of the Labor Party … that the proposed company tax cut would deliver $17 billion to the big banks.  So said Bill Shorten in April of this year:

“I hope for the sake of the nation they (the government) surrender their $80 billion taxpayer-funded corporate giveaway” and it would be “immoral to give the big banks of Australia a $17 billion tax handout, especially in light of the shocking and predatory revelations of the Royal Commission”.

Apart from the grossly offensive suggestion that businesses, large or small, keeping more of their earnings (rather than having them confiscated by the Government) is a “taxpayer-funded corporate giveaway”, what Spartacus would like to know is from where did this $17 billion figure come from?

$17 billion.  Hmmm.  If nothing else, is assumes that banks remain profitable, a probable but not certain assumption give the current political and economic environment.  But the number.  From where does it come?

Such calculus is possible if it was generated using Swanematics; the school of budgeting, that was founded by the Australian Labor Party, that designs taxes to not generate revenue and describes the situation where expenses exceed revenues as a surplus.  Does anyone out there in Cat-land know the source and underlying assumptions behind this number?  Or is it, like most Swanematic analysis, produced with the rigor of an AWU member count.

More to the point, as Cats know, Spartacus has two young Spartacii who is trying to teach the way of the Spartacus.  And a frequent subject of discussion in the Spartacus household revolves around the difference between right and wrong versus legal and illegal.  Spartacus is trying to explain to the young Spartacii that, just because something is legal, does not mean it is right (and equally, that something that may be illegal is not necessarily wrong).

18c may be “legal”, but it is certainly wrong.  High and in many cases usurpatious taxes may also be “legal”, but again they are certainly wrong.

There once was a time when if the King was a Catholic, Protestants (or if the King was a Protestant, Catholics) feared for life, liberty and property.  This was, relatively speaking, not that long ago.  But in our more “civilised” society, harnessing a mob to get a legislative outcome against people or groups one does not does not a civil society make.  But this is what the modern Australian progressive movement seems to be about nowadays; using the instruments of the state to punish people and things they don’t like.

  • Don’t like the banks – tax them more.
  • Don’t like business – tax them more.
  • Don’t like fat people – tax them more.
  • Don’t like smokers -tax them more.
  • Don’t like successful people – tax them more.

This is why the US Bill of Rights is such a brilliant thing; it takes certain things out of the hands of the mob.  But Australians should not fear.  There is a solution to ever growing and capricious government ….. more government of course.

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31 Responses to Gurgle gurgle gurgle

  1. Blair

    Who owns Australia’s Big Banks? Scrooge McDuck?

  2. I think that $17 billion came from the same methodology used to cost the NBN.

  3. Up The Workers!

    Has anybody ever worked out the monetary value of the tax concessions currently enjoyed by freeloading Unions?

    Fat-bottomed Union bosses are always the first to grizzle about what they see as companies getting off lightly with regards to tax, but how much are they getting away with, compared to the rate at which companies have to pay?

    In these days of massive industry-run Superannuation schemes, scams and trailing commissions, etc., I wonder what justification other than “we can get away with it” there is, for tax-exemptions to Unions.

  4. Fat Tony

    Blair
    #2777784, posted on August 1, 2018 at 10:31 am
    Who owns Australia’s Big Banks? Scrooge McDuck?

    Nah – it’s the little guy with the top hat & cigar from the Monopoly game

  5. Singleton Engineer

    Great idea… a Bill of Rights.

    Wait on. Didn’t Wookie Wilkie propose such a Bill in 2017? Of course he did, but it didn’t get through.

    Further, isn’t there some debate about whether said rights should be embedded (eg, via the Constitution) and thus stand above parliamentary legislation?

    Maybe this isn’t simple after all. But it initially sounds like a great idea, until considered deeper.

    Here’s the case for the motion: https://www.lawteacher.net/free-law-essays/administrative-law/should-australia-have-a-bill-of-rights-administrative-law-essay.php

    I’m sure that many Cats would urge caution before proceeding – for example, there are a couple of dozen border protection and terrorism related federal statutes enacted post 2011 that may struggle to survive any Bill of Rights with teeth.

