The hyenas begin to circle...

Henry Thornton has this forum discussing the possibility of tax reform under a Liberal senate. The site focuses on economics and tends to be dominated by Liberals or that demographic at least.

On the day of infamy following the last election I subjected myself to Business Sunday and was treated to seeing a fat banker, a sleazy businessman and some yuppie hostess collectively salivating over what "they" would do with the government majority. They promised, ever so politely, to rip strips off Howard if he didn't take the chance to give them tax "reform" and complained long and loud about Australia's "punitive" income tax rates. Of course this kind of gibberish sat right alongside calls for disability pension reform and things of that ilk. These millionaires perhaps figured that their own tax "relief" would be a greater good than wasting money on cripples who didn't know what to do with it anyway.

The Thornton site above raises noble ideas like abolishing the tax free threshold and starting everyone at 10% while bringing the top rate of tax down to the corporate tax rate of 30% - the complaint is not that the top tax rate is too high, most of these types just direct their earnings through their companies anyway and pay the corporate tax rate. What they want is an alignment of the corporate tax rate and the top tax bracket so they can offload their accountants and pay 30% tax without all the hoopla and evasion that currently requires a chartered account to understand.

To be sure Howard has performed his miracles under the highest taxing regime in Australian history - remember how the GST wasn't going to change anything? - but where have those extra taxes come from? One Thornton forum contributor suggested income tax be abolished altogether and we only pay consumption tax, which - due to its negative connotations - has the politically correct title GST these days. A hundred years ago the Left was fighting for income tax to allow so called "punitive" tax arrangements, also known in less Orwellian times as income redistribution. In the wake of our swing to the Right this process is being reversed. Apparently the Liberals don't think there's enough inequality in Australia.

While we travel down the American path, hoping to import trailer trash wasteland scenes like those in 8 Mile, it is interesting to watch GWB putting Howard's earlier "reforms" into place and note that at least in America there's some controversy over these things. The anti-political brainwashing in Australia has clearly been so successful we didn't even really care when our social security was privatised, or pensions were abolished in favour of user-pays everyone-becomes-a-share-trader superannuation laws.

The Americans we deride as ignorant and easily led because of Iraq are at least strongly objecting to having their own social security sold to the highest bidder. According to this poll if you ask Australians in the abstract "What should the government do?" then health and education dominate both being concerns for 50 - 60% of respondents with tax reform a piddling 5%. But ask the same people "What government changes would most help YOU?" and suddenly tax reform leaps to 32% and health and education are nowhere to be seen. It is this strange Doctor Jekyll and Mr Hyde act that Howard understands but that stumps Labor.

The Liberal Party platform has always been about appealing to the individual's interests - and lately their most selfish interests - while when Labour has its act together it is trying to get people to think of the bigger picture. In the survey everyone chooses tax cuts for themselves because they all assume that what that would mean is a tax cut in their bracket without any parallel spending cuts. Of course it doesn't, what it means is a tax cut for the top 30 - 50%, a tax hike for the poor and further health, education and welfare "reforms" to pay for it all. But as long as Howard is the friend of the (abstract) individual and Labour can't get a grip on the (abstract) society that's the path we will travel.

It would seem that sometimes "loving others as you love yourself" is not just noble but downright sensible. Especially when dealing with someone with the renowned honesty and moral fortitude of John Howard.

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