I posted this analysis in December, suggesting that, once the necessary compensation is paid for, an increase in GST wouldn’t be worth the effort. Apparently Treasury modelling (which I haven’t yet located) produces the same conclusion. Given that everything is supposedly on the table, maybe it’s time to look at some new options. An obvious example is inheritance taxes, which raised a fair bit of money before being scrapped in the late 20th century. As the inequality of wealth increases, the case for such taxes becomes every stronger.
Repost
The Grattan Institute has just released a report suggesting that the government should get more revenue from the GST, either by broadening the base to include food, health and education (yielding an extra $17 billion) or by raising the rate to 15 per cent (yielding an extra $27 billion). As you’d expect from Grattan, the analysis is sound and careful. As long as you accept the standard framing of the tax reform debate, in terms of the need to shift from direct to indirect taxation, it is reasonably convincing.
Grattan suggest using 30 per cent of the extra revenue to increase welfare payments and 30 per cent in cutting the bottom two tax rates, thereby compensating low income earners. The overview concludes:
Around 40 per cent of the additional revenue from a higher GST would be left over after welfare increases and tax cuts. At least some will need to go to state governments to help them address their looming hospital funding gap, as the price for their support of the change. This would leave a little – but not much – to reduce the Commonwealth’s budget deficit, or to pay for other tax cuts that promote economic growth.
(emphasis added).
Is that enough to sell the package? I can’t imagine the states going along with a deal like this for less than 20 per cent of the total extra revenue, which implies the Feds are left with 20 per cent, somewhere between $3.5 and $5.5 billion. From a political viewpoint, it’s hard to see this being worth the effort for the Turnbull government, especially with no guarantee of success.
As a comparison, the FBT concession for motor vehicles, reinstated by Tony Abbott costs the budget around $1.5 billion. Exemptions for non-profits, which have been comprehensively rorted, cost at least as much. Add in a few ‘rats and mice” concessions, and the Federal government would have as much as it could get, in net terms, from the Grattan package (Getting rid of the non-profit concession would probably require some compensating expenditure, but the same is true of the health and education concessions under the GST.)
That’s before we get to the elephants: superannuation concessions (also supported by the Grattan report), corporate tax avoidance, land tax and higher income taxes for (say) the top 5 per cent of income earners (reflecting elite opinion, the Grattan report suggests cutting these rates). All of these are hard, but not obviously harder than the GST.
So, why is GST reform at the top of the government’s list? The answer is simple enough. The advocates of reform haven’t had a new idea, on taxation or anything else, in 30 years. They didn’t get the GST out of Keating’s Tax Summit in 1984 and they didn’t get the version they wanted from Howard and Costello in 2000. So, the same old idea keeps on coming up.
John Quiggin 
@GrueBleen
$75,000 in 1983 is $228,447.67 in 2015 dollars.
So, in your case your real gain is only 3.4% pa (compounded). Which is quite good as it is safe and secure.
Australia’s economic growth has been similar so you have probably just maintained equity in society.
See: http://archive.is/1E8LS
I find it hard to support any additional land tax on this given the % fees and duty you paid purchasing the house, maintaining it and what you will have to pay to realise your equity.
So I cannot see any so-called “economic rent”.
If anyone tries – you are right – its time for a tax revolt.
Land tax is revolting.
Yes, tax it. Let the issue shift for themselves..
@GrueBleen
1. I refer back to my post at #3 regarding my suggestions as the structue of an inheritance tax. May I suggest you interpret these statements.
2. May I point out Rupert Murdoch is still alive.
@Ernestine Gross
“2. May I point out Rupert Murdoch is still alive.”
You may, and may I point out that at no stage did I state, suggest or even hint otherwise ?
And may I express my great regret at wasting both our time by attempting to communicate with you ?
@Ivor
“maintained equity in society”.