    To be completely frank, as an engineer and not a philosopher or legal eagle, this sounds like a classic illustration of the maxim “Be careful what you wish for”.

  6. H B Bear

    If the answer to the question is a Bill of Rights then you are asking the wrong question.

  7. Lutz

    It seems that banks in 2016 paid about 14 billion in taxes. Lowering taxes to 27.5 % is an 8.33 % reduction meaning banks would only pay 12.8 billion or 1.2 billion less. Lowering to 25% is a 16.7% reduction resulting in banks paying 2.4 billion less per year. It would take at least 10 or 12 years to come up with a 17 billion reduction depending on what kicks in when.

  8. Tim Neilson

    Up The Workers!
    #2777839, posted on August 1, 2018 at 11:51 am

    It’s not just that they’re tax exempt.

    It’s also their political donations that rort the system.

    An individual gets a deduction (which should be abolished, but that’s another issue) for political donations only up to a specified cap.

    But a union member gets a deduction for union fees, on which the union doesn’t pay tax because it’s tax exempt. Nor is there any tax when the money gets handed over to the Labor Party.

    So when the union gets deductible fees in and hands them to Peanut Head and the gang, that’s effectively creating an extra tax deduction for donations to the ALP.

    If tax exempt status for unions is to survive at all, then there ought to be a tax penalty for any money they donate to Peanut Head.

  9. Dean

    Like everything else Bill Shorten says it is a lie.

    Lutz got it almost right, except the 14B is everything, including GST, payroll, FBT. The company income tax figure is closer to 12B.

    For the Banks it would not kick in till 2024, and does not go to 25% untill 2027.

    So in 2024 (27%) it would be 1.2B
    In 2025 (26%) it would be 1.6B
    And in 2026 (25%) and beyond it would be 2B.

    So theoretical tax loss at current numbers would take until 2033 to amount to 17B! Does anyone seriously think that tax rates will not change again before 2033?

  10. Shy Ted

    Gurgle gurgle gurgle Damn, thought Maocolm might have drowned. Maybe tomorrow.

  11. Linden

    I think a lot of investors and dear bill, the one who wants to become the anointed one,is just itching to get his little unionised hand deep into their now very vunerable pockets!

  12. Neil

    I think that $17 billion came from the same methodology used to cost the NBN

    I am not sure it was ever costed. Rudds 2007 election policy was to cost taxpayers $4.7B and finished by 2013. After the election they threw that policy into the bin. The current NBN was thought up on a plane flight in 2009 costing who knows what finished who knows when

  13. Eyrie

    The US seems to manage with a Bill of Rights and Constitution, particularly when they actually use them. Of course those were written by really smart people. Ours would be written by dummies.

  14. I am not sure it was ever costed.

    Exactly!

  15. Lutz

    Malcolm had the opportunity to stop the NBN when he was communications minister under Abbott. Probably Tony’s worst decision of all.

  16. Iampeter

    Spartacus is trying to explain to the young Spartacii that, just because something is legal, does not mean it is right (and equally, that something that may be illegal is not necessarily wrong).

    But did you end up clarifying what should be both legal AND right?
    Or did the poor young Spartacii remain in the dark on only the most important point in politics that not even professional political commentators can give a clear answer on?

    But this is what the modern Australian progressive movement seems to be about nowadays; using the instruments of the state to punish people and things they don’t like.

    Don’t like the banks – tax them more.
    Don’t like business – tax them more.
    Don’t like fat people – tax them more.
    Don’t like smokers -tax them more.
    Don’t like successful people – tax them more.

    Yea but as we covered in a previous thread, you don’t think we can build roads without stealing peoples money so its not the taxes themselves you disagree with but rather the reasons for them.

    That means, in principle, you’re not really disagreeing with the left on anything important.

  17. Neil

    Malcolm had the opportunity to stop the NBN when he was communications minister under Abbott.

    Really? Do you have a link? Or are U just telling lies.

    LABOR signed unbreakable contracts.

