Millions face shift into higher tax brackets

    David Uren
    The Australian
    April 04, 2014


INDIVIDUAL taxpayers will be slugged at least $32.5 billion more a year and the number of people in the top two tax brackets will double to 4.6 million over the next decade unless there is a new round of personal income tax cuts.      :-?

Analysis carried out exclusively for The Australian by the University of Canberra National Centre for Social and Economic Modelling underlines the urgent need for tax reform.

The analysis shows that, in the absence of tax cuts, the number of people paying the top tax rate of 45c in the dollar would soar by 134 per cent over the next decade to just under 900,000 as they were pushed into higher tax brackets by inflation and wage rises — so-called bracket creep.

The number of Australians paying the second-highest rate of 37c in the dollar would leap 85 per cent to 3.7 million.

And the effect of people being pushed into higher tax brackets would increase total personal ­income tax by 21 per cent or $32.5 billion, before allowing for growth in the population and workforce.

NATSEM principal research fellow Ben Phillips said the ­effects of this “fiscal drag” over 10 years would “likely have bad consequences for workforce participation at exactly the same time as Australia pushes up against an ageing population”.

With a crucial Senate election in Western Australia this weekend, politicians from both sides were ducking for cover yesterday in the wake of warnings from Treasury secretary Martin Parkinson that Australia could not rely on personal income tax to cover the budget gap and needed to consider the mix of taxes, including the GST and fuel excise.      :(

However, business leaders and economists said the issues raised by Dr Parkinson had to be confronted.

“Australia is in a productivity hole and tax reform is one of the important ways of improving productivity,” University of Melbourne’s John Freebairn said.

Wesfarmers chief executive Richard Goyder said the tax system had to be dealt with as a whole, with problems not simply solved by lifting the GST.

“Whatever we do on tax has to be holistic — it can’t be bits and pieces,” he said.

Medium-term budget forecasts provided by Joe Hockey’s office to state and territory treasurers last week, and included in a briefing note at the weekend, ­assume there are no personal ­income tax cuts for the next 10 years, with commonwealth revenue rising to an all-time high of 26 per cent of GDP. Even this would leave a budget deficit of 0.5 per cent of GDP.

The NATSEM modelling backed Dr Parkinson’s argument that failure to deliver personal ­income tax cuts would be damaging to the economy and carry a high political cost.

The analysis shows average tax rates would rise for all workers, but the impact would be greatest at the bottom end of the income spectrum. People earning $990 a week now, which is about the median income, would see their average tax rate jump from 8 per cent to 15 per cent.

Professor Freebairn said that this was exactly the income zone where social benefits were being withdrawn, so the result would be “horrendous” effective marginal tax rates that would stop people entering the workforce.

The number of people paying no tax would drop by 44 per cent to 2.9 million, with growing numbers of people having to return some of the government benefits they receive as tax.

A spokeswoman for Joe Hockey said that while the Treas­urer was aware of the broad content of Dr Parkinson’s speech, he had not approved it, adding: “The views are Dr Parkinson’s own.”

Foreign Minister Julie Bishop, who is supporting the government’s election campaign in her home state of Western Australia, was the only minister to field media questions on tax yesterday. She said the government had no plans to increase either the GST or fuel excise.

“We’re not a government that believes in higher taxes,” she told ABC Radio. She said the GST was an issue for the state governments, not the commonwealth.

Labor Treasury spokesman Chris Bowen said he was prepared to be constructive in a debate about tax reform, but added: “We don’t support increasing the GST or increasing petrol excise”. Mr Bowen noted Dr Parkinson’s comments about the need to stop the long-term decline in the share of indirect taxes, including the GST, had been excised from the version he actually delivered to the Sydney Institute on Wednesday night, suggesting he had been censored by Mr Hockey, ­although they were included in the version of the speech posted on the Treasury website.

Dr Parkinson’s speech showed that, unless there is tax ­reform, personal income tax will rise from 49 per cent of all ­government tax revenue to 56 per cent, while the share of ­indirect taxes and the GST will fall from 29 per cent to 21 per cent.

Business Council of Australia chief executive Jennifer Westacott said Australia had to stop the political point-scoring over tax and have a mature discussion.

“We have to start thinking long-term and face up to the fact that our tax system needs an overhaul and our budget needs serious ­repair,” she said.