Let me see. Looking at the ratio of my property’s value to my gross annual salary, I’d say you might be right, the ratio was essentially unchanged. Whereas by comparison, the ratio of the price of a motor car had noticeably decreased in comparison with my salary. 🙂 The ratio has increased a bit since, but that’s because my property value has increased but, since i am now over 7 years fully retired, my (then) salary hasn’t changed.
But “safe and secure” ? Only because Australia didn’t suffer a major housing value collapse like the USA (parts thereof) and the UK. If we had, it wouldn’t be 3.4% compounded, and it wouldn’t have been “safe and secure”. So thankfully the Gang of Four (Rudd, Gillard, Swan and Tanner) followed Ken Henry’s orders to “Go hard, go early, and go households” (well mostly, I don’t reckon school halls were exactly ‘households’).
Do you reckon if I’d put $75,000 (which I didn’t actually have as a lump sum, of course, but if I had) into, say, term deposits it would have come to $670,000 by now ? Especially paying income tax at the marginal rate on all the annual interest payments.
Your link indicates why Australia is the world’s 12th largest economy by exchange rate value despite having only about 0.3% of the world’s population. Unfortunately, it is almost certainly the most expensive ‘developed economy’ country to live in if you notice that we’re only the 19th largest economy by PPP. So it goes.
Anyway, glad we can count on you if the revolution comes. (Bring out the pitchforks !)
@Ivor
Surely the argument should be why wouldn’t you tax property that does not generate taxable income? Why should someone get away scott free just because they never put their property up for rent?
Simply wrong. PPOR land does not lead to any income tax or capital gains tax.
As I said Ivor, come back when you can leave out your false assumptions. Your repetitious falsehoods are getting tedious.
@Chris O’Neill
Well I won’t pretend to be fully familiar with the meaning(s) of ‘economic rent’ but I’ll take the descriptive statement (from Wikipedia) that “Economic rent should be viewed as unearned revenue…”
So now that leaves me with a couple of difficulties: 1. admitting that the value of my property is somehow “unearned” and 2. “who do you think should eventually end up getting this economic rent on your property, even if you don’t ?”
I guess the value of my property might be considered “unearned” if somehow the value of my property had increased when the value of other properties hadn’t (or had simply increased more rapidly). But mostly that isn’t the case, and the value of many other people’s property has increased proportionally more and/or faster than mine. So, do I deserve a share of the ‘economic rent’ comprising increased value of property the value of which has increased faster than mine ? If yes, then I’ll take it, if not then why should anybody else share in my ‘economic rent’ ?
The other side of this coin is use of the word “should”. Now you might mean that economically – ie let us pursue the impossible dream of maximizing efficiency (ignoring effectiveness, BOC) by allocating the ‘economic rent’ of my property to some economic agent who will maximize the return to the overall economy. Is that what you had in mind ?
Or is the “should” a matter of morality – does someone(s) “deserve” to share my property’s ‘economic rent’ ? But I don’t have either a deontological or utilitarian morality schema that unequivocally tells me these things – do you ? If so, or if you have any other morality schema that is, at least in your judgement, ‘superior’ to deontological or utilitarian schemas, then please communicate same.
In the meantime, I think I’ll go with Ivor’s analysis 🙂
@GrueBleen
No – it only works if the interest compounds. Depositing 75,000 1983 dollars in a term deposit can never give you $670,000 in 2015 dollars if you withdraw the interest.
However sticking $75,000 into an Australian superannuation fund in 1982 would probably have given you over $670,000 in 2015 if average rate of return was 7.1% (nominal $).
Superannuation (particularly industry super) and home ownership are the only ways ordinary workers can protect themselves under capitalism.
> 1. admitting that the value of my property is somehow “unearned”
Does the land become valuable because of stuff you did? Did you lay in a sewer, build a nice house, fertilise the paddocks and drain the swamp? Is it irrigated, does it have an airport? “Earned”.
Does the land become valuable because of stuff other people did, or stuff that happened naturally? Is it next door to a train station or a major shopping centre? Is it naturally fertile, or laden in copper ore? “Unearned”.
