Tis the season to be taxed
It seems to follow a cycle. Shortly after an election. Close to the end of the year. A bit of quiet in the news cycle.
And bang, bop, zow! It’s time again to talk tax reform. And what is “tax reform”?
It starts with increasing the GST for sure with a promise to consider to investigated the possibility of maybe sometime in the future, if the weather and conditions permit, to review a study into the feasibility of having a conversation of reducing some taxes some time in the future, such taxes and future timeline to be determined by a review and investigation of the feasibility of the feasibility of studying the feasibility of a tax cuts. Some time later, but in the mean time increasing taxes now.
But here it the trick. When the discussion turns to tax reform, what is really being discussed is maybe, just maybe decreasing some tax rates with the objective of increasing overall tax revenue. Basically, a pea and thimble trick to grow the state while pretending to cut taxes.
Much like the so called Morrison tax cuts which will give back some bracket (inflation) creep to income earners. Yes. Return some of the inflation the Government has collected in tax. It’s like magic:
In addition to taxation being the only form of revenue legally permitted to be collected through physical force, the interaction of taxation and inflation offers government finances a magical privilege. Through inflation, governments can generate increased tax revenues without increasing tax rates.
Wage price inflation generates additional income tax, and payroll tax. Consumer price inflation generates additional goods and services tax, and fringe benefits tax. Asset price inflation generates additional land tax, capital gains tax, and stamp duty. And even when taxes do not auto-inflate, governments index such taxes.
It’s no wonder the RBA has an inflation target of 3% and why they are talking about printing money. Inflation is GREAT for tax revenue.
But TAFKAS digresses.
One day, possibly in TAFKAS’ dreams, there might be a discussion on spending reform rather than tax reform.
Rather than bigger and better ways to extract money, by force, from citizens, there can be a discussion on what government should stop doing and what they can do less of and, god forbid, better. Let’s start with this list as described in this post.
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Director – Old Parliament House – $360K!!! that would be a ridiculous amount for the Director of the New actually being used for its primary purpose Parliament house.
$360K to make sure the dunnies get cleaned, the security alarm gets turned on at night and the lights turned off.