These are the recent words of New York Governor Andrew Cuomo:
A single percent of New York’s population pays half of the state’s taxes, and they’re the most mobile people on the globe.
Whilst the numbers are not the same in Australia, they are directionally similar. The “rich” more than pay their share. And in fact, given that before CoronaCrisis2020, more than 50% of Australian’s paid no net tax, Australia’s high earners paid more than their fair share.
But there is an important difference between Australia and the US. In the US, a large proportion of their tax revenues come from property taxes, which while not perfect, have some correlation with wealth. In Australia, we mainly tax high income earners who may not be particularly wealthy.
A 30 year old with limited assets who earns $200,000 a year pays a hell of a lot more tax than a 70 who lives in a multi-million house.
This is not a case for tax reform or a land tax. This is trying to point out that Australia is not going to get out of its post-CoronaCrisis2020 fiscal hole through higher taxes. To repeat the words of brother of Fredo:
they’re the most mobile people on the globe
More so now given that the odds are that this 30 year old with limited assets is either unemployed or if still working, working for the government.
Australia’s only path out of this hole is through supply side reform. These have to be actual policies and not platitudes. There needs to be wholesale scale back of the Australian Regulatory Taj Mahal, there need to be income and company tax cuts and there needs to be just less government.
We never really needed the Commonwealth taxing people in NSW to build sporting club toilet blocks in Queensland. But now we can no longer afford it.