  18. David Brewer

    immoral to give the big banks of Australia a $17 billion tax handout

    I don’t know about you but I have my doubts that Shorten even believes this himself. Take the phrase

    give…a…handout

    How many times does it have to be pointed out that a tax cut is not a handout – that the taxpayer is still paying tax, and in this case a huge amount, just a bit less than before.

    immoral

    The banks are not persons, so morality does not enter into it. The only question is whether the tax cuts for banks and other companies will benefit society as a whole, or not.

    the big banks of Australia

    Would it be better if they were small banks?

    Underneath Shorten’s claptrap is a refusal to see the economy as a system, a set of circuits with money passing from one actor to another in voluntary exchange for goods and services. The banks’ profits come in the first place from circuits of lending and borrowing which are essential to productive investment and therefore to growth and employment. The more profits they retain due to reduced tax payments, the more they can expand these activities. Or they can increase dividend payments to their shareholders, which these days include practically every worker in Australia through superannuation. Or they can do nothing with the money, just improve their balance sheets, in which case their share price will rise, again benefiting their shareholders.

    Yet Shorten treats the $17 billion as lump sum given in perpetuity to an unworthy beneficiary, who as a result will wallow in luxury while the workers starve. Can he really be so stupid? I doubt it. I smell lying hypocrisy.

  19. En

    It doesnt matter if Malcolm or Bill think tax cuts are a good idea or not.
    The point is we want businesses employing people in Australia.
    Overseas corporate taxes are falling. If we don’t match them, our businesses will become uncompetitive and either move overseas or die.
    End of story.

  20. .

    Yea but as we covered in a previous thread, you don’t think we can build roads without stealing peoples money so its not the taxes themselves you disagree with but rather the reasons for them.

    That means, in principle, you’re not really disagreeing with the left on anything important.

    This is over their heads. Go more slowly.

  21. Tim Neilson

    Yea but as we covered in a previous thread, you don’t think we can build roads without stealing peoples money so its not the taxes themselves you disagree with but rather the reasons for them.

    That means, in principle, you’re not really disagreeing with the left on anything important.

    In Thatcher’s Britain, the government still built things.

    If you don’t think that the difference between a top marginal rate of 98% (UK pre-Thatcher) and 40% (UK by the end of Thatcher’s time in office) is important, you’re destined to spend a lifetime of impotent fury railing at the 99.999% of the population who really don’t care who builds the road as long as it’s built properly and for a reasonable cost. (Yes I know that the government doesn’t actually do that, but you’d be better stressing that point than denouncing Thatcher as a leftist.)

  22. .

    Thatcher was cut down in her prime. She did great work, but Britain was still socialist at the end of her rule.

    It makes you appreciate how far gone to Two Legs Bad, Four Legs Good they had actually drifted in about 34 years.

  23. Tim Neilson

    Thatcher was cut down in her prime. She did great work, but Britain was still socialist at the end of her rule.

    It makes you appreciate how far gone to Two Legs Bad, Four Legs Good they had actually drifted in about 34 years.

    True.

  24. Rob MW

    To be completely frank, as an engineer and not a philosopher or legal eagle, this sounds like a classic illustration of the maxim “Be careful what you wish for”.

    A Bill of Rights is nothing more than codified Common Law mate, and to codify the Common Law it must attached to the Constitution but here’s the best part…………. it’s a limitation on Government, which in Australia under both the Commonwealth of Australia Constitution ACT or under State Constitutions there is very little to no limitation on Government(s) legislative authority and largely based on the quite novel notion of Responsible Government. Australia use to be a Common Law jurisdiction modeled to a fair degree (Quick & Garran) on the US Constitution but tellingly, failed to either enshrine the Common Law directly into the Constitution or attach a Bills of Right to the Constitution.

    Lastly, the introduction of the Australia Act(s) completely fucked any chance of recovery from the error that our forefathers made in developing the Constitution and the political class know it, that’s why the idea of a Republic is no longer considered by the political class because, wait for it, we are already a Republic under Parliamentary Supremacy and the politicians will never, ever give that sort of power up, not here or anywhere else in the world. It’s human nature.

  25. Iampeter

    If you don’t think that the difference between a top marginal rate of 98% (UK pre-Thatcher) and 40% (UK by the end of Thatcher’s time in office) is important

    Sure its important and 40% is better than 98% but its not an alternative and that’s my point.
    That’s fine if your position is less tax and spend as opposed to more tax and spend but just don’t make “booo leftists” posts, since you’re one of them.
    Conservatives tend to just want less leftism but fail to provide alternative ideas. That makes them leftists.

