catallaxy files

catallaxy in technical exile

LDP blog

with 64 comments

The growing Liberal Democratic Party, which I will soon be a member of once they get to my application form, now has an official blog here.

Written by Admin

October 25, 2006 at 1:31 pm

Posted in Uncategorized

64 Responses

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  1. Well, congrats on your impending membership of the Liberal Democratic Party.

    I’m sure the branch meetings will be a hoot. Endless talk about liberatarianism followed by a raffle. As it’s not the ALP, the prize won’t be a book about Gough.


    October 25, 2006 at 5:15 pm

  2. I left a narky comment but I don’t think it worked.

    Oh well.


    October 25, 2006 at 5:16 pm

  3. Sorry, it did. I don’t want to have to go on about being old and not understanding new technology again.


    October 25, 2006 at 5:16 pm

  4. Not just you, Darlene.

    People think they are getting censored when they end up in moderation so I think I should clarify this here
    1) your first comment on this site since our crash ends up in moderation
    2) if you have too many links your comments end up in moderation

    Jason Soon

    October 25, 2006 at 5:29 pm

  5. Jason – do you support the right to own guns – without need? I mean this just makes the LDP look very fringe and very weird. Otherwise the party may have something to offer the Hayekian Liberals. Also the NIT was often designed by economists to as far as possible replicate the distributional effects of current taxation – where-as the 30/30 would be easily categorised as substantially regressive and pushed aside from general mainstream acceptance.

    Thoughts on guns??

    Corin M

    October 25, 2006 at 7:13 pm

  6. Sell me on these guys Jason.

    I’ve got to join a party sooner or later. I don’t know which one to join.


    October 25, 2006 at 7:13 pm

  7. Join these guys, Graeme. ABL is a member now, so is JC. c8to would be a member if he wasn’t too lazy to post his form.

    Jason Soon

    October 25, 2006 at 7:14 pm

  8. Corin
    My views on their guns policy are here. You don’t have to subscribe to 100% of a platform to join or support a party. In that case I wouldn’t join any at all except a party of one (myself)

    For the record, let me say that though I don’t agree with everything in their platform, I agree with far, far more of it than I do with the policies of the other parties by more than a country mile. While it is in my nature to change my mind on something and then change it back again, I am generally happy to call myself a libertarian. But the LDP isn’t necessarily just for libertarians.

    Lefties may find bits of the platform which is just as amenable to their priories as righties. And here is the thing – realistically the LDP may never get into government at least in the near future, but if there are policies which are currently out of the pale for the major parties but which you wish to get on the public agenda and pressure the major parties into doing something about, chances are you might find it on the LDP platform. And therein lies the value of support for it, if you are a heterodox lefty or righty. So vote intelligently and vote strategically.

    Jason Soon

    October 25, 2006 at 7:16 pm

  9. But whats the reasoning.

    Just the bandwagon reason?

    What do you know about these guys?


    October 25, 2006 at 7:16 pm

  10. I suggest you read the platform yourself and find out and see the earlier post I linked to above.

    They are closest to being the only small government party in Australia. Well actually they are the only small govt party in Australia.

    Jason Soon

    October 25, 2006 at 7:17 pm

  11. Graeme
    I should say the party was founded by John Humphreys but I’m sure you’re OK with that. He’s pretty sound on most things even for you.

    Jason Soon

    October 25, 2006 at 7:22 pm

  12. Right.

    Humphreys is cool.

    Except that he sees international violence like others would see shark attacks and lightning strikes.

    But we may be able to work around that.


    October 25, 2006 at 7:30 pm

  13. GMB: ‘Humphreys is cool.

    Except that he sees international violence like others would see shark attacks and lightning strikes.”

    LOL! Actually that’s a very good way of putting it. I agree with him specifically about Iraq but on general matters of principle he is too much of a peacenik, even for me.