@GrueBleen
What is the reason for that last condition?
Yes, the winners-and-losers argument. Don’t base tax policy on principle, base it on who has the most political influence. I guess humans will never change.
You probably need to read a bit more about economic rent and also economic efficiency. Various taxes are “economically” inefficient because they discourage productive activity, e.g. income tax on labour is economically inefficient because it discourages labour that is taxed. So it encourages people to work for themselves tax-free rather than earn more and pay someone else to do something for them, even though they’re not as efficient doing it themselves.
Taxes on economic rent, on the other hand, are economically efficient because they don’t discourage economic activity. Taxing real growth in land value doesn’t discourage any productive action the way taxing work does.
You didn’t produce your property’s economic rent (that comes from community influence), so why should you share it more than anyone else?
But you still haven’t answered the question, who should end up getting your property’s economic rent, when you pass on I mean?
@Ivor
You forgot to mention buying shares themselves. They have to put up with the marginal tax rate on the gross dividend, but at least they can avoid the capital gains tax by not selling. Works extremely well for some shares.
@Chris O’Neill
Shares are a means for workers to share in the profits of capitalism but not in the bad times and the Japanese stock market demonstrates the risks involved.
The best way to get secure return from shares is through a industry super fund.
Share funds indexed to the all-ords are an option but there are greater risks.
Despite ups and downs, the Australian share market has shown no growth over the last 10 years.
All ords – Feb 1, 2006 – 4,878
All ords – Feb 1, 2016 – 5,094
And the next 10 years do not look promising.
Can anyone point me to a resource which explain more fully the events which led up to former Prime Minister Howard introducing legislation for the “never ever” Goods and Services Tax (GST) after the federal elections of October 1998? My own recollection is this:
Prior to 1998 John Howard had adamantly insisted that he would “never ever” introduce a GST.
Then in 1998, just a few months prior to that surprise early election, he set up a supposed Parliamentary inquiry into “tax reform”. One of the Federal Liberal members resigned from that Inquiry committee and the Liberal Party after he realised that it was not an inquiry, but merely a vehicle to promote the “never ever” GST. After the inquiry concluded, Howard suddenly called the early election, but refused to make the inquiry report public until after the election.
Howard lost the two party-preferred vote, but still narrowly won the election in the House of Representatives. He also failed to get an overall majority in the Senate,
After the public were finally able to read the contents of the ‘inquiry’ into “tax reform” Howard claimed a mandate to introduce the GST over the loud objections from the Australian community. He was able to get his legislation carried through the Senate with the help of a renegade Democrats Senator Meg Lees.
@Ivor
Owning shares through a share fund has the same risk as owning the same shares directly. Only differences are the fund manager fees and the possible difference in tax status of the fund (such as for a super fund).
Good cherry-picking Ivor. Well done.
By the way, CBA – Feb 1, 2006 – $44.26
CBA – Feb 1, 2016 – $78.22 with a 7.7% gross dividend yield over the past year.
But we all know we shouldn’t cherry-pick, don’t we Ivor?
@James
That woman put up some absolutely bizarre arguments. Like a card player saying she didn’t know what to do when she held all the aces.
Good on you, James.
It is great to see that at least one person out there has a memory and can keep track of the procession political of deceit. I’ve saved your account so that I can add the next stage in our passage towards the Friedmanian economy.
@Chris O’Neill
Those who only look at best performing stocks and not the whole market are the cherry pickers.
Fools and their money are soon parted.
@Ivor
Well spotted Ivor. As I said “we all know we shouldn’t cherry-pick, don’t we Ivor?”
Said cherry-picking includes specific dates.
Pity you didn’t spot that Ivor.
@Ivor
By the way Ivor, you didn’t seem to notice that your favourite way of owning shares, industry super funds, buys part of the same Australian share market that you have a problem with.