    Yes I know that the government doesn’t actually do that, but you’d be better stressing that point than denouncing Thatcher as a leftist.

    I disagree and I think this is how the conservative movement has ended up failing so totally. You need to propose alternative ideas to that of the left or you are, for all intents and purposes, of the left.

  26. mh

    Iampeter, you are the most right wing commenter here. Well done. But Tommy Robinson is “Far right”, so you still have a way to go.

  27. Tim Neilson

    Conservatives tend to just want less leftism but fail to provide alternative ideas. That makes them leftists.

    For someone who’s intellectually in the thrall of Ayn Rand, you’re remarkably ignorant of the works of her supposed intellectual hero Aristotle.

    The most egregious example is your open borders lunacy. You can’t quite bring yourself to deny that governments should stop highly contagious carriers of devastating plague illnesses from entering the country, but you refuse to admit that that blows your ideological open borders absolutism out of the water.

    But it’s the same with your obsession about the supposedly inherent evil of government works. If 40% is better than 98%, who cares whether it’s an “alternative” or not? Argue for 30% or 20% or whatever if you like.

    The Laffer curve gives us a pragmatic empirical way of understanding the upper limits of effective taxation, and we can then have a debate on how far below the top of the Laffer curve we should stay. But it won’t be a zero rate.

    I believe that you understand that governments should provide for defence and for law enforcement and courts (though why we would need defence if we had open borders lunacy is not apparent). That needs to be paid for so there will be some taxation. Debates about exactly what governments should and shouldn’t do, and therefore about what tax revenue they need to raise, are inherently not soluble by the kind of binary good vs evil absolutism which Aristotle criticised, and which you try to insist upon.

  28. JohnA

    Neil #2778165, posted on August 1, 2018 at 6:23 pm

    Malcolm had the opportunity to stop the NBN when he was communications minister under Abbott.

    Really? Do you have a link? Or are U just telling lies.

    LABOR signed unbreakable contracts.

    Ultimately, there is no such thing as an unbreakable contract. There is only the cost of wearing the consequences.

    There is a principle of governance which goes approximately “no committee of management [government] can bind a future committee [government] in perpetuity”.

    Any government should be able to cancel an earlier policy or renege on a deal if it is prepared to pay compensation (see Dan Andrews Victorian government and East-West Tunnel for a recent example).

    Given the enormous cost of the NBN and its dubious technical usefulness (refer definition of “white elephant”) it should have been open to the Coalition to close off the whole project and revert to their earlier policy of upgrading the network backbone for about $4.2Bn. The final cost (maybe $13Bn at worst) would still have been a long way cheaper than the dog’s breakfast hybrid mess we have now.

    Had they the cojones to do that, we would still have today a competitive telecomms market rather than a re-nationalised, (union-dominated?) single network.

  29. Iampeter

    For someone who’s intellectually in the thrall of Ayn Rand, you’re remarkably ignorant of the works of her supposed intellectual hero Aristotle.

    Well Aristotle was a giant for reasons there’s no point getting into here but his work was very incomplete. Rand completes that work. You don’t go back to Aristotle to try and disprove Rand or something.
    And if you’re trying to disprove Rand well, you’re a leftie.

    The most egregious example is your open borders lunacy. You can’t quite bring yourself to deny that governments should stop highly contagious carriers of devastating plague illnesses from entering the country, but you refuse to admit that that blows your ideological open borders absolutism out of the water.

    Not sure what the confusion here is. The government can stop criminals/infected people. That doesn’t mean it can stop non-criminals, non-infected people. Pretty much like with everything. No confusion on my end.

    “Open Borders” is not really an issue to the politically literate, it’s just an amalgamation of a whole bunch of different issues like immigration, refugee programs, welfare, foreign policy, which have all been wrapped into one because conservatives have no clear positions on any of those separate issues and so need to dumb it down further into one simplistic made-up issue to have a yes/no position on. And then you call me an absolutist.

    But it’s the same with your obsession about the supposedly inherent evil of government works.