That means ­reprioritisation and a structural change to spending patterns.”

The University of NSW’s Chris Evans said any debate about tax ought to include the automatic indexation of tax thresholds. “Politicians don’t like indexation because it restricts their largesse in handing out tax cuts, but the United Kingdom has managed to do it.”

Professor Freebairn said the Henry tax review had found that some of the most inefficient state taxes cost the economy as much as 80c for every dollar they collected. In the case of personal ­income tax, it was still between 30c and 40c, while GST was much more efficient, costing the economy only 10c for every ­dollar.

“Changing the tax mix from (income taxes to indirect taxes) brings gains of 20c to 30c in the dollar and that beats anything that a major corporation could do on productivity,” he said.

Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::)

Armchair_Politician wrote on Apr 4^th, 2014 at 9:10am:

Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::)

they want those who dont work to be paid more... so guess who will pay for that??....and then who whinges the loudest when it comes to tax increases.......who will belly ache the longest if they increase the GST????

Quote:

Will Australians Have To Pay More Tax.

If by 'Australians' you mean the poor, then the answer is yes. If you mean the rich then we all know that the Liberlas are all about lower taxes for the rich.

We will have to pay more tax in order to pay for Abbott's harebrained baby bonus for billionaires scheme.

We will have to pay more tax to cover the gap created by Abbott's harebrained scheme to scrap the mining and carbon taxes.

We will have to pay more tax to fix the hole created in revenue streams when Howard scrapped the petrol excise.

What we can expect under Abbott is tax by stealth on the poor by bracket creep which means more poor Australians will be forced to pay higher rates of tax as Abbott refuses to raise tax brackets in line with inflation.

We can expect outright tax increases on the poor by Abbott's plan to increase the GST.

Suffer the poor under Abbott.

Yes True that's right.  Always look after the well off, and the big end of town.  Its the liberal way.      :(

I dont mind paying more tax, but I would like to be sure we have a government that has the right priorities when spending my tax.
The left are irresponsible spenders of tax, I no like dat.

I would rather we had tax on spend i.e. GST than tax on earnings.
I see people who arrange their earning to avoid earning enough to pay tax, thats not good for the country.

Income tax is a tax on working, people who can work should work.
Then if we direct the welfare to the genuine only we can compensate for the tax on spend GST.

wrote on Apr 4^th, 2014 at 8:55am:

Quote: Foreign Minister Julie Bishop, who is supporting the government’s election campaign in her home state of Western Australia, was the only minister to field media questions on tax yesterday. She said the government had no plans to increase either the GST or fuel excise. “We’re not a government that believes in higher taxes,” she told ABC Radio. She said the GST was an issue for the state governments, not the commonwealth.

Bishop should not comment on matters outside her portfolio. The GST is a Federal act of Parliament, not a state tax. Bishop is either clueless or a liar.

I cant stand Bishop, but West Australians have every rite to talk about GST

cods wrote on Apr 4^th, 2014 at 9:17am:

Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) they want those who dont work to be paid more... so guess who will pay for that??....and then who whinges the loudest when it comes to tax increases.......who will belly ache the longest if they increase the GST????

Who are the people who don't work; does it include all the retirees?
As far as the young unemployed are concerned, unfortunately the job opportunities are disappearing faster, than new jobs are created, partly by technology or jobs being shifted to countries where starvation wages are paid to low income workers, yet some of this countries have more billionaires than ever before.
As far as tax rates are concerned, in the seventies, the worker on average wage was paying 45-50% rate, and I can't remember people knocking back overtime work; rather fighting often to work 60 hours a week.
There is too much bullshit being peddled around by politicians, supported well by the media.

Armchair_Politician wrote on Apr 4^th, 2014 at 9:10am:

Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::)

Well - if the government owned the services they would pay for themselves . . . . .

SOB

miketrees wrote on Apr 4^th, 2014 at 10:49am:

I dont mind paying more tax, but I would like to be sure we have a government that has the right priorities when spending my tax. The left are irresponsible spenders of tax, I no like dat. I would rather we had tax on spend i.e. GST than tax on earnings. I see people who arrange their earning to avoid earning enough to pay tax, thats not good for the country. Income tax is a tax on working, people who can work should work. Then if we direct the welfare to the genuine only we can compensate for the tax on spend GST.

