Over the page, I’ve got some tables on tax rates, which I pasted from a Word document, saved as HTML. They look nice, but for some reason each one is preceded by a huge amount of blank space. Can anyone tell me how to get rid of this?
The tables are of some interest in themselves, so please take a look
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During the leadup to the Budget, the term ‘flat tax system’ was bandied about in Australia and overseas. The Economist gave the idea a run pointing to Eastern European countries that tax personal and corporate income at a common[1] flat fate ranging from 13 per cent (Russia) to 26 per cent (Estonia) applied to all incomes with no deductions. A further nod to neatness (with no real basis in tax theory) is to set the rate of Value Added Tax (that is, GST) at the same rate as personal and corporate income tax (reader Joff Lolliot alerted me to this and some other points covered in this piece.)
Not surprisingly, I’m unimpressed by the concept and the arguments put forward in its support.
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Here’s my piece from today’s Fin, on the expenditure side of the budget
Following up on the Budget, I’ve been looking at the incidence of income tax over the Howard-Costello period. To start with, I’ve just looked at the tax scales, disregarding deductions, avoidance and evasion, and confining attention to single taxpayers. The results are perhaps not surprising, but certainly disturbing
Single taxpayers on average weekly ordinary time earnings faced an average income tax rate of 22.8 per cent in 1996, and that will be pretty much unchanged at 22.2 per cent when the second stage of the Budget tax cuts are phased in in 2006. Since the GST has come in in the meantime, raising more revenue than the indirect taxes it replaced, we can conclude the tax rate for this group has risen. Also, since the mean exceeds the median, this means most single wage- earners are paying more tax than they did in 1996.
The effect is stronger ot 0.6 times AWOTE, where the average income tax rate has risen from 15.4 per cent to 16.9 per cent. On the other hand, for those on 1.5 times AWOTE, the average rate has fallen from 29.4 per cent to 26.2 per cent, and for those on twice AWOTE, from 33.8 per cent to 30.1 per cent.
Since someone is bound to jump in and point out that this is still a progressive system, let’s remember that the income tax is just about the only progressive element of the system. Except for the bottom 20 per cent, the tax system as a whole was roughly proportional before the latest changes, and is likely to become increasingly regressive if policy continues along these lines.
Andrew Leigh has a different way of looking at the numbers, but reaches much the same conclusion.
My AFR piece tomorrow will deal with the expenditure side of the Budget, but I also plan a piece on the tax side. My immediate reaction is the same as everyone else’s – these cuts are amazingly skewed towards upper-income earners, with no-one on less than $55 000 per year getting more than a $300 tax reduction. This is about 9 months worth of bracket creep for someone on $40 000/year, but it’s apparently supposed to last for the rest of this government’s term in office, given the allocation of future tax cuts to the top end.
I’ll try to have a more detailed analysis soon.
There’s more from Ken Parish, Andrew Norton and Flute
Via Senator Andrew Bartlett, I see that The Independent is campaigning for electoral reform in the UK, following Labour’s re-election with only 36 per cent of the vote.
Leading opponents within the government are named as John Prescott and Ian McCartney and the story also mentions that Many union leaders also fear it will lead to coalition government with the Liberal Democrats, and prevent Labour from governing again with an absolute majority.
I imagine that the opponents regard themselves as hardheaded realists, but it would be more accurate to view them as reckless gamblers.
Peter Hartcher also thinks that Costello’s best option for becoming PM is to go to the backbench (thanks to Jack Strocchi for the link).
Nick Caldwell, who kindly helped me out yet again with the site design has asked me to write a post on what I like about cultural studies, following up similar posts on John Howard and postmodernism.
Being focused on martial arts at the moment, I’ve run across quite a few references to boxing, an activity which continues to mystify me. My big question about is: whose idea was it to give boxers gloves? It seems like a recipe for protecting the fists (the bit that hurts most, in my experience) while maximising the potential for brain damage, thereby being simultaneously wimpy and deadly.
I also saw in the UQ News a story about the exclusion of women from boxing, which made the obligatory reference to Million Dollar Baby, a film I haven’t seen yet, though I plan to. It struck me that, of the sports I’ve had any involvement with [not that many, I admit] karate is easily the most gender-integrated. Women and men routinely train together, and, in my experience around 30 per cent of the participants in the average tournament would be women.
I’m not suggesting that non-Western martial arts are some sort of gender-neutral utopia, but the contrast with boxing is still pretty striking.
I’ve been away at the annual Seiyushin karate camp, and have returned to find my broadband connection not working, and my fallback dialup options plagued with difficulties. So you’ll have to provide the content yourselves, just for the moment.
You are invited to post your thoughts on any topic. I’m still planning a May Day post on labour issues, but I’d be interested in your thoughts. Civilised discussion and no coarse language, please.
John Quiggin 