When governments do as they please, just follow their noses and spend their easy money from taxpayers in failure policies, shouldn't we take stock of their efficacy?

Are modern governments an anachronism? Are they a modern aristocratic class exacting money from their surfs and squandering it hither an thither? Does their constant interference and overreach cause more harms than goods?

Here is a case in point:

"$20 billion spend backfires

A decade-long effort involving tens of billions of taxpayer dollars has failed to solve our housing crisis. This is why....


Australian governments’ multi-billion dollar efforts to help first homebuyers enter the property market have been hampered by a glaring flaw, which has only pushed up house prices and left those in greatest need of assistance at an even worse disadvantage.

That was the key takeaway from fresh research published by the Australian Housing and Urban Research Institute this week.

Scholars from the University of New South Wales, University of Sydney and RMIT University, with funding from the federal, state and territory governments, examined the suite of first homebuyer assistance schemes in Australia and compared them to measures adopted in seven other nations: the United Kingdom, Germany, Ireland, the Netherlands, Canada, Finland and Singapore.

They found that Australia’s first homebuyer policies were “extremely one-sided”, with the overwhelming majority of programs focusing on demand instead of supply.

And by pumping up demand without simultaneously addressing supply, those programs have caused higher prices.

Some first homebuyers have benefited – mainly those who were already close to being able to afford houses on their own – as have existing homeowners and property investors.

However the bulk of would-be first homebuyers have been left behind..."

https://www.news.com.au/finance/economy/australian-economy/glaring-flaw-in-australias-housing-policies-exposed-as-20-billion-spend-backfires/news-story/48f2e23d2e6e2c7ae4616c82bd37fa5b


Decades with the best brains at their fingertips and they were apparently clueless about the dynamics of supply and demand.

What are your thoughts?

Linus wrote on Jul 10^th, 2022 at 1:01pm:

When governments do as they please, just follow their noses and spend their easy money from taxpayers in failure policies, shouldn't we take stock of their efficacy? Are modern governments an anachronism? Are they a modern aristocratic class exacting money from their surfs and squandering it hither an thither? Does their constant interference and overreach cause more harms than goods? Here is a case in point: "$20 billion spend backfires A decade-long effort involving tens of billions of taxpayer dollars has failed to solve our housing crisis. This is why.... Australian governments’ multi-billion dollar efforts to help first homebuyers enter the property market have been hampered by a glaring flaw, which has only pushed up house prices and left those in greatest need of assistance at an even worse disadvantage. That was the key takeaway from fresh research published by the Australian Housing and Urban Research Institute this week. Scholars from the University of New South Wales, University of Sydney and RMIT University, with funding from the federal, state and territory governments, examined the suite of first homebuyer assistance schemes in Australia and compared them to measures adopted in seven other nations: the United Kingdom, Germany, Ireland, the Netherlands, Canada, Finland and Singapore. They found that Australia’s first homebuyer policies were “extremely one-sided”, with the overwhelming majority of programs focusing on demand instead of supply. And by pumping up demand without simultaneously addressing supply, those programs have caused higher prices. Some first homebuyers have benefited – mainly those who were already close to being able to afford houses on their own – as have existing homeowners and property investors. However the bulk of would-be first homebuyers have been left behind..." https://www.news.com.au/finance/economy/australian-economy/glaring-flaw-in-australias-housing-policies-exposed-as-20-billion-spend-backfires/news-story/48f2e23d2e6e2c7ae4616c82bd37fa5b Decades with the best brains at their fingertips and they were apparently clueless about the dynamics of supply and demand. What are your thoughts?

When those first home buyer grants came in… sure it encouraged many to go forth and commit to buying a home… but this is where the grants started a boom in real estate… prices went up…as a unit builder we know… said if a $10K grant is made for buyers by the governgivernment … he just ups his unit prices $10K.

Remove the first-home-buyers grant and just go back to the way it was, let the market sort it out

If there was a genuine need, the government could easily reduce the cost of housing by cutting red tape and minimum standards, and councils freeing up land for development.

To even start to solve our housing crisis they need to completely overhaul negative gearing and capital gain tax rules.