Its not either/or though is it. Its BOTH taxes we get

SOB

Actually both would be good,
If we just had the two we would be laughing.
We have a raft of other taxes glueing up the system and only contributing about 10% of tax revenue.

Two is great.

True Colours wrote on Apr 4^th, 2014 at 10:33am:

Quote: Will Australians Have To Pay More Tax. If by 'Australians' you mean the poor, then the answer is yes. If you mean the rich then we all know that the Liberlas are all about lower taxes for the rich. We will have to pay more tax in order to pay for Abbott's harebrained baby bonus for billionaires scheme. We will have to pay more tax to cover the gap created by Abbott's harebrained scheme to scrap the mining and carbon taxes. We will have to pay more tax to fix the hole created in revenue streams when Howard scrapped the petrol excise. What we can expect under Abbott is tax by stealth on the poor by bracket creep which means more poor Australians will be forced to pay higher rates of tax as Abbott refuses to raise tax brackets in line with inflation. We can expect outright tax increases on the poor by Abbott's plan to increase the GST. Suffer the poor under Abbott.

Fair dinkum where do you get that ridiculous garbage from?

The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts.  ::) ::) ::) ::)

Swagman wrote on Apr 4^th, 2014 at 12:37pm:

True Colours wrote on Apr 4th, 2014 at 10:33am: Quote: Will Australians Have To Pay More Tax. If by 'Australians' you mean the poor, then the answer is yes. If you mean the rich then we all know that the Liberlas are all about lower taxes for the rich. We will have to pay more tax in order to pay for Abbott's harebrained baby bonus for billionaires scheme. We will have to pay more tax to cover the gap created by Abbott's harebrained scheme to scrap the mining and carbon taxes. We will have to pay more tax to fix the hole created in revenue streams when Howard scrapped the petrol excise. What we can expect under Abbott is tax by stealth on the poor by bracket creep which means more poor Australians will be forced to pay higher rates of tax as Abbott refuses to raise tax brackets in line with inflation. We can expect outright tax increases on the poor by Abbott's plan to increase the GST. Suffer the poor under Abbott. Fair dinkum where do you get that ridiculous garbage from? The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts.  ::) ::) ::) ::)

Of course the poor pay tax - did you mean the unemployed or something?

SOB

Define 'poor' Borg?

I blame  Norman Lindsay for most of Australia's problems.

Swagman wrote on Apr 4^th, 2014 at 12:37pm:

True Colours wrote on Apr 4th, 2014 at 10:33am: Quote: Will Australians Have To Pay More Tax. If by 'Australians' you mean the poor, then the answer is yes. If you mean the rich then we all know that the Liberlas are all about lower taxes for the rich. We will have to pay more tax in order to pay for Abbott's harebrained baby bonus for billionaires scheme. We will have to pay more tax to cover the gap created by Abbott's harebrained scheme to scrap the mining and carbon taxes. We will have to pay more tax to fix the hole created in revenue streams when Howard scrapped the petrol excise. What we can expect under Abbott is tax by stealth on the poor by bracket creep which means more poor Australians will be forced to pay higher rates of tax as Abbott refuses to raise tax brackets in line with inflation. We can expect outright tax increases on the poor by Abbott's plan to increase the GST. Suffer the poor under Abbott. Fair dinkum where do you get that ridiculous garbage from? The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts.  ::) ::) ::) ::)

That is a lie designed to whip up false outrage at a situation that does not exist.

HINT: GST = Goods and Services Tax

The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts

"Factor in handouts" see you missed that bit.

Swagman wrote on Apr 4^th, 2014 at 1:56pm:

Define 'poor' Borg?

Ppl that dont earn enough to pay their bills (rent electricity food etc) - and yet some dont get any money from the government.

SOB

miketrees wrote on Apr 4^th, 2014 at 3:42pm:

The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts "Factor in handouts" see you missed that bit.

So you think ALL poor ppl get money from the government? Is that what you are saying? What about the ppl that work for councils for the minimum wage that is so low they cant pay their rent etc? what about ppl that are rejected by centerlink but they dont earn any money?

SOB

The irony is that hardly anyone will be working, but the ones that are will be paying BIG tax, but looking on the bright side, we'll have nice gardens....all the better to sleep in.

