“John
Howard is being urged by his back bench to lift the tax-free threshold
and reduce the tax rates paid by low-income earners to boost
employment,” The Australian reports today. Why should people miles below the poverty line pay tax? It’s an absurdity.

Why
should we waste money collecting tax from lower income earners and
paying public servants to give some of it back to them? What is Liberal
about that? Where’s the economic efficiency – let alone the social
justice? The easiest and the most progressive way to give tax cuts to
everyone is to raise the tax threshold from its current pitiful $6,000.
Andrew Murray says the Democrats are ready to deal. That means the
legislation doesn’t need to wait until 1 July. John Howard and Peter
Costello could get it through the Senate before the ink is dry on the
bill.

So why won’t they? It’s yet another admission – like the
Prime Minister’s, the Treasurer’s and Finance Minister Nick Minchin’s
response to last week’s OECD report saying the total percentage of tax
taken by Canberra has been increasing since 1996 is misleading because
it does not include the Commonwealth’s family tax benefit – that the
Howard Government survives by reaping record revenue from the GST and
handing some back to carefully selected demographics in extravagant
expenditure, regardless of the policy and economic implications. If
Malcolm Turnbull, Sophie Panopoulos and Mitch Fifield fess up to this,
then we can have a real tax debate.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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