But don't hold your breath,  after shortens losing an unlosable election with just some minor proposed changes, i doubt anyone will do anything other than tinker around the edges anytime soon ...

What hurts is that stamp duty! Ouch it smarts. That needs overhauling!
With house pricing being lower in past years it was still ouch … but with boom prices of now… it’s more than ouch…. and I think there should be a cap limit to what stamp duty should be….
I went to a auction in Mornington a few months back… as did 100 others for a sticky beak ….magnificent house with bay views… omg … well it sold for over $11 million … and Vic stamp duty … a whopping $698,739.40 !!!
That’s absolute robbery!

The average seems to be about $1.8 mil selling lately like hot cakes… S/D is $102,730.40… for nothing! Just a piece of paper changing ownership names.

It’s BS… the grabberment has had it so damned good for too long and still carry on about the deficit…  and still want to tax us more!
I’m not impressed…at all!

**

Sophia wrote on Jul 10^th, 2022 at 2:50pm:

What hurts is that stamp duty! Ouch it smarts. That needs overhauling!

they've started with it. Now you can opt to pay stamp duty in one lump sum like before, or pay land tax annually.

John Smith wrote on Jul 10^th, 2022 at 2:52pm:

Sophia wrote on Jul 10th, 2022 at 2:50pm: What hurts is that stamp duty! Ouch it smarts. That needs overhauling! they've started with it. Now you can opt to pay stamp duty in one lump sum like before, or pay land tax annually.

Yeah right… I heard that… sure they give with one hand and take with another hand.
I’d like to see the calculations of land tax… since it goes on council value….
And it’s levied every year to pay land tax for as long as you live in that house. Whereas stamp duty is a one of payment… but… there’s a difference between the devil and deep blue sea?

Sophia wrote on Jul 10^th, 2022 at 2:54pm:

Yeah right… I heard that… sure they give with one hand and take with another hand.

you want the govt. to provide services? they need taxes to pay for those services.


Sophia wrote on Jul 10^th, 2022 at 2:54pm:

And it’s levied every year to pay land tax for as long as you live in that house.

not just for as long as you live in that house, but for as long as anyone lives in that house from that point on. Once you opt for land tax on a house, it can never go back the other way, no matter how many times it's sold

Irrespective of what options they put, the amounts of tax needs to be adjusted. Where they used to collect 10 - 15k per house on a sale, now they collect 50 - 100k ... it's ridiculous.

John Smith wrote on Jul 10^th, 2022 at 3:01pm:

Sophia wrote on Jul 10th, 2022 at 2:54pm: Yeah right… I heard that… sure they give with one hand and take with another hand. you want the govt. to provide services? they need taxes to pay for those services. Sophia wrote on Jul 10th, 2022 at 2:54pm: And it’s levied every year to pay land tax for as long as you live in that house. not just for as long as you live in that house, but for as long as anyone lives in that house from that point on. Once you opt for land tax on a house, it can never go back the other way, no matter how many times it's sold Irrespective of what options they put, the amounts of tax needs to be adjusted. Where they used to collect 10 - 15k per house on a sale, now they collect 50 - 100k ... it's ridiculous.

It’s the way money is managed or mismanaged. It seems the strong intent is to be in debt forever.  I’m still not impressed.

Sophia wrote on Jul 10^th, 2022 at 3:16pm:

It’s the way money is managed or mismanaged. It seems the strong intent is to be in debt forever.  I’m still not impressed.

there's a lot of waste in govt. spending. Cutting staff and then hiring the same number of people using employment agencies that then cost you more, or paying consultants that cost you 5 times what it would have cost you to employ someone full time, is just some examples

John Smith wrote on Jul 10^th, 2022 at 3:01pm:

you want the govt. to provide services? they need taxes to pay for those services.

That might work in the big cities, but not in the bush necessarily. Values are low out here, which means stamp duty is also low, which in turn means very little to spend on services. That's why schools are few and far between and many miles away for parents to drops kids off

Same with hospitals, get real sick, and you could find yourself being transported to a hospital hundreds of Ks away, literally

Everything these days is a bit if a joke - bring on the Republic so we can get it all sorted out

I'm pretty sure the land and sales taxes would keep the prices down.