Sir Spot of Borg wrote on Apr 4^th, 2014 at 3:53pm:

miketrees wrote on Apr 4th, 2014 at 3:42pm: The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts "Factor in handouts" see you missed that bit. So you think ALL poor ppl get money from the government? Is that what you are saying? What about the ppl that work for councils for the minimum wage that is so low they cant pay their rent etc? what about ppl that are rejected by centerlink but they dont earn any money? SOB

COUNCIL WORKER  ;D ;D ;D ;D ;D   BULLSHYTE   ;D ;D ;D

woody2014 wrote on Apr 4^th, 2014 at 4:11pm:

Sir Spot of Borg wrote on Apr 4th, 2014 at 3:53pm: miketrees wrote on Apr 4th, 2014 at 3:42pm: The poor pay NO tax.  They don't even pay GST if you factor in Govt handouts "Factor in handouts" see you missed that bit. So you think ALL poor ppl get money from the government? Is that what you are saying? What about the ppl that work for councils for the minimum wage that is so low they cant pay their rent etc? what about ppl that are rejected by centerlink but they dont earn any money? SOB COUNCIL WORKER  ;D ;D ;D ;D ;D   BULLSHYTE   ;D ;D ;D

What are you talking about? Are you saying there are no council workers? Are you saying council workers make enough to pay rent? Are you saying they can get the dole? What?

SOB

Armchair_Politician wrote on Apr 4^th, 2014 at 9:10am:

Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::)

What about a lowering the costs for services?

ie
paying public servants less money.

Reduce all public servant wages by 10% to 25% -
whatever is required to reduce costs.

The problem with our society is that the people at the coal face actually
making money in real businesses are the only ones paying real taxes -
all the others are like parasites sucking their blood.

Bobby. wrote on Apr 6^th, 2014 at 6:53am:

Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) What about a lowering the costs for services? ie paying public servants less money. Reduce all public servant wages by 10% to 25% - whatever is required to reduce costs. The problem with our society is that the people at the coal face actually making money in real businesses are the only ones paying real taxes - all the others are like parasites sucking their blood.

Here we go again. The majority of public servants earn less money than anyone else. Teachers, cops, council workers, road workers, nurses, etc . . . .

SOB

Sir Spot of Borg wrote on Apr 6^th, 2014 at 7:10am:

Bobby. wrote on Apr 6th, 2014 at 6:53am: Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) What about a lowering the costs for services? ie paying public servants less money. Reduce all public servant wages by 10% to 25% - whatever is required to reduce costs. The problem with our society is that the people at the coal face actually making money in real businesses are the only ones paying real taxes - all the others are like parasites sucking their blood. Here we go again. The majority of public servants earn less money than anyone else. Teachers, cops, council workers, road workers, nurses, etc . . . . SOB

No they don't - public servants are on a good wicket.

Private industry - the people actually making the money -
are paid less & less due to unemployment -
it's an employers market.

Public servants are roaring ahead of the private sector.
If a public servant lost their job they would have to accept far less money from private industry.

The real problem is the power of public service unions.
The Govt. doesn't want to take them on -
because Tony Abbott now & Kevin Rudd/ Gillard in the past are all gutless.

Imagine if Abbott told public servants that they would all have to accept  a 10% pay cut to save his budget?

There would be wide spread strikes & chaos.

Public servants are paid out of borrowed money.

Sir Spot of Borg wrote on Apr 4^th, 2014 at 12:14pm:

Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) Well - if the government owned the services they would pay for themselves . . . . . SOB

Not necessarily true. A government-run service generally costs more than the same service provided by the private sector. This is basically because of the desire to reduce wasteful spending as far as possible in the private sector so as to increase profits, while a government-run service has no such needs and therefore little motivation to reduce wasteful spending or find more cost-effective ways of delivering services.

Bobby. wrote on Apr 6^th, 2014 at 7:29am:

Sir Spot of Borg wrote on Apr 6th, 2014 at 7:10am: Bobby. wrote on Apr 6th, 2014 at 6:53am: Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) What about a lowering the costs for services? ie paying public servants less money. Reduce all public servant wages by 10% to 25% - whatever is required to reduce costs. The problem with our society is that the people at the coal face actually making money in real businesses are the only ones paying real taxes - all the others are like parasites sucking their blood. Here we go again. The majority of public servants earn less money than anyone else. Teachers, cops, council workers, road workers, nurses, etc . . . . SOB No they don't - public servants are on a good wicket. Private industry - the people actually making the money - are paid less & less due to unemployment - it's an employers market. Public servants are roaring ahead of the private sector. If a public servant lost their job they would have to accept far less money from private industry. The real problem is the power of public service unions. The Govt. doesn't want to take them on - because Tony Abbott now & Kevin Rudd/ Gillard in the past are all gutless. Imagine if Abbott told public servants that they would all have to accept  a 10% pay cut to save his budget? There would be wide spread strikes & chaos. Public servants are paid out of borrowed money.