    Jason Soon

    October 25, 2006 at 7:37 pm

  14. Join up, Graeme. As it happens I agree with their guns policy, but freely concede that they have work to do on the policy front – particularly with respect to details – in other areas. I’m glad I joined.


    October 25, 2006 at 8:21 pm

  15. He doesn’t understand the dynamics of international action.

    If we let these people slap us around it doesn’t matter if you are backing away for principled reason…. Their gains get locked in and our side gets both psycologically and morally cast down.

    Part of violent international action is forcing your view of history on the world and your view of what was right and what was wrong.

    And letting these guys win on some narrow cost estimate therefore allows a fraud to be locked in at the base of things.

    And there is no end to the bad karma produced by tlocking fraud into the base of things.

    We ought to have had the sort of policies developed within a couple of months that would have made the jihadist ideas just a puzzle and a silly dream and something that was a mere odditty for some specialist historians in centuries to come.

    You ruthlessly slash non-defense spending.

    You get all the pacifist policies together and apply them.

    Then you remember that you are NOT a pacifist country and you apply some of the other stuff too.


    October 25, 2006 at 8:26 pm

  16. While I can take or leave the guns policy and the global warming one, its the health policy I’m more interested in but they haven’t formulated it yet.

    Steve Edney

    October 25, 2006 at 8:49 pm

  17. We have to give the hospitals to recognised reliable charities for starters and start running down the funding.

    But at the same time raising the tax-free threshold.


    October 25, 2006 at 8:52 pm

  18. You’ll know when your application gets processed – David gives you a personal call. It’s a nice touch, actually.

    Raising the tax-free threshold is very important.


    October 25, 2006 at 8:54 pm

  19. “Join up, Graeme”

    Well you talked me into it.

    I suppose some of the policy might be up for grabs to some extent.

    So that might be where the opportunity to influence things lies.


    October 25, 2006 at 8:55 pm

  20. And does anyone know why the font has suddenly become larger? I shrank it to normal, then went to LP and needed a microscope. What gives?


    October 25, 2006 at 9:15 pm

  21. Jason – emblemic guff like guns haunts the fringe. Do you really want to walk off the cliff into such fringe policies? It is a serious question. You could potentially be a great adviser to the Libs or even an full advocate for smaller government – but association with such ideas with is political death in my view. It smacks of an easy target – I mean you guys will be bundled into the Hanson camp – when in reality that is entirely what you don’t want.

    Overturn the silly guns policy (and like policies) or you have no chance of ever getting anywhere.

    Corin M

    October 25, 2006 at 10:34 pm

  22. Well that’s very flattering Corin but some people would say my chances in politics are ruined hanging around this Catallaxy crowd already:-)

    But seriously, what you regard as fringe is open to interpretation. There are States in the US with conceal and carry laws and they’re not self evidently comprised of lunatics.

    I’m not going to die in a ditch over gun rights but neither am I going to disassociate myself from the LDP which is never going to gain power anyway (and which sees itself as more playing a sort of vanguard role) just because of its guns policies. Besides which they are open to interpretation – they don’t say anything about carrying guns into public property nor do they rule out setting a de facto rule e.g. that all commercial establishments will be assumed to not want guns on their property unless they put up a sign saying otherwise (which the gun rights people should be happy with if they take the Coase Theorem seriously).

    Jason Soon

    October 25, 2006 at 10:49 pm

  23. GMB
    You’ve never really clarified your views on guns. What do you think of the issue?

    Jason Soon

    October 25, 2006 at 10:56 pm

  24. “Take him to the shed and shoot him.”

    Our libertarian Bird of prey adores guns when pointed at macomancers. You kiddin.

    That comment alone caused Trotsky to go on Zoloft for a year.


    October 25, 2006 at 11:07 pm

  25. Corin, the problem with minor parties is that they need to focus on emotive yet relatively unimportant issues to get people excited enough to vote and register.

    The guns policy is a good example – it’s mostly a load of dogmatic “natural rights” bulldust.