Quote:

That's why schools are few and far between and many miles away for parents to drops kids off

No, schools are far between because the students are far between. You will find there are far more schools per student in rural areas. You cannot expect to have the same services as the city without putting up with all the people.

Without going into any length, and not to derail the current discussion, I'd prefer that the whole taxation system gets scuttled and rolled over into an automated payment transactions tax.

That is, all current taxes at all levels of government get nixed and rolled over into this one transactions tax. And all tiers of government would be funded by it. Such tax would be automatically and anonymously deducted and  transferred to government coffers in real-time as you make an electronic transaction-receiving or spending. This can be as low as a fraction of cent  per dollar on each transaction. Over 90% of income and expenditure is electronic these days. And with a few tweaks, it would be 100% or very close to it.

This tax would be unobtrusive, broad-based,would free up a vast amount of resources tied up in administration and compliance, would stop governments using taxation as a political football, and frankly make everyone's life a lot easier.

Quote:

This can be as low as a fraction of cent  per dollar on each transaction.

How much revenue would that raise, compared to current taxes?

freediver wrote on Jul 10^th, 2022 at 3:30pm:

I'm pretty sure the land and sales taxes would keep the prices down. Quote: That's why schools are few and far between and many miles away for parents to drops kids off No, schools are far between because the students are far between. You will find there are far more schools per student in rural areas. You cannot expect to have the same services as the city without putting up with all the people.

Schooling is compulsory, the onus is on the government to provide public transport in the bush to travel long distances that are at present costing parents dollars using their own vehicles on third rate roads

There is also not enough polling booths, for me to vote, I need to travel to the next village for State, and to a far away town for Fed election, the nearest PO mail box is there too

Quote:

the onus is on the government

So if you move to a remote Island, the government is obliged to fly your kids back and forth to school every day? Or at least, a ride on a large boat?

Bias_2012 wrote on Jul 10^th, 2022 at 3:44pm:

freediver wrote on Jul 10th, 2022 at 3:30pm: I'm pretty sure the land and sales taxes would keep the prices down. Quote: That's why schools are few and far between and many miles away for parents to drops kids off No, schools are far between because the students are far between. You will find there are far more schools per student in rural areas. You cannot expect to have the same services as the city without putting up with all the people. Schooling is compulsory, the onus is on the government to provide public transport in the bush to travel long distances that are at present costing parents dollars using their own vehicles on third rate roads There is also not enough polling booths, for me to vote, I need to travel to the next village for State, and to a far away town for Fed election, the nearest PO mail box is there too

Sounds ideal… living far away from the madding crowds!

Getting back to what John write earlier… re: tax paying for government services…. I’m trying to recall which decade … 80s or 90s ? Where the government actually cutback on a lot of services… to pay the escalating debt… if I remember there were schools being closed down and sold off… I remember something about crowded class rooms…
Child health services that were closed and hence mums with new bubs travelled further for baby checks.
So in a way we put up with closures of many types of services to minimise debt…. Now I’m thinking… here we are decades later and it was all to no avail… we on more debt than ever.
I’m still unimpressed  >:(

Linus wrote on Jul 10^th, 2022 at 3:36pm:

Without going into any length, and not to derail the current discussion, I'd prefer that the whole taxation system gets scuttled and rolled over into an automated payment transactions tax. That is, all current taxes at all levels of government get nixed and rolled over into this one transactions tax. And all tiers of government would be funded by it. Such tax would be automatically and anonymously deducted and  transferred to government coffers in real-time as you make an electronic transaction-receiving or spending. This can be as low as a fraction of cent  per dollar on each transaction. Over 90% of income and expenditure is electronic these days. And with a few tweaks, it would be 100% or very close to it. This tax would be unobtrusive, broad-based,would free up a vast amount of resources tied up in administration and compliance, would stop governments using taxation as a political football, and frankly make everyone's life a lot easier.

sounds good to me. I've suggested something along those lines in the past

freediver wrote on Jul 10^th, 2022 at 3:42pm:

Quote: This can be as low as a fraction of cent  per dollar on each transaction. How much revenue would that raise, compared to current taxes?

