donations ....dont you know anything ? Im sure everyone will willingly donate for new roads & bridges they wont use & a new hospital thats not in their local area .
That question is a different topic to Yip/my response that consumption taxes are theft just as much as income taxes.
Which services? With an ever expanding encroachment of bigger government into our lives and taking on ever increasing controls and regulations across all of its different tiers, there simply is no limit to the amount of money they need to fund themselves and their so called services. With no limit and no constraints they just use coercion to enforce their financing needs. You go tell a menstruating woman that she doesn't need to pay for tampons and then reconsider whether the GST is just another level of coercion by an out of control totalitarian government taking more money. Of course, there are some that would argue that the government should provide hygiene products for free or subsidise them like they do big pharmaceutical companies with the Pharmaceutical Benefits Scheme. But then, those types just don't understand that this creates bloated, inefficient monopolies and higher prices. The bottom line is without constraining the role of government and and their budget, they just grow uncontrollably like a cancer, sucking all the nutrients and life-blood from its host (society at large) without constraint. They have turned what should be a symbiotic relationship in a healthy society into a destructive leeching relationship. Just as the leech steals your blood to grow, so the government steals your money and savings in the process of you living.
http://en.wikipedia.org/wiki/Flat_tax#Countries_that_have_flat_tax_systems Half the countries I've never heard of. The other half I wouldn't want to live in.
I'll answer the first question. Government should provide protection for it's citizens, law (policing), courts and defence. Like I said, you have a choice, it may mean life is slightly uncomfortable, but no one is forcing her to buy tampons. GST = tax on consumption. Every other tax is a tax on production. Now what would you rather have to pay for essential government services, a tax that robs you of your productivity and rewards the consumption of resources, or a tax that rewards productivity while punishing consumption? And as far as the rest of your post goes, I'm not going to argue about government waste, I'm arguing about the validity of a consumption tax.
In theory, where government is constrained to providing "essential" services that serve the collective commons of society, then certainly your arguement makes sense. However, theory versus reality are vastly different and as I said, government are unrestrained, coercive cancers on society and their taxes steal the wealth and savings of its people to support its own growth and interests way beyond any "essential" services. So in reality, this undifferentiated pooling of taxation revenue brands it all as theft. Now if They could apply the GST to fund "essential" services only, then we could make a distinction between a good tax and a bad tax. But they don't, they just steal as much as they can without anything to restrain them and they sit in parliamemnt every freakin' day dreaming up new ways to restrict our freedoms, steal our wealth and line their own nests.
Exactly One of the reasons the gov is keen in my view to increase the GST is because it works well for them in an inflationary environment. As prices rise the tax rate increases in tandem without the need to change tax brackets. (I remember John Howard actually stating the inflation indexing feature of the GST.) Wage increases on the other hand are not keeping pace with inflation as our standard of living is being erroded yielding positive decreasing returns to the ATO in that reguard. Increasing our standard of living appears not to be on the cards here. :|
^ I don't get it. Inflation = price increases (in this context anyway) As the GST is a percentage, it doesn't matter if inflation is 1% or 1000000% - the govt still gets its 10%. The problem for the Govt is the lag effect of inflation and their ability to collect GST. I'd say at the moment it is a minor problem, but it'd be a major problem during hyperinflation (although that's just one of many problems then). Edit: The rest of your post is spot on, like: Edit2: I just realised that is incorrect too. The ATO wins in an inflationary environment, as tax bracket changes can lag due to deliberate Govt policy sluggishness. Eg, in 5 years, maybe we'll all be on the top tax rate, merely due to wage (and CPI) inflation, without them changing the tax brackets. Where the ATO really loses is 'deflation'. I don't see that happening anytime soon.
Agreed, 10% locked in and as prices rise so the 10% becomes larger and deflation unlikely. Comparing salary tax brackets with GST, GST would be favourable where you expect harder economic times with increased unemployment, greater number of low wage earners ect. In this case the Tax "revenue" capital transfer will reduce but spending on those things earmarked for the GST (such as basic food) will be a sure bet on securing as solid tax base.
Well I see your argument as well as valid. I consider the Gov a black box. Who knows what there actually thinking. They are certainly likely to be thinking on what they believe would be benificial to them first and sell it to us as good for us. If the market changes you can bet they will change to suit the "latest indictors". :/
^ Howard was very deliberately slow on changing the tax brackets (at least from memory) I was surprised when Rudd fixed them up, and even the medicare levy surcharge threshold (although that's another story).
An increased GST would be benificual to the Gov in an inflationary environment should the velocity of money increase where the masses realise that any savings and earnings are best spent ASAP.
^ I don't see how it makes an increase necessary though. It's still 10%, with high velocity or not. If people want to spend their money immediately (high velocity), then the ATO still wins. Increasing the GST would obviously give any Govt more tax revenue, but the reason to increase it is not due to inflation causing a loss on the ATO, or monetary velocity or anything like that. Deflation one the other hand (or reduced velocity) would mean a lot less tax receipts - but it's still 10%. The flat tax will always beat a graduated tax on deflation, and the graduated tax will be a flat tax on inflation (simply because of the lag effect bonus for the graduated tax).
Yes they do, any capital for nothing other than ink on paper is not a bad win to be sitting on. I'm not indicating an increase to the GST rate is necessary for the purposes of Gov a result of any real or percieved inflation necessarily, only that they may associate it as beneficial in terms of capturing a more solid base in this environment in comparison to over and above taxes such as income tax that use defined brackets that everyone concentrates on; Where you have stagflation - high inflation and poor productive output the bracket system that's dependant on wages will diminish (apart from wage increases due to inflation granted) in tax revenue, in terms of capital value transferred. By adding basic food into the mix a particularly large segment of the Tax market currently untapped together with a percentage increase to boot, now that's very much subject to inflation and then the ATO are off to the races. Additionally because the gov tend to think in the short term, they may wish to capture tax in a inflation (stagflation) environment when people tap into there long held savings and spend spend spend. With the GST net cast, the bounty will be bigger while this lasts (while they are at the helm). These are just my own thoughts and stand to be corrected, Cheers, Flash
Yeah what you say makes sense - particularly during stagflation. I think you should keep in mind though that adding to 10% to GST for example does not necessarily mean 10% more revenue from consumer goods. There is a point when people will cut-down spending if it costs too much. Producers of goods will go bust if they can't pass the tax costs onto the consumer. It's a case of the parasite (the Govt/ATO) starting to kill the host (consumer economy), which is neither beneficial for the host or the parasite in the longer term. (and we know it isn't really a symbiotic relationship so it was never particularly good for the host anyway. Small Govt can be symbiotic, but larger Govt is parasitic. I'm on fire with turtlin analogies)
In Relation to consumer goods, you are right that there is a Host/parasite relationship going one here and hence where it has diminishing returns. The GST will all bear down on Businesses doing trade amongst themselves, Contractors (as myself). They have also for there benefit determined new guidelines as to what they define as a contractor just as there have previously with terms as sole trader that makes the term a nonsense. This measure could be to draw down more heavily on the productive sectors of the economy. Especially now that they were relying on the super mine rent tax to meet there promise to return the budget to zero that has gone pear shaped to the forecast. I read a book on Sir Thomas Playford - ex south Australian premier. The man was a real statesman, ex WW1 digger who believed in small government and took very seriously the responsibility of spending well, productively, prudently of public funds for the good of we the people.
