It’s Duck Season. It’s Wabbit Season.

Like a Looney Tunes cartoon, Australia has reentered the tax wars.  It’s Duck Season.  Not it’s Wabbit Season.  You increase your taxes.  You increase your taxes.  And on and on.

There will be no changes or winners, but plenty of ink flowing.

(To be fair, most of the original Looney Tunes cartoons were  great, and TAFKAS’ favourite remains the 3 Little Bops).

Writing in the Australian today, former (twice unsuccessful) Labor pre-selection candidate and current Dean of the UNSW Law school, George Williams AO (Always Opinionated) wrote:

Rather than beginning with the rate and base of the tax, we need first to examine who has power to alter the GST. We need to remove the conflicting incentives that stymie every attempt at change.

This could be achieved by the commonwealth allowing the states and territories to directly amend the rate and base of the GST within an agreed range. This would reflect the character of the GST as a tax collected solely for state purposes and would make clear that the states and territories bear the political responsibility for reform.

Yeah right.  Let’s dream the dream.

Why does not Australia just return to constitutional first principles and let the Commonwealth keep the GST revenues and let the States keep income tax (personal and company) revenues.

Voila!  Like was envisaged with the constitution to start with.  The Commonwealth can live off goods and services taxes (inc excise – tobacco and alcohol).  Plenty there to fund defense and immigration and the stuff included in Section 51.

The states can set and collect income taxes to fund health, education and the rest.

Much simpler and cheaper.

Bish, bosh, bash.

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21 Responses to It’s Duck Season. It’s Wabbit Season.

  1. H B Bear

    Yet again tax reform is just tax increase. The out of sync electoral cycles suggest the GST will never be increased. A good thing.

  2. stackja

    If only a GST then good. No other taxes. Fewer bureaucrats needed.

  3. Roger

    Repealing the two 1942 Acts that lie at the heart of our present dysfunctional ‘vertical fiscal imbalance’ federalism and permitting states to collect income tax once again would be the simplest yet most profound tax reform that could be made in this country.

  4. Jock

    While I am a life long fan of BB my fav is “Homeless Hare”

    As to Williams commenting on tax, I suppose his legal contitutional commentary was useless so he ghad to move on.

  5. Natwally

    The starting point is reducing the size, cost and impact of Government at all three levels to the bare minimum and clearly define their non overlapping areas of accountability. Then you can calculate the cost and then you can design the tax system. Politicians always do this backwards by trying to work out how to ‘painlessly’ squeeze tax from taxpayers to pay for the Government we have now, never challenging the status quo.

  6. MACK

    Ducks, wabbits. What about the pigs, and can they fly?

  7. Scernus

    Why would any state increase their GST rate when the increased revenue would just be re-distributed to the parasite states?

  8. Roger

    The starting point is reducing the size, cost and impact of Government at all three levels to the bare minimum and clearly define their non overlapping areas of accountability.

    Areas of responsibility are clearly mapped out in the Constitution, Nat.

    The fundamental problem is that two Acts poassed in 1942 shifted income tax collection to the Commonwealth and turned the states into beggars.

    Repeal those Acts and several things will happen:

    1. The Federal buraucracy – including an education department that runs no schools and a Health department that runs no hospitals – will shrink.

    2. Those that set and collect income tax will be brought one tier of government closer to the people who pay that tax. That should make them much more responsive to the views of tax payers, unlike those who live and work in the Canberra bubble and increasingly spend little time with their constituents.

    3. It would set the stage for competition between the states on business and personal tax rates, leading to lower taxes overall.

    4. Under such a regime states would be more likely than the Commonwealth behemoth to live within their means, not least because if they fail to do so there will be no one to bail them out.

  9. John Barr

    Hmmm… You want to stir the Country up with a change of the GST rate, especially while a Conservative Government is in Power. Or, alternatively you want the States to Regulate the Rate of GST.

    Yep, I can see that coming from an “old Commie” wanting to create a continuous roll of havoc with-in a Democracy. Ay.

    Ya see, that’s what they do. Ay.

  10. Bruce of Newcastle

    Rather than beginning with the rate and base of the tax, we need first to examine who has power to alter the GST. We need to remove the conflicting incentives that stymie every attempt at change.