From what I've read on it, it could easily be revenue neutral. Government will get what it needs to carry out its necessary functions. They'll be able to tweak the rate accordingly.

The APPT is an American idea and the actual rate will vary. But for the economist that proposed it  for the US, he determined that it could be as little as 0.3% on the dollar.

Here in Australia it could be as little as 0.5% on the dollar from one article I read some time ago. After each side of the transaction is taxed( the spending and receiving side), you're looking at 1c in the dollar going to government.

It's  low because the value of total transactions in the economy is huge.

I think the benefits of this solution far outweigh those of the current clunky, eclectic, burdensome, resource sucking, politicised system we have now.

Of course , it will probably dispense with  the need for heaps of public servants, accountants and lawyers involved in the current system. They can move into more useful areas. And it will stop politicians playing games with tax.

It might, therefore,have little prospect of seeing the light of day unless there's a popular outcry for it.  :( /  ;D

"When governments do as they please, just follow their noses and spend their easy money from taxpayers in failure policies, shouldn't we take stock of their efficacy?

Are modern governments an anachronism? Are they a modern aristocratic class exacting money from their surfs and squandering it hither an thither? Does their constant interference and overreach cause more harms than goods?"

Yes to all of the above.......

Linus wrote on Jul 10^th, 2022 at 4:39pm:

freediver wrote on Jul 10th, 2022 at 3:42pm: Quote: This can be as low as a fraction of cent  per dollar on each transaction. How much revenue would that raise, compared to current taxes? From what I've read on it, it could easily be revenue neutral.

Did you think about what you read?

Currently, you get paid. Depending on what you earn, you might pay 30% tax. Plus 10% into super. Plus medicare levy. When you spend the money, you pay about 10% GST. Plus other taxes and levies, depending on what you buy.

If all of this gets replaced by a tax of a 'fraction of' 1%, where is the rest going to come from?

Currently, the government collects 29% of GDP as tax.

freediver wrote on Jul 10^th, 2022 at 6:25pm:

Linus wrote on Jul 10th, 2022 at 4:39pm: freediver wrote on Jul 10th, 2022 at 3:42pm: Quote: This can be as low as a fraction of cent  per dollar on each transaction. How much revenue would that raise, compared to current taxes? From what I've read on it, it could easily be revenue neutral. Did you think about what you read? Currently, you get paid. Depending on what you earn, you might pay 30% tax. Plus 10% into super. Plus medicare levy. When you spend the money, you pay about 10% GST. Plus other taxes and levies, depending on what you buy. If all of this gets replaced by a tax of a 'fraction of' 1%, where is the rest going to come from? Currently, the government collects 29% of GDP as tax.

You're possibly missing that the same 29% would be collected over a trillion or more transactions. Every TRANSACTION of every person would be contributing every time their accounts are debited or credited. It will be maximally broad-based. Everyone who spends and receives a dollar will pay.

As the old Chinese proverb goes, many hands make like work.

Again, the benefits of an automatically collected single tax rate  on every transaction  in the economy is a hell of a lot better in my view than the eclectic, politicised, resource sucking system we have now.

Just look at the taxes you mentioned. Look at the wasted time and effort involved in administration and compliance activites-public and private, which could be spent productively elsewhere. Look at the ever growing encyclopedic tax laws and  regulations with virtually every kind of tax . Veritable minefields-CGT, FBT, GST, Payroll tax, Land tax etc, etc- not to mention the unnecessary intrusion into everyone's personal lives by big brother. All that could be dispensed with.




I







 

Linus wrote on Jul 10^th, 2022 at 7:31pm:

Everyone who spends and receives a dollar will pay.

as will anyone who sends money to offshore accounts, or brings money back in from their offshore accounts.

John Smith wrote on Jul 10^th, 2022 at 7:39pm:

Linus wrote on Jul 10th, 2022 at 7:31pm: Everyone who spends and receives a dollar will pay. as will anyone who sends money to offshore accounts, or brings money back in from their offshore accounts.

For sure. It will all be captured. And no one has to worry or fight over who pays or doesn't pay tax. Every dollar in motion will be contributing.

Also, such a tax would be skewed toward the rich as they embrace a disproportionate amount of an economy's transactions.