    “There is copious evidence to show that, where gun ownership is high, crime involving actual or threatened violence is reduced. Conversely, when gun ownership is reduced, violent crime increases. Australia’s experience since 1996 and the UK since 1997 are clear confirmation of the latter point.”

    Pure tripe. Lott was discredited years ago and if you’re going to make claims like that you need to reference them.

    It’s a popular policy though – according to an LDP news article, they registered over 300 new members at a gun show.

    It’s early days yet and it remains to be seen whether enough moderates will join and push it in a sensible direction and give it a chance of being taken seriously.
    I’m still glad I joined – Howard and Beazley are pathetic and it’s nice to have a party which roughly approximates my own views.


    October 25, 2006 at 11:22 pm

  26. Bah. That didn’t work out at all.

    Here is the quote

    There is copious evidence to show that, where gun ownership is high, crime involving actual or threatened violence is reduced. Conversely, when gun ownership is reduced, violent crime increases. Australia’s experience since 1996 and the UK since 1997 are clear confirmation of the latter point.


    October 25, 2006 at 11:24 pm

  27. Jason – who came up with the guns policy, and why? It is precisely the sought of thing that leaves no appropriate voting block for your vehicle. I mean the sought of people you need support from are – bankers, lawyers, professionals, et al – who think small govt is good who are also yuppies who think gays are ok with me. etc

    It probably means the 30/30 tax system is way to extreme – so soften it. It probably means the guns policy is weird to those yuppies, etc, etc.

    Can I at this point say I am no Libertarian nor even a liberal – nor do I actually like its’ heavy reductions in taxation take, the 30/30 tax system, nor do I read Catallaxy for the ‘values’ and ‘community’ – but I do read it for the fun and humour and general good spirit. So my opinion probably counts for nought.

    However I’d say there is a place for a small govt party that likes ‘lifestyle diversity’ – indeed I reckon it would challenge the Libs for the last Senate place in most States. There are a lot of yuppies out there still who also have loads of lifestyle diversity.

    Do you have to have a big bang? Why not place yourselves as the inheritors of Hewson’s Fightback (even though it was an electoral disaster) – not even more extreme.

    You guys need a good spin-doctor by the look. It looks like too many policy wonks and not enough pragmatism.

    Corin M

    October 25, 2006 at 11:31 pm

  28. Further example: The very same yuppies think climate change is a vital issue – even though they want less tax take. So the stuff on climate change was weird for that target audience as well. I’d say good arguments for LDP would involve significantly reducing tax overall but providing market ‘signals’ to industry to reduce carbon outputs.

    I guess what I’m getting at is – the horse bolted – yuppies want it all – including being greener.

    Corin M

    October 25, 2006 at 11:51 pm

  29. Corin
    I’m happy for the LDP to be a more yuppy friendly party. In fact I think JohnZ is one of these yuppies you’re talking about. But guns are a strange obsession for some of the more hard core libertarians among us and conveniently would also endear the LDP to a not insignificant lobby group so there is some convergence of ideology and expediency here for some in the LDP and for that reason it’ll probably stay.

    Jason Soon

    October 25, 2006 at 11:54 pm

  30. John
    Ever thought of joining the greens. You’re not a libertarian. nothing personal but you don’t seem to believe anything the party does.

    Not to offend you but I honestly think you are a disaffected lefty and still sitting the fence not knwing which side to fall. you’d be happier in with the greens.


    October 26, 2006 at 12:00 am

  31. way to go, JC! The LDP should appoint you as their Campaigns Director.

    Jason Soon

    October 26, 2006 at 12:01 am

  32. So you’d choose irrelevance over winning the last Senate place? I mean the inner city lower house seats would be targets as well – like Wentworth, etc. Guns will end that as will 30/30 etc. I mean get Hewson and Co to join. Even CIS would come on board I’d expect if you tone it down.