Certainly the case under Labor over the previous six years but not the case under Howard once he paid off Keatings' $96bn debt.

Hi Armchair - I am glad you agree with me.

Armchair_Politician wrote on Apr 6^th, 2014 at 7:40am:

Sir Spot of Borg wrote on Apr 4th, 2014 at 12:14pm: Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) Well - if the government owned the services they would pay for themselves . . . . . SOB Not necessarily true. A government-run service generally costs more than the same service provided by the private sector. This is basically because of the desire to reduce wasteful spending as far as possible in the private sector so as to increase profits, while a government-run service has no such needs and therefore little motivation to reduce wasteful spending or find more cost-effective ways of delivering services.

Not necessarily true. Privatisation often ends up costing more. Too often the insatiable greed of the profit motive inevitably sees the greedy private owners increase prices by adding a hidden "profit tax". This is especially prevalent when privatisation is not accompanied by competition.

You only have to look at how sharply the price of electricity has risen in the past ten years to see the truth of this.

There is only one possible answer and that is YES!

The major reasons being -
1) Demographics
in 1950 the worker to no worker ratio was around 8/1, But by 2050 that ratio will be around 2/1.
2) There has been a very noticeable lack of appropriate action by Politicians to cope with our changing Demographics.

So, with a massive turn around in the worker to non worker ratio, IT IS OBVIOUS THAT TAXES WILL INCREASE FOR THOSE REMAINING WORKERS!

So, with a massive turn around in the worker to non worker ratio, IT IS OBVIOUS THAT TAXES WILL INCREASE FOR THOSE REMAINING WORKERS!

Thank you PN.

I get quite depressed reading this forum because most people here are just bigoted to the left or the right and fail to see any big pictures.
Well most of them are just stupid.
Most depressing is that these are people that vote.

Armchair_Politician wrote on Apr 4^th, 2014 at 9:10am:

Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::)

That might be a fair point except for the obvious privatisation push. What are extra taxes paying for again if "services' have been privatised...?

Awks I know...

Armchair_Politician wrote on Apr 6^th, 2014 at 7:43am:

Bobby. wrote on Apr 6th, 2014 at 7:29am: Sir Spot of Borg wrote on Apr 6th, 2014 at 7:10am: Bobby. wrote on Apr 6th, 2014 at 6:53am: Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) What about a lowering the costs for services? ie paying public servants less money. Reduce all public servant wages by 10% to 25% - whatever is required to reduce costs. The problem with our society is that the people at the coal face actually making money in real businesses are the only ones paying real taxes - all the others are like parasites sucking their blood. Here we go again. The majority of public servants earn less money than anyone else. Teachers, cops, council workers, road workers, nurses, etc . . . . SOB No they don't - public servants are on a good wicket. Private industry - the people actually making the money - are paid less & less due to unemployment - it's an employers market. Public servants are roaring ahead of the private sector. If a public servant lost their job they would have to accept far less money from private industry. The real problem is the power of public service unions. The Govt. doesn't want to take them on - because Tony Abbott now & Kevin Rudd/ Gillard in the past are all gutless. Imagine if Abbott told public servants that they would all have to accept  a 10% pay cut to save his budget? There would be wide spread strikes & chaos. Public servants are paid out of borrowed money. Certainly the case under Labor over the previous six years but not the case under Howard once he paid off Keatings' $96bn debt.

That is simple party Politics!

The facts are  -
1) Labor introduced the Super Guarantee, which did make an attempt to increase us catering for our own Retirement.
2) The Liberals did make substantial inroads into Government Debt.

The period from the early 1980's to around 2006, saw the best Economic conditions in the modern Economic era and the best time during that period was from around 1996-2006 and this is again mainly due to Demographics.

