Nonsense about taxes
@box text intro = What do the following have in common: (a) the tax situation before the High Court's August 5 overturning of state taxes on petrol, tobacco and alcohol; (b) the tax situation after that ruling; (c) the promise of the federal government to collect those taxes and hand them over to the states, if it works; (d) that same promise, if it doesn't work? Anyone who's been listening to government politicians or reading the big business press knows the answer instantly: They all “prove” the need for a goods and services tax.
These days, it seems there's very little that doesn't provide evidence of the urgent need for a GST: we wouldn't be surprised to hear the television meteorologist declare, “The rise [or fall] in the Southern Oscillation Index is increasing the pressure for a broad-based consumption tax ... ”
The Sydney Morning Herald thought that the High Court ruling could do double duty, not only providing a “new GST push” (has the old push ended?) but also requiring the immediate privatisation of the state's electrical utilities. In an August 7 editorial, the paper declared that the tax verdict meant that the sell-off plan of Premier Bob Carr and treasurer Michael Egan “must be delayed no longer” -- even though, it acknowledged, the plan had yet to be approved by state cabinet or the ALP caucus; presumably, Carr or Egan should introduce the legislation as a private member's bill and count on it being passed by the opposition.
It's true that this nonsense comes at the end of what is known as the “silly season”. This is the period when parliaments are not in session, and journalists and editors, deprived of their normal source of silliness, have to invent their own. But there is something more than silliness involved in the reaction to the High Court verdict: the plan to force a GST down our throats is deadly serious.
The High Court, for constitutional reasons, has struck down regressive consumption taxes which the states had imposed on a few items. There is no logical reason why those taxes should be replaced by an even more reactionary, because more general, federal consumption tax.
If governments, state and federal, are really short of tax revenue -- and we won't know that until their billions in handouts to business are ended -- there's a simple solution. They could switch to taxing people who have money instead of people who don't.
A steeply progressive income tax (including on income hidden in capital gains, trusts, fringe benefits and other dodges), and a similarly progressive inheritance tax to catch those who evade the income tax, could more than replace all indirect taxes and regressive taxes like HECS. It's to stop us from considering that option that millionaire politicians and their billionaire mates scream so loudly that “we” need a GST.
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