    There’s no inherent evil in government works. I have a clear position on what a government should and should not do and I can explain why. You and the conservative movement, do not.

    The Laffer curve gives us a pragmatic empirical way of understanding the upper limits of effective taxation,

    Yes but what it doesn’t give us is any alternative ideas to that of the left. Disputing what the tax rate should be means agreement on the fundamental level with the idea of a collectivist and rights violating government. This means agreement with the left wing.

    I believe that you understand that governments should provide for defence and for law enforcement and courts

    What’s more important is I have a clear understanding of why this is the case. I have this because I have a clear political ideology, which in turn is derived from a clear understanding of more fundamental philosophical concepts that politics rests on. Conservatives do not have this and so cannot put forward any political ideas.

    Debates about exactly what governments should and shouldn’t do, and therefore about what tax revenue they need to raise, are inherently not soluble by the kind of binary good vs evil absolutism

    They are to those of us who know what we are talking about. What you and the conservative movement want to do is talk about politics without knowing anything about politics. This is obviously impossible which is why conservatives do nothing but advance leftism in practice.

    Again, this is fine if what you want to do is advance leftism in one form or another. It becomes an issue because conservatives claim to be an alternative to the left.

  30. .

    The Laffer curve gives us a pragmatic empirical way of understanding the upper limits of effective taxation, and we can then have a debate on how far below the top of the Laffer curve we should stay. But it won’t be a zero rate.

    Really?

    If all we had a was a night watchman state, people would still voluntarily contribute to the funding of those services. Philanthropy would go up, the wealthy would have the most incentive to donate. There would be a very large increase in overall incomes so we’d still see billions in the coffers. Last year saw over 140 bn in charity revenue. As for donations – far less, because of the public sector getting involved.

    In 2016, over 11 bn was donated to charity.

    An interesting result is that the US gives a lot more per capita. This is because of our punitive income tax system. US charity donations are 2.1% of GDP. 2.1% of our GDP is basically 30 bn AUD. Remove all taxation and the figure can go much higher.

    The neoclassical economic argument against the voluntary funding of public goods is that underprovision will occur.

    I disagree. The level of coppers needed or courts might be in proportion to the population, but modern warfare sets a discrete level of optimal defence spending.

    A well-armed militia and some nukes make us un-invadable. Our issue is the projection of sea and air power and protection of our sea lanes (and CT operations). Drones are technology that ought to be used to facilitate this.

    Even if there is two million invalid people in Australia, the idea that churches and other institutions could not help them, or their families, after significant (total) abolition of taxation is plainly wrong. Defence might be a lot cheaper than we have the mindset for now (too much labour and inefficiency) and public education (compulsory, free to the end user, funded by taxation) is basically obsolete. It belongs in the 1790s.

    There is nothing inherently radical with these ideas. The data support the concepts. The problem is that people feel comfortable with monstrosities like public education or the ADF as a PR exercise for the government.

    It is merely that the ideas are different and eschew a lot of assumptions and sacred cows that they are viewed as controversial. They also step on toes, e,g., by recognising public education as a racket. It is an inefficient system for teaching and simply results in wasting part of your life in an institution. A totally uneducated adult could learn the entire K-12 content in half a year. There is also data from Massachusetts that showed public education resulted in LOWER literacy rates.

    I’d say that if we got rid of taxes altogether, we can assume at least 30 bn per year, but probably more like 60-100 bn. Even on that low figure; $5bn on defence (including border security), $5 bn on law and order.

    If that does not seem like much, it is a matter of getting our priorities correct. Not arresting people for owning the wrong amount of marijuana. Not indicting lawyers for being whistleblowers against our government trying to bully and steal oil off a smaller country. Not giving people tickets for being 5 km/hr over the limit. Not having the chief of the army dress up like a transvestite. Always buy off the shelf with proven tech for defence. Creating a militia. Not prosecuting people for building levees to protect their own property. Not prosecuting people for cutting down forests that threaten their homes in a bushfire. Not threatening to gaol people who do not fill in a census form.

    $20 bn in private charities would serve the needs of millions; over 1.5 million at the going Newstart rate. Gifts to the needy would not need be so highly valued as there would be no need for a pre-tax component.

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