But, neither Labor, nor Liberal went anywhere near far enough to properly cater for what was or should have been obvious, even as far back as the 70's or 80's!

Further and with regard to the "private sector" there is no definitive evidence that;

a) Privatisation is consistently more efficient or for that matter keeps costs down.

b) That all Government services are inefficient and not cost effective.

Bottom line in the privatisation push is that there is most definitely no one size fits all solution.

Sadly neither Government nor the private sector are too concerned with honesty or integrity to actually be truthful about this.

Well run Public Assets are an effective revenue raiser for the Government, thus, making the need for increased taxes no so urgent. Further, the more that becomes privatised, the less necessary Government is.

Why would tax increases be appropriate in this kind of socio economic climate?

Swagman wrote on Apr 4^th, 2014 at 1:56pm:

Define 'poor' Borg?

small business owner - very poor person, much poorer than unemployed

small business owner - very poor person, much poorer than unemployed

But you do get that warm fuzzy feeling that you have contributed to some one elses retirement before you have looked after your own.

miketrees wrote on Apr 6^th, 2014 at 11:57am:

small business owner - very poor person, much poorer than unemployed But you do get that warm fuzzy feeling that you have contributed to some one elses retirement before you have looked after your own.

no, you have this screechy feeling in your back, always worrying about its durability and longevity. The last thing you think about is someone else's back, you just don't have that precious spare time... if you know what I am talking about...
today all I am thinking about is about tomorrow, what type of customers will present what problems, will employee take another sick leave? Will my landlord raise the rent? Will petrol shoot up the roof? What are my budgeted costs, can I afford another increase in GST? Can I afford to lose another customer due to competition? Will my employees ask for a rise in their wages because of the increase? Will I be downsizing and working extra 10 hours a week?
Do I really have time to worry about anything else?

Slash public service wages by at least 10% rather than raise taxes.

Bam wrote on Apr 6^th, 2014 at 10:55am:

Armchair_Politician wrote on Apr 6th, 2014 at 7:40am: Sir Spot of Borg wrote on Apr 4th, 2014 at 12:14pm: Armchair_Politician wrote on Apr 4th, 2014 at 9:10am: Not necessarily - you can go with a reduction in services. Seriously, how do you expect to have services if taxes aren't collected to pay for them?  ::) Well - if the government owned the services they would pay for themselves . . . . . SOB Not necessarily true. A government-run service generally costs more than the same service provided by the private sector. This is basically because of the desire to reduce wasteful spending as far as possible in the private sector so as to increase profits, while a government-run service has no such needs and therefore little motivation to reduce wasteful spending or find more cost-effective ways of delivering services. Not necessarily true. Privatisation often ends up costing more. Too often the insatiable greed of the profit motive inevitably sees the greedy private owners increase prices by adding a hidden "profit tax". This is especially prevalent when privatisation is not accompanied by competition. You only have to look at how sharply the price of electricity has risen in the past ten years to see the truth of this.

Electricity has risen so much because it was privatised

SOB

Of course - we all know that once a government divests itself, by  :D 'privatisation', of the infrastructure that not only provides employment, but a standard of income for that government itself - it is left with no other option to continue is fanciful forays into fictitious fallacies of policy than to take more directly from the people.

They certainly won't be cutting out any of their personal lovefest policies and ideas, will they?

How else are they going to raise the money to feed us their endless lines?  Through unlimited borrowing.....???  ;D

Of COURSE they're going to suck you dry -but remember - it is ONLY in the cycle of taxation, so whatever they put up as the 'mouthpiece' or 'front person' for their tax jihad - it is only a mask to cover the whole gamut of REAL taxing that goes on behind the scenes.

As long as they can make us believe that 'income tax' and 'GST' are the primary issues of taxation - and not the endless gamut of taxes inherent in their style of government - they can con us for all it's worth.

The greatest trick the Devil ever pulled was to make the world believe he didn't exist.


https://www.youtube.com/watch?v=9MjV4EwR7Mg

BTW:-  Every time your GST goes up - so do, indirectly, the other taxes etc that accrue to every purchase you make.

That is the devil in the GST - the one they convinced us didn't exist.  That is why I fairly label GST inflationary and progressive - it pervades every avenue of economic activity and thus returns to government, through sneaky back doors of adding to other tax burdens - far more than 10% (or whatever).  That's 10% on every part of a transaction - every time.