    Are you really that right wing as well? I also thought there was a cuddly Jason Soon hiding under all that wolf’s clothing? You never sound convinced to me – the jokes etc.

    Corin M

    October 26, 2006 at 12:10 am

  33. Actually they should ask me to run for a senate seat here. As I would happily finance my own campaign. Could you imagine if by some bolt of lightening I actually won a seat? It would be so funny. My idea of being a senator would be to never turn up as a form opf protest.

    Funny thing is that guy who’s opposition conservative for finance -front bencher in NZ was once my assistant for a time. I used to send him to go pick up my car when it was in for repairs.

    He recnetly told me i should do what he did as parliament is like a trading room and just as funny.

    Really smart guy, then worked for Merrll lynch running a department.

    He is almost as smart as I am.


    October 26, 2006 at 12:14 am

  34. Well Corin I try not to take myself too seriously though I sometimes fail.

    But I don’t think it’s a matter of choosing irrelevance. I can’t speak for the party as a whole and I’m sure they wouldn’t mind winning a few Senate seats but ultimately it’s not going to ever win government in the near future. I think its aim is as I put it, a vanguard party to push both parties in a more libertarian direction. If you put in too much spin you lose that. For instance, take drugs. I would not want to see the LDP have a drug legalisation policy that is too watered down (in fact from recollection I think the current policy may be too watered down) even if that costs votes that are in any case not going to get them over the line anyway as that would defeat the purpose which is to suddenly introduce the public to this crazy idea that thinking about legalising drugs isn’t totally out of the pale (and similarly the major parties).

    Jason Soon

    October 26, 2006 at 12:28 am

  35. Ok – but new parties will be at a zenith when they are created. So you’ve got about 12 months to 2 years to get a platform and candidates that can win Senate seats.

    I mean get a leader too – they don’t have to actually even run. Like Hewson or Kennett (not that he would do it) – what a coupt that would be. Instant recognition.

    Otherwise you’ll just get a small token amount of cash from the NRA – big deal – and you’ll fizzle.

    What about running in lower house seats as well – like Kooyong as examples.

    I personally think this outfit is the most dangerous thing I’ve ever seen – so I hope you keep the guns policy and 30/30 – by doing so you’ll get about 10,000 votes nation wide.

    Corin M

    October 26, 2006 at 12:36 am

  36. “I personally think this outfit is the most dangerous thing I’ve ever seen”
    Why is that, Corin. Why do you think is dangerous. What danger does it pose?


    October 26, 2006 at 12:42 am

  37. jc, the 30/30 would be a disaster for all but the top 25% of people. The guns policy is simply absurd, and the general thrust of the party would drive people toward thinking that reform is a negative: see Hewson who only made good fair reform (which his wasn’t) impossible for many years because his policies simply scared the pants off everyone and anything like competition policy was a sure fire negative for years.

    Would it clarify things as well to highlight that Mr Soon once called me a market orientated social democrat. Indeed I’d say I probably was – but perhaps I’d clarify by saying I’m a market orientated social demcrat who believes in devolving power: so like primaries or differential vouchers, wage-tax-trade-offs, etc.

    You guys are simply scary!

    Corin M

    October 26, 2006 at 1:25 am

  38. Corin
    10% of the US elecorate identifies as libertarian.

    Most libertarians are economic libertarians anyway. You really do underestimate human capacity to self regulate and co-exist without compulsion from the state.

    There’s nothing scary about free markets and be free to do what doesn’t cause harm to others.

    There’s 1.5 million people in US prsions as a result of drug related crimes. That scaes me. You get found with a little more weed that what is considered personal consumption and you can end up with 20 years in the slammer!

    You are also mistaken if you think people wish to live in anarchy; they don’t


    October 26, 2006 at 1:39 am

  39. jails is a bad example as predominantly those in jails are from poorer backgrounds. Libertarians scare me because they think the poor will always be ok – as it is the state that gets in the way. Or that it is their fault if they live on $15K a year.

