May 22, 2012

Fantasy budget: Richard Denniss on broadening the tax base

Last week Crikey's Bernard Keane designed his fantasy budget -- setting priorities based on economic sense and community need alone. Today, Richard Denniss offers an alternative ...

Last week Crikey‘s Bernard Keane designed his fantasy budget — setting priorities based on economic sense and community need alone. Today, Richard Denniss offers an alternative …

It would be very easy in a “fantasy budget” to outline a raft of spending initiatives to “make Australia a better place”. But I want to talk about collecting more tax. Because until those campaigning for a fairer society that treads more lightly on the natural environment put as much effort into tax policy as they do to communications strategy, they are doomed to fail.

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7 thoughts on “Fantasy budget: Richard Denniss on broadening the tax base

  1. Gavin Moodie

    A very good start. I would add that Australia should join the rest of the OECD and revive its probate tax.

  2. Mark from Melbourne

    I like the thinking behind this. Simple, direct and egalitarian.

  3. FelineCyclist

    This is brilliant in its simplicity and logic. It also serves to demonstrate how selfishness and vested interests prevent genuine law reform that will help the nation as a whole.

    Can you imagine how certain media outlets would report such reforms? “Doubling Your Taxes” with a picture of a mum and dad couple standing in front of their investment property that was going to ‘fund their children’s education and their retirneent’ because ‘they don’t want to be a burden on the taxpayer; they believe in paying their own way’.

    Voters would eat it up and smash the government for proposing it, ignorant in the fact that they pay for the inefficiencies of the current system and would by and large gain more from the projects at would be funded by the changes.

  4. Blaggers

    Polluter pays. What it should always have been.


    Tax capital gains like other income? (OMG, what would Romney say?)

    If the cry of “class warfare” goes up on such small beer as means testing the health insurance rebate, just imagine what this would induce?

    The tax system is designed to be optional for the rich, that’s the way it works, and any notion that its intention is to ‘trickle down’ wealth is blown out of the water by the facts i.e. it actually syphons wealth upwards. (Yes, in the tax system, gravity is reversed.)

    Now, that is real class warfare.

  6. Dogs breakfast

    “Step one is to abolish John Howard’s arbitrary decision to tax capital gains at half the rate of other income.”

    Brilliant. I haven’t read an economist who supports this, but I have read a lot of wealthy people masquerading as disinterested observers supporting it. The rationale never existed, other than in Howard’s ‘aspirationals’ theorem, which I still doubt strongly.

    “Step two is to abolish the bizarre notion that income from superannuation should be tax free.”

    I can’t remember who it was, may have been Chris Richardson, who rightly derided this as the worst government economic decision of the last quarter century. He was being generous.

    “With a white sheet of paper surely we wouldn’t repeat the decision to give the biggest polluters 94.5% of their pollution permits for free? ”

    Oh yeah, this one beggars belief, except for the fact that this was the better of the two options looked at, and still the business community and the opposition have squealed like stuck pigs. Imagine if you actually did tax them according to how much they put out rather than this ridiculous free for all.

    Submarines, yep, building them here was jingoistic throwing away of billions of dollars, as was buying the Joint Strike Fighter that can’t fly, while there are better and cheaper planes on the market now.

    A worthy contribution Richard.

  7. Dogs breakfast

    “We had spent 20 years moving towards a simplified, harmonised system that reduced incentives to “financially engineer” ordinary income into more tax effective forms of income.”

    This is right at the nub of it, and Howard and Costello moved away from that.

    Anyone for negative gearing while we’re at it, surely the greatest distortion in the economy at the moment along with the capital gains tax rort.

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