Voluntary tax bill

It is time for the Government to consider a voluntary tax bill.

How many times have you observed a prominent person bemoaning ‘the fact’ that Australians don’t pay enough tax?

Usually it is an ideological pretext to increase the amount of income redistributed.

What about those that accused the previous government of profligate spending because of tax cuts. Well yes, the previous government did have some silly and expensive programs. But a tax cut is not spending. It is a tax cut! A cut to revenue not an increase in expenditure.

What we need is a voluntary tax bill.

Those piously calling for increased taxes can then lead by example. Put their money to a good cause – taxation.

I propose that tax deductible contributions to the Australian Tax Office be permitted and indeed encouraged.  And just like donations to say Opera Australia, the donor’s name should appear on the ATO’s website and in its annual report. We could even give donors different titles: a platinum donor for those paying voluntary tax above say $20,000. A gold donor for those paying between $15,000 and $20,000 and so forth.

Then when we hear another claim that taxes should be increased, we just need to check the ATO’s website to see how much voluntary tax the proponent donated in the past year.

The ATO: a worth deductible gift recipient.

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15 Responses to Voluntary tax bill

  1. Economic liberals know that their ideas on redistribution will probably only see light support despite some widespread recognition as being partly correct.

    How about a compromise? The left can thieve whatever the public supports IF they don’t go about it in the most stupid way possible.

    Is payroll tax really a clever way to help out low/no income earners?

    Maybe the level of redistribution should be voted on by referenda but the collection method must be chosen by rankings of various inefficiencies and other spending (i.e military) as well as regulation must pass a cost benefits test, rank better than no regulation and also be ranked accordingly to choose the regulations actually enforced.

    The ETS is another stupid policy. Waxman Markey looks dead in the US, and now Obama is warming to nuclear.

  2. Actually, you wouldn’t even need a bill. Just enter the country on the list of recognized charities.

    This could be quite interesting, especially if you could treat each /agency/ (anthing with a .gov.au address) as a specific entity, which means you get to “donate” to your agency of choice – in essence, making an hypothecated tax contribution.

    What’s the libertarian line on hypothecated tax? (I’m way to the left of my catallaxian friends).

    Giggling at the idea of agencies trying to become more popular by putting ads up saying how efficient they are with funds, so send money to /that/ agency rather than /another/. Maybe they’d even be a bit better at disclosing exactly what they spend the money on. Just don’t want them cold-calling me on phone or by email!

  3. Dave — you can put yourself on a “no call” list these days. 🙂

    And voluntary transactions are generaly “hypothecated”. When I give $1 to the apple seller it’s not just for anything… it’s specifically for that apple. So I totally agree that people should be able to allocate their voluntary “tax” to a specific portfolio or government function.

    I quite agree Samuel.

  4. JC

    Yes bring it on.

    And Dave good idea. Allow ear-marking.

    One point though. There is nothing to stop people sending more money to the tax office even now. You are only required to pay the minimum amount the state is due. It doesn’t stipulate the mex.

    I always wondered the many times Mr. Integrity – Warren buffet- argued taxes were too low if he paid more than was required. I knew the answer of course.

    I one recall reading that a deceased estate was left entirely to the tax office/ the state.

  5. I like it. I suspect the main effect, though, would be an increasing in donations to organisations that are not the ATO – ie, charitable and philanthropic donations. It’s a simple move that would make these choices more obvious to people.

  6. Peter Patton

    Does anybody know the history and rationale for ‘payroll tax?’ I am by no means a Nozick-worshipping libertarian, but this ‘payroll tax’ strikes me as just plain wrong.

  7. I believe it was a tax levied to encourage enlistment during World War II.

    Ostensibly it was for child endowment.

  8. There’s a list of states in the US where there is indeed such legislation in place – for a good summary you can go to http://www.fiscalaccountability.org/tax-me-more

  9. A 200% tax deduction on all charitable donations – with each department as a registered charity – would do the trick… would be funny to see departments compete for donations.

  10. ken n

    Would be fun to see.
    One piece of “research” popular among those on the left is to ask:
    “Would you be prepared to pay more tax if it went towards improving hospitals” (or somesuch).
    The Australia Institute did this often, as I recall.
    A significant majority say yes.

    If opinion and attitude research needed peer review, most researchers would say that the respondents are lying and should be ignored. It quite often happens when people are asked “what you you do if…”

    But the point of the process is to get the right answer so the results are published.

  11. Tim R

    “I propose that tax deductible contributions to the Australian Tax Office be permitted”
    I actually didn’t realise this wasn’t permitted. It is permitted in the US.

    “Those piously calling for increased taxes can then lead by example. Put their money to a good cause”
    Of course, those people don’t want to pay more tax – they want other people to be forced to pay more tax. I doubt they are never going to be satisfied with a voluntary system.
    Lefties answering survey questions are one thing but putting actually putting their money on the table is another.

    Personally I think all tax should ideally be voluntary. I don’t think this will be achieved in my lifetime but steps in this direction would be good. People need to first understand why voluntary is better than involuntary. (ie: the non-initiation of physical force principle). I don’t believe most Australians understand this. The same goes for voting which should also be voluntary. I’ve been quite surprised in the past to see people vehemently defending compulsory voting.

  12. Rococo Liberal

    The voluntary tax payment (or ‘smug tax’) would be in effect an extension of the income tax payable by the taxpayer concerned. Therefore, the smug tax would not be deductible.

  13. Rob W

    Voluntary tax payment should attract double taxation, this would allow the idiot concerned to feel both smug and aggrieved.

  14. OK, so hypothecation doesn’t seem a dirty word… but you can bet the pollies won’t want all their trough hypothecated away…

    So, I wonder if it /is/ practical to instead suggest a government might allow some percentage of tax receipts to be allocated according to the wishes of voters (1% or 2% would be significant) and, at election time, have an extra ballot paper that listed major agency groups and allowed people to tick or apportion those agencies that they wanted to see get a share of that 1% or 2% quasi-hypothecated cash.

    The trick is that those monies would go STRAIGHT to the department concerned, for use by the agency, so the minister couldn’t take credit for spending the money.

    Ideally, the pollies wouldn’t get the results of the hypothecation preferences until AFTER the budget, they’d merely have to do /their/ stuff assuming that they had one or two percent less money to play with.

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