    Now I’m not some Communist or anything – but rules for some restribution sound like a good society – within tolerance levels – and assuming EMTR’s remain sufficiently low to reward work and private initiative.

    Indeed an enabling state can provide better economic outcome if it means everyone is educated to a reasonable standard.

    I think Libertarian jeopardise the tenet that every man can escape from the worst poverty and rise to the highest honour.

    BTW – there are two parts to the equation.

    BTW – I know I’m gonna lose this on this website. It was like me arguing for minimum wage restraint and tax relief/credits instead on New Matilda – they knew I was a centrist and ‘nasty’ piece of work. Here I’ll be labelled a commie.

    Corin M

    October 26, 2006 at 2:08 am

  40. Corin
    he’s how scary this group is.

    Most believe in zero tax up to a threshold of $25,000 and we replace welfare with a negative income tax.

    Replace the education system with vouchers so that parents have a choice in sending kids to better schools.

    hardening the currency. Poorer people are the ones without much in the way of hard assets. So harding the currency would mean their money doesn’t lose purchasing power.

    It is much better to impose a negative tax than welfare because the churning cost of rediistributed money is about $1.4.

    Just a few of the things. Not so scary, right?


    October 26, 2006 at 2:29 am

  41. I’d support differential vouchers.

    On the NIT – I support tax credits or a higher LITO – indeed I countenance an NIT – but not the way it has been set by the LDP 30/30. The NIT was always intended though as a policy that would reduce EMTR’s and not be a wholesale redistribution mechanism.

    Yopu’ll get cut to pieces running that stuff.

    Corin M

    October 26, 2006 at 2:42 am

  42. Yopu’ll get cut to pieces running that stuff.

    By who? 30/30 was released into the public sphere almost a year ago and was published in the Australian among other mainstream sources. It met with good reviews by economists all over Australia from both sides of politics.

    Of course, neither of the major parties would take the political risk to actually institute the 30/30 policy. That’s why we are here.

    Corin, what is the point of having a libertarian party if we modify our policies towards the centre in order to gain a wider voting bloc?

    If that’s what we wanted we could already join the ALP or Liberal party.


    October 26, 2006 at 3:03 am

  43. I think you misunderstand the primary function of the LDP.

    As Libertarians, the last thing most of us want is to be in a position of arbitrary power over others.

    We just want to be left alone. By running in elections and gaining votes we hope to show the major parties where they are going wrong. Getting someone in the Senate would be nice but our major goal is to move the centre of Australian politics towards the ideals of small government.

    Nobody in the LDP wants to be the Prime Minister of Australia. (Unless of course we did actually get Hewsom or Kennett on board, they would probably enjoy it quite a bit).


    October 26, 2006 at 3:06 am

  44. The LDP is for people that think it is wrong to want to be Prime Minister.


    October 26, 2006 at 3:24 am

  45. The 30/30 isn’t as radical as it seems. When it came out it was well received and the only criticism I saw was from those who reckoned the tax-free threashold was too generous. I’m also happy to accept that the ‘mainstream’ liberatrian foreign policy is one of isolationism – so getting involved in foreign wars is a no-no. Fine. The LDP immigration policy is not a libertarian policy. The libertarian view would be one of open borders. I know comrade Friedman has pooh-poohed this idea as being incompatible with the welfare state and consequently a no-starter. But, to my mind, that is an additional benefit of open borders – the welfare state would collapse. We should also stop taking refugees from the UN – people who sit around in camps doing nothing – and only take those entrepreneurs who show the initiative to make their own way here.

    Sinclair Davidson

    October 26, 2006 at 7:19 am

  46. As someone who actually works with tax every day, I can see a lot of benefits in the 30/30 policy. Of course, I know that the policy is aimed at putting me out of a job, but I am prepared to sacrifice my career for the benefit of the nation.

    Of course, some of the most complex provisions of the ITAAs involve International tax and CGT. Neither of these would be removed by the 30/30.