Linus wrote on Jul 10^th, 2022 at 7:31pm:

freediver wrote on Jul 10th, 2022 at 6:25pm: Linus wrote on Jul 10th, 2022 at 4:39pm: freediver wrote on Jul 10th, 2022 at 3:42pm: Quote: This can be as low as a fraction of cent  per dollar on each transaction. How much revenue would that raise, compared to current taxes? From what I've read on it, it could easily be revenue neutral. Did you think about what you read? Currently, you get paid. Depending on what you earn, you might pay 30% tax. Plus 10% into super. Plus medicare levy. When you spend the money, you pay about 10% GST. Plus other taxes and levies, depending on what you buy. If all of this gets replaced by a tax of a 'fraction of' 1%, where is the rest going to come from? Currently, the government collects 29% of GDP as tax. You're possibly missing that the same 29% would be collected over a trillion or more transactions. Every TRANSACTION of every person would be contributing every time their accounts are debited or credited. It will be maximally broad-based. Everyone who spends and receives a dollar will pay. As the old Chinese proverb goes, many hands make like work. Again, the benefits of an automatically collected single tax rate  on every transaction  in the economy is a hell of a lot better in my view than the eclectic, politicised, resource sucking system we have now. Just look at the taxes you mentioned. Look at the wasted time and effort involved in administration and compliance activites-public and private, which could be spent productively elsewhere. Look at the ever growing encyclopedic tax laws and  regulations with virtually every kind of tax . Veritable minefields-CGT, FBT, GST, Payroll tax, Land tax etc, etc- not to mention the unnecessary intrusion into everyone's personal lives by big brother. All that could be dispensed with.

If this tax came in, the first thing I would do is get the bank to combine all my accounts into one. Home loan, credit card, online transactions, ATM withdrawals etc. No more shifting large amounts of money between different accounts. So, where are all the extra transactions? I would get paid the same amount - tax down from over 30% to a fraction of 1%. I would buy the same things - tax down from over 10% to a fraction of 1%.

You are the only one saying it could be revenue neutral at that rate. And all you have said is that you "read it somewhere". Yet you have latched onto it like a religion. You are full of crap. No wonder John has taken an instant liking to you.


Quote:

Every TRANSACTION of every person would be contributing every time

It already is, when they get paid, and when they buy anything.

freediver wrote on Jul 10^th, 2022 at 8:32pm:

Linus wrote on Jul 10th, 2022 at 7:31pm: freediver wrote on Jul 10th, 2022 at 6:25pm: Linus wrote on Jul 10th, 2022 at 4:39pm: freediver wrote on Jul 10th, 2022 at 3:42pm: Quote: This can be as low as a fraction of cent  per dollar on each transaction. How much revenue would that raise, compared to current taxes? From what I've read on it, it could easily be revenue neutral. Did you think about what you read? Currently, you get paid. Depending on what you earn, you might pay 30% tax. Plus 10% into super. Plus medicare levy. When you spend the money, you pay about 10% GST. Plus other taxes and levies, depending on what you buy. If all of this gets replaced by a tax of a 'fraction of' 1%, where is the rest going to come from? Currently, the government collects 29% of GDP as tax. You're possibly missing that the same 29% would be collected over a trillion or more transactions. Every TRANSACTION of every person would be contributing every time their accounts are debited or credited. It will be maximally broad-based. Everyone who spends and receives a dollar will pay. As the old Chinese proverb goes, many hands make like work. Again, the benefits of an automatically collected single tax rate  on every transaction  in the economy is a hell of a lot better in my view than the eclectic, politicised, resource sucking system we have now. Just look at the taxes you mentioned. Look at the wasted time and effort involved in administration and compliance activites-public and private, which could be spent productively elsewhere. Look at the ever growing encyclopedic tax laws and  regulations with virtually every kind of tax . Veritable minefields-CGT, FBT, GST, Payroll tax, Land tax etc, etc- not to mention the unnecessary intrusion into everyone's personal lives by big brother. All that could be dispensed with. If this tax came in, the first thing I would do is get the bank to combine all my accounts into one. Home loan, credit card, online transactions, ATM withdrawals etc. No more shifting large amounts of money between different accounts. So, where are all the extra transactions? I would get paid the same amount - tax down from over 30% to a fraction of 1%. I would buy the same things - tax down from over 10% to a fraction of 1%. You are the only one saying it could be revenue neutral at that rate. And all you have said is that you "read it somewhere". Yet you have latched onto it like a religion. You are full of crap. No wonder John has taken an instant liking to you. [quote]Every TRANSACTION of every person would be contributing every time

It already is, when they get paid, and when they buy anything.[/quote]

The rate was given by way of making the concept concrete. I did say that it would have to be determined by government. The rate could go up or down depending on circumstances.

