[LINK] Why so many of us think we're overtaxed

Frank O'Connor foconno1@bigpond.net.au
Tue, 25 Feb 2003 17:05:34 +1100


My problem with that argument is that the poor do pay a higher 
proportion of the income in tax, and that's something that tends to 
be forgotten. The GST for example takes a bigger proportional bit out 
a poor man's income than it does a rich mans's income. Other indirect 
taxes also take a similar punch out of their wallets.

To me the BIG problems with the tax system are:

1. The income tax system (which accounts for more than 50% of 
collected revenue)  is very heavily geared toward the middle and 
lower income groups. Anyone ... and I mean anyone ... who is on a 
half way decent income can 'invest' in any number of tax minimisation 
schemes and rorts. (Being in this bracket I don't begrudge that fact 
... hey the WestMinster decision make sit obligatory for us to 
minimise tax ...but I do find it strange that our tax scheme 
basically promotes investment strategies that are geared to LOSE 
money to save tax ... it directs our economy into a weirdly 
dysfunctional investment strategy where we often lose more than we 
gain in tax saved - and people see that as OK?.)

2. There is little or no accountability for the disposition of the 
revenue raised. Broadly speaking funds tend to find their way into 
whatever avenues whatever pluralist lobby has managed to press our 
jellified politicos the hardest ... or dependent on the rather 
jaundiced view of what our politicos have to the perceived 
self-interest of that section or segment of the population that votes 
for them.

3. What funds do make it into laudable projects for the public weal 
and investment in the future (via infrastructure projects, transport, 
health system, education system or whatever) tend to be dissipated in 
short term by lack of accountability, responsibility and often 
down-right corruption in the administration of same and award of 
contracts and the like. Some constitutional guarantees of 
accountability and responsibility pertinent to public funding would 
be nice.

4. Politicians promises (which basically have to do with how 
collected revenue will be spent) mean nothing after the election. 
There is NO revenue accountability enforced on politicians.

5. There appears to be a lot of hypocrisy inherent in the system ... 
the big users of public resources (government, industry, business, 
professional bodies etc) seem to think it's OK for the middle to 
lower income groups to fund their use of the revenue paid for 
resources, whilst requiring (screaming for) less and less 
contributions from themselves. If they really believed in 'user pays' 
they wouldn't be contributing a progressively lesser amount to the 
tax revenues annually. (eg. Company tax has shrunk as a percentage of 
the income tax take for the last 10 years ... despite these years 
being economic boom years, and despite the fact that with dividend 
franking shareholders now benefit from companies paying tax.) 
'Socialise the costs and capitalize the profits' is the order of the 
day.

6. The average user now gets less for his tax dollar than he ever 
did.'"User pays' justifies the withdrawal of previously free or 
subsidised government service (health, education, transport etc), but 
the revenue take goes up and nobody has any idea of what accounting 
black hole the revenue disappears into. (Debt repayment, reserve bank 
foreign currency speculation, industry assistance etc)

7. Previously revenue raising public infrastructure (power, 
telecommunications, gas, etc) is privatised for a song, and customer 
fees for same have increased far faster than the CPI ... and these 
additional costs represent an additional taxpayer burden that would 
have qualified as a tax in the days when the infrastructure was 
publicly administered, but don't under current accounting rules. (In 
the 'good old days' a lot of the tax we paid went to 'subsidise' this 
infrastructure .... but now it just disappears into the 
aforementioned 'black hole' and consumers pay the added cost for a 
third party's profit.)

The bottom line is that taxpayers see they are paying more tax ... 
hey, all the government revenue figures (state and federal) support 
that ... but are also conscious that they are getting less for it, 
and paying proportionately more for, previously government provided 
but now private, infrastructure services without seeing any increase 
in service quality and extent. The 'rationalist' arguments are 
starting to look very hollow to the vast majority of the Australian 
people.

That is what irritates people. The amount of tax they pay is secondary.

Gittens did do a service though in pointing out that we aren't overly 
taxed as compared to other countries.

Just my 2 cents worth ...

					Regards,

At 2:03 PM +1100 25/2/2003, Bernard Robertson-Dunn wrote:
>Craig Sanders wrote:
>>
>
>>  absolutely.  the thing that really struck me during the debates that
>>  raged over the GST-fueled tax cuts a few years ago, was that the most
>>  obviously fair tax cut wasn't considered or discussed seriously by
>>  anyone - i.e. raising the tax-free threshold to a reasonable level (IMO,
>>  a "reasonable level" is around $15-$20,000, much higher than the current
>>  level of just under $6000).
>
>I have a problem with the tax free threshold.
>
>People who don't pay tax would have no ownership of the funding of the
>country and it could promote an outsider culture.
>
>It's bad enough having the rich and powerful feel that they are outside the
>system, I don't think much good comes from even more believing that
>"normal" rules don't apply to them.
>
>Everybody should contribute to the upkeep of the community, that way they
>are more likely to feel they belong.
>
>--
>The tax collector must love poor people, he's creating so many of them.
>-- Bill Vaughan
>
>Regards
>brd
>
>Bernard Robertson-Dunn
>Canberra Australia
>brd@austarmetro.com.au
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