    The 30/30 states that businesses will be allowed deductions so that they will be taxed on profit not gross income. That means that the depreciation, capital allowance and carried forward losses provisions will stay, but we will lose self education expenses and a few other deduction provisions that deal with claims by non-business taxpayers. Well that saves 5 pages of legislation, as 99% of deduction provisions are directed at business. In fact I can see an extra layer of complexity in 303/30 as there will need to be some manner by which business expenses can be distinguished from non-business expenses.

    I’m sure that Libertarians will also be very keen on continuing the Liberal’s sensible policy of allowing corporate groups to consolidate and be treated as one taxpayer. Well there’s few hundred pages of legislation that won’t be changed.

    And then there’s FBT and GST …

    Bugger, it looks like I may not be out of a job after all.

    Rococo Liberal

    October 26, 2006 at 8:07 am

  47. Well there you go, someone who thinks the 30/30 plan isn’t radical enough, and he’s probably right.

    I can understand you being concerned with the guns policy Corin but the 30/30? That’s the model we should all be heading towards and no I don’t see the NIT as just about reducing EMTRs.

    I think the poor will always be with us so I’m not that concerned about the existence of a welfare safety net. I am concerned about getting rid of unnecessary paper shufflers whether they be employed directly by the public sector or indirectly by the private sector (sorry to say this Rococo Liberal) because of our tax system. The tax returns should ideally be this postcard you can fill in over a lunch break.

    Jason Soon

    October 26, 2006 at 8:25 am

  48. I think you’ll definitely still have a job, Rococo, but the numbers of bureaucrats and pen-pushers at Centrelink running peoples’ lives at a pretty microscopic level may be reduced.


    October 26, 2006 at 10:43 am

  49. SL

    I agree it would be great to see the Centrelink people in the streets begging for their sustenance.

    But my comment was meant to show that the 30/30 tax policy will not reduce the complexity of the tax system that much.


    Most private individuals’ tax returns are very straight forward these days. The Government thus gets the vast majority of its tax revenue via the PAYG system. This means that individuals’ tax returns aren’t really that important.

    I think the 30/30 should instead be 30/20 (ie 30K trheshhold and 20% tax rate). There would be no need to introduce any amendments other than the necessary amendments to the rating Acts and any reference to the top marginal rates in ITAA and PAYG.

    Rococo Liberal

    October 26, 2006 at 12:17 pm

  50. I think Rococo has a point. I’ve been in business earning considerably less than I do now and had more to spare at the end of the day. The amount of personal income tax ‘workers’ (of whatever sort) pay is punitive. No wonder Barwick CJ always viewed the tax act as a penal statute.


    October 26, 2006 at 1:04 pm

  51. Barwick CJ was a great man!

    If the Crown wishes to take someone’s money by licensed theft, then the statute that does it ought to make Parliament’s intention very plain.

    Of course it won’t matter in most States, where the State Governments brazenly flout the Commonwealth Constitution by imposing stamp duty on goods sold as part of the sale of a business. This is an excise and is forbidden by sec 55 of the Constitution. But no-one will ever bother to take on the States on this issue because no single sale of business will involve a really significant enough amount of duty to be worth challenging.

    Hopfully all the state will eventually follow the lead of Victoria and abolish stamp duty on transfer of business assets

    Rococo Liberal

    October 26, 2006 at 5:30 pm

  52. Stamp duty=bane of lots of peoples’ lives. Mind you I still think the whole PAYG thing is even worse.

    And it would be great to have more people who viewed the tax act like Barwick CJ on the High Court.


    October 26, 2006 at 5:36 pm

  53. For people interested in the gun issue, there’s a lively debate going on over at Thoughts on Freedom on this issue.


    October 26, 2006 at 6:31 pm

  54. Jason – arguing based on equity is a faulty prospectus for the 30/30. Anyone can spot the massive reductions for families with more than one kid (esp. non professionals) or those unable to work. Thoughts on this?