The main point is that what will be taxed is the total value of the transactions base in the economy, which is several times that of the current tax threshold determined base. That's why a minuscule amount can be collected on every dollar.

Even with actions like yours, the transactions base would be so large that only minor tweaks to the rate would probably be needed. You'd probably find, eventually, that trying to live an ascetic style to beat such a small amount on your dollar would not be worthwhile.

The economist who developed this alternative tax proposal for the US, calculated that even if the amount in the transaction base halved, the government could just double 0.3% to 0.6% i.e from 3/10 of a cent in every dollar to 6/10 of cent in every dollar (on each side of the transaction). I very much doubt actions like yours would cause the total value of transactions to fall by as much as 50%-even if they did, the rate would be adjusted.

I would restate the benefits of the automated transaction payments tax:

- one tax to cover all taxes from all tiers of government.

- no transaction escapes tax.

- a minuscule amount of tax is paid on each dollar.

- no red tape for tax collection, no tax returns required.

- a freeing up of human endevour from taxation.

- skewed to the rich as they embrace a disproportionate amount of total transactions in the economy

- it is collected automatically in real-time. People don't have to worry about it and everyone knows that every dollar is being taxed.


The economist who came up with it is Dr Edgar L. Feige.


If you want to see his proposal, look here:

https://www.slideshare.net/kadiam/the-automated-payment-transaction-tax

That link is broken.

Can you only find one person claiming such a low tax rate would be revenue neutral?

I would suggest to you that in order to raise enough revenue, the tax would have to be high enough to motivate people to find ways of avoiding it. Even at sub 1% I gave you examples of how I would easily avoid it on many transactions I currently make.

freediver wrote on Jul 10^th, 2022 at 8:32pm:

I would buy the same things

most people would have more discretionary income so they'd spend more


freediver wrote on Jul 10^th, 2022 at 8:32pm:

If this tax came in, the first thing I would do is get the bank to combine all my accounts into one. Home loan, credit card, online transactions, ATM withdrawals etc

most people already minimise the number of accounts they have. Why pay extra bank fee's when you don't need it.

The demand side is being overlooked.

The government has created excessive housing demand by extraordinarily high rates of migration and long-term visas into Australia.

In 2019 there were ~ one million a month of international arrivals of which at least 20% were long term visa entrants. That's around 200,000 a month, or 0.8% of the population per month which is mostly migrants and foreign students.

The government is enabling all these long-term entries but is making no provision in ensuring housing and other infrastructure is upgraded to cope with the population growth.

https://www.statista.com/statistics/1117476/australia-monthly-international-arrivals-in-australia-by-visa-group/

Quote:

most people already minimise the number of accounts they have. Why pay extra bank fee's when you don't need it.

The only one I pay fees on is the home loan. None of them have transaction fees. Bank accounts are like email addresses these days. You sign up to an online bitcoin broker and hey presto, here's a free bank account.

Laugh till you cry wrote on Jul 11^th, 2022 at 10:36am:

The demand side is being overlooked. The government has created excessive housing demand by extraordinarily high rates of migration and long-term visas into Australia. In 2019 there were ~ one million a month of international arrivals of which at least 20% were long term visa entrants. That's around 200,000 a month, or 0.8% of the population per month which is mostly migrants and foreign students. The government is enabling all these long-term entries but is making no provision in ensuring housing and other infrastructure is upgraded to cope with the population growth. https://www.statista.com/statistics/1117476/australia-monthly-international-arrivals-in-australia-by-visa-group/

By god you're good when you stop playing the insane jigaboo joongle boonny.