    Haha, I suspect if you polled the voters you’d get about 80% opposed to increasing GST. So removing the conflicting incentives that stymie every attempt at change would seem to require the removal of the existing voters and the getting in of new, more-compliant voters. But then the elites have never liked the bogans who are forced by the ATO to pay their juicy salaries.

  11. Malcolm Turnbull had the same brain fart and the Premiers wet themselves!

    Imagine having to be responsible with other people’s money.

  12. Natwally
    #3504705, posted on July 6, 2020 at 10:06 am
    The starting point is reducing the size, cost and impact of Government at all three levels to the bare minimum and clearly define their non overlapping areas of accountability.

    There’s a party for that: LDP.

  13. sfw

    I always liked the singing frog

  14. Ubique

    The hilarious aspect is that John Howard was forced by Labor and Greens opportunistic opposition to the GST to require that any increase in the rate be agreed to all States. Yet it was always going to be the socialists who would be wanting to jack up the rate. They shot themselves in both feet as the agreement of all States is mission impossible.

    As long as the mendicant States of SA, Tas and Qld are allowed to plunder WA’s GST, there’s zero chance of we Sandgropers agreeing to up the rate.

  15. Rob MW

    The states can set and collect income taxes to fund health, education and the rest.

    TAFKAS – as evidenced in the U.S the commie led States and cities have an insatiable appetite for large tax rates which in turn has promoted an exodus of well off and middle class residence to move to lower taxed mostly Republican run States and cities. The problem that arises from this movement to lower taxed States & cities is that, as a rule, these very same evacuees are the very socialists that voted in the leaders that created the shitholes that they are leaving in the first place. Well meaning, yet, really stupid politically correct arsehole.

    Me, for Australia, I think that it is very important that these socialist shitholes remain in tact and should not be given the power of taxation on the grounds that a large majority of commies/socialists like the shitholes that they have created, and will stay if cheap enough, so they should be encouraged, by any means possible, to stay exactly there along with their commie/socialist votes and worldview.

    So no, the States should not be given the power of taxation.

  16. Natwally

    Forester – I was a member of the LDP when Leyonhjelm was around and attended several of the party forums here in WA. Unfortunately their priorities were/are speed limits (?) and getting bloody airsoft guns approved for use – see here….https://www.goairsoft.com.au/

    Absolutely clueless so I let my membership lapse and am now again wandering the political wilderness in search of a true small government, personal responsibility and personal freedom party who will stay focused on the big issues.

  17. Pedro the Loafer

    So no, the States should not be given the power of taxation.

    Fully concur. Bludging states like Tasmania would up their tax rates through the the roof to fund their welfare hordes into luxury lifestyles because “fairness”, businesses and the well off would bolt to a lower taxing state, the new residents would vote in the same dickheads as the state they left and the cycle would repeat.

    There would be more money hidden in mattresses than in the coffers.

  18. Jonesy

    Actually, federal or state? Deep dive and you must come up with the revelation ….one level of government is surplus to requirments. There is not one portfolio that can be justified to stay exclusively a state issue! 26 million people? We kid ourselves over our parocial importance.

    Dan Andrews and his PS cronies are the surest argument against having soverign states within the borders of our two islands.

  19. John A

    Roger #3504696, posted on July 6, 2020, at 9:55 am

    Repealing the two 1942 Acts that lie at the heart of our present dysfunctional ‘vertical fiscal imbalance’ federalism and permitting states to collect income tax once again would be the simplest yet most profound tax reform that could be made in this country.

    They do not actually prohibit the States from levying an income tax. They simply work to reduce the “reimbursement” to the States by whatever they collect for themselves.

    Efficiency and political expediency ensure that the Feds get the heat for any tax increases while managing one collection system aka the ATO.

  20. H B Bear

    Anything that can increase the competitiveness between States would be a good thing. The last time there was a meaningful tax arbitrage between States was when Joh was in Queensland and did not levy FID orBAD (can’t remember which) on bank accounts. GST equalisation, COAG and the High Court have all worked to diminish the effectiveness of a federal legal structure.

  21. Squirrel

    Another absolute gem from Looney Tunes is this –

    https://www.dailymotion.com/video/x301k1t

    In just over six very funny minutes (complete with musical accompaniment), it says all we need to know about the true relationship between gummint (Bugs – who would make a very good Treasurer and/or Commissioner of Taxation) and the public.

    The barber’s chair race is, of course, about vertical fiscal imbalance and the Strayan way to solve it.

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