    PS. It is morning in London – so couldn’t respond.

    I think LDP is destined to be think tank that talks to itself (and the CIS) by your discussions not anything like a political force. Thoughts? I’m happy with your general lack of pragmatism and electoral fortune and hopes.

    Corin M

    October 26, 2006 at 6:52 pm

  55. Corin, I don’t think you are much aware of the issues facing a small party. The vaste majority of minor parties start and die within a year. Those that get registered somewhere generally run in one election, do badly, and disapear.

    By those (admitedly low) standards the LDP is already ahead of the curve. We’ve been registered in the ACT since 2001 and have run in two ACT elections, gaining 1% and 1.3% of the vote. If we can repeat that across Australia — which is very doable — then we would be the sixth biggest party and would have established our relevance.

    There is nothing to be gained by softening our views into a fluffy centre party. Not only would we be selling out principles, but we would also be guaranteeing our political failure — because why vote for a small powerless immitation of the bigger parties? I’ve seen it happen. And you will too if you watch “People Power” in the upcoming vic elections.

    And I don’t know what you have against 30/30. Most poor people will be made better off as a result of those policies. More jobs. Less poverty.

    Graeme — international violence is like shark attacks and lightening strikes. They both cause deaths, and you shouldn’t waste money on either unless you’re money will do some good. Your sense of risk is out of proportion. Calm, big fella. And you trust the government too much. They’re not really your friend.

    Rococo — I admit that company tax issues will continue to be less-than-perfectly-easy. That’s unavoidable I think. But under 30/30 the average person won’t have to deal with a tax return at all. And all marginal tax rates will be equal (CGT, FBT, Company, Individual etc) which will makes it easier to work out tax liability. The issue of differentiating between business v non-business expense already exists, so it’s not a new complexity to my scheme.

    John Humphreys

    October 26, 2006 at 9:34 pm

  56. ‘I admit that company tax issues will continue to be less-than-perfectly-easy’

    Just abolish the corporate tax and tax all corporate distributions at the personal level.

    Sinclair Davidson

    October 26, 2006 at 9:50 pm

  57. Sinc

    It’s an idea, but it would require some complex legislation along the lines of the alienation rules to stop all employees becoming companies and splitting their incomes with their families. With a $30,000 tax free threshhold there would be a high incentive to engage in income splitting.

    The system we have now, where companies are taxed, but the shareholders get credit for that tax is good, but cumbersome.

    Personally, I’m against taxing dividends and interest. People should be encouraged to save and invest their money.

    The tax and welfare system is like the Ptolemaic Universe. Originally it was a relatively simple model that worked quite well. Over the years it has been adjusted more and more so that it can still fit the mould that we want it to fit. It is now this gargantuan thing that cannot possibly fulfill our needs.

    This site is a haven for economists. Surely one of you can come up with a better way for the the Government to raise the bulk of its revenue?

    After all income tax was originally devised as an emergency measure in the 18th century. It is an answer to an 18th century question: how do you tax the monied interest as well as landowners? However, the complexity of the modern economy makes an efficient, simple income tax system almost impossible. I know, I spend most of my days helping people to avoid large swathes of tax. Of course employees a taxed via the old PAYG system and thus end up paying the bulk of the tax take.

    GST was an answer to a 20th century question how to tax cash-flow and consumption. it works well. GST is a simple tax. the main evidence of this is the huge decline in the number of indirect tax advisers after 1 July 2000.

    The answer is simple. Why not make Australia a tax haven? Lower fuel taxes and all other excises dramatically, get rid of the remaining customs duties and lower income tax to about 5 to 10%. The economy would boom and the tax revenue wouold probably increase dramatically.

    O course this would annoy the large taxing countries, but a little real tax competition may shock the idiots of the EU out their complacency.

    Rococo Liberal

    October 27, 2006 at 8:27 am

  58. Exactly, why not make Australia a tax haven?

    As you say the imputation system is very cumbersome and leads to strange distortions. The basis of the current trend in buybacks is to use up franking credits. It’s been calculated that there are $100 billion in unused credits. The government should carry that on their balance sheet as a contingent liability!

    The ARC have funded me to do a 3-year project into Australian corporate taxation – so come January 2007 onwards, I’m going to have heaps to say.

    Sinclair Davidson

    October 27, 2006 at 9:27 am

  59. You and Rococo should get together on this Sinc. Having a tax specialist who knows exactly how to find all the mack-truck sized loopholes in the legislation would be a good thing.


    October 27, 2006 at 9:40 am

  60. “Why not make Australia a tax-haven?”

    Ummm because it’s a welfare state and the state needs the money?

    The idea that cutting taxes by 90%+ as you propose would cause tax revenues to “boom” is fantasy.

    Timothy Can

    October 27, 2006 at 10:13 am

  61. ‘The idea that cutting taxes by 90%+ as you propose would cause tax revenues to “boom” is fantasy. ‘

    I don’t think anybody believes tax rates can be cut by 90% and tax revenue would increase. Net corporate tax revenue is not as large as the (gross) numbers suggest. Corporations don’t exist to pay tax, they exist to generate economic wealth. Even CEDA in their recent report recognise this. They suggest cutting corporate tax to 19% and scrapping imputation – this proposal would increase revenue to treasury. This proposal also assumes fiscal illusion – corporates don’t actually pay tax, but they behave as if they did. So, if that is the problem we face, reduce corporate tax to zero, and tax the shareholders. This also has the advantage of being transparent. Furthermore, there is little to stop governments from having different rates for different sources of income (if that’s what they wanted). Sure there would have to be some laws preventing individuals from incorporating – but to the best of my knowlede, we have these types of laws already.

    Sinclair Davidson

    October 27, 2006 at 10:33 am

  62. Sorry, RL proposed reducing income tax rates to 5%-10%. Given tax free thresholds, that would be an enormous cut in tax revenue.

    Abolishing corporate tax would also be a very large reduction in tax take. Dividend payout rates would crash (why pay taxed dividends when you can retain the capital and reward share-holders through a higher share price?) as would taxes raised on income from private capital (everyone with a brain and a significant portfolio would move their assets into a private company). Therefore the effect would be significantly greater than just taking out the current corporate tax line from the revenue.

    In my opinion it’s more productive to suggest ways in which government outlays should be reduced instead of proposing new tax schemes in isolation from current fiscal reality. Reducing taxes requires that outlays be reduced. How you arrange the taxes is a second order issue.

    Timothy Can

    October 27, 2006 at 11:09 am

  63. Dividends may, or may not, change. Tax policy shouldn’t impede on corporate decision making. In any event, capital gains are taxed, albeit at a reduced rate.

    Government can and should cut spending. Further government should cut taxes in the context of a balanced budget. Peter Saunders of the CIS has recommended many spending cuts – not least $80 billion in churn. That’s before we start cutting into the flab of the welfare system. Cutting government would cause the economy to boom.

    Sinclair Davidson

    October 27, 2006 at 12:47 pm

  64. Sinclair

    You are correct about the fact that although the majoity of the tax law deals with the problems thrown up by taxing companies, the actual cororate tax take is relatively small.

    You are also correct that CGT would hit the sale of the shares.


    My tongue was slightly in my cheek when I suggested a tax rate of 10%. However, making Oz a tax haven would boost the economy enormously. As the irish experience has shown, big cuts in tax rates lead to an incresase in tax revenue.

    Who gives a flying fuck about the welfare state? If you read James Bartholemew’s work on the British Welfare State, “The Welfare State We’re In,” or anything by Theodore Dalrymple, you will understand why the welfare state is a left wing disaster that should be taken out the back and shot.

    Rococo Liberal

    October 27, 2006 at 1:59 pm

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