I used to be a big fan of death duties, but am a lot cooler on them than I once was. All experience is that they can never be big revenue raisers – at the very most a nice little earner for the government. The reason is twofold – first, heavy ones are easily evaded (and hence are pretty arbitrary in their incidence). Secondly, you’re taxing a once-in-a-lifetime event, unlike a very common event like earning and spending.
I think the great virtue of a GST is NOT the economist’s one about exempting saving; it’s that VATs are pretty hard to evade on a large scale (basically because businesses have a financial incentive to dob in downstream evaders). Not impossible, but definitely harder than personal income tax and much harder than corporate taxes. So a GST is, relative to these taxes, not nearly as regressive as people think.
But the signals we’re getting now are that Mr Turnbull has made similar calculations to John’s and concluded like him that the game is not worth the candle.
@Chris O’Neill
So what date would you pick to go back from today, 10 years ?????????????
What other dates would you use to demonstrate my statement:
Just because you know a word exists doesn’t mean you can use it whenever it suits you.
@Chris O’Neill
Oh pish tush Chris, she was being shamelessly ‘duchessed’ by John Winston (who seemed to have some actual affection for her – maybe because she reminded him of his wife).
But four aces or not, Meggles certainly knew how to ‘flush’ a political party which she did to the Democrats – along with her gang of 3 1/2: Aden Ridgeway, Andrew Murray, Brian Greig and Lyn Allisaon (who always had at least one buttock on the fence) – when they passed Howard’s GST in the Senate.
With Natasha and Bartlett ‘dissenting’ – which is quite strange because it was Stott-Despoja and Bartlett who actually followed Democrat Party policy and it was Meg and the Gang who were the actual dissenters.
@Ivor
“Depositing 75,000 1983 dollars in a term deposit can never give you $670,000 in 2015 dollars if you withdraw the interest.”
Correct me if I’m wrong, Ivor, but if I withdraw ALL of the interest every year, then I’d just end up with $75,000 (nominal) even after 1,000,000 years. So no, I think I could probably be relied on not to withdraw ALL of the interest every year. But I still have to pay income tax on the interest earned, and I have to get that from somewhere.
So, say after many tears, my fund has got up to $600,000 with (nominal) 4% interest (which I used to get once upon a time). Then that year’s interest would be 600,000*0.04 = $24,000 so I might have to find as much as $12,000-$15,000 to pay for it.
“Superannuation (particularly industry super) and home ownership are the only ways ordinary workers can protect themselves under capitalism.”
Let me tell you about my super Ivor: I entered (forcibly) into the super scheme way back in the early days – when it was only 3% or so IIRC – and stayed in for 13 1/2 years in a company super fund until I retired. At the end of that time, the net result of fund earnings minus expenses and minus the fabulous triple tax that applied for nearly all of that time, was that my takeout super at retirement was actually less than the simple sum of all my contributions over 13 1/2 years. In short, if I’d just been allowed to take the cash and stash it under my bed (along with all the reds to guard it, of course) I’d have done better than having it invested in the fund.
Now that’s what I call “worker protection under capitalism”, don’t you ?
@Collin Street
“Does the land become valuable because of stuff you did? Did you lay in a sewer, build a nice house, fertilise the paddocks and drain the swamp? Is it irrigated, does it have an airport? “Earned”.”
And so on and so forth. Ok, Collin, you’ve got me, my “economic rent” is entirely unearned. So I guess I’ll just have to pay up via a land tax to distribute that “rent” to the entire population of the Earth. But hold on, wait a minute, every other ‘property’ on the planet also has “unearned” value, which the current possessors will have to pay land tax on to be distributed to the entire population of the Earth which, of course, includes me.
So, just as soon as I see my cheque from the rest of the planet, I’ll post mine to the rest of the planet. Scout’s honour.
In the meantime, of course, I am looking at another great store of unearned value: private share ownership. Mostly that just means people getting some money together and buying some shares in an established and profitable company: much as i did in buying my “unearned” house – but of course my interest payments to the bank (non-trivial, I assure you) helped to finance loans for other people to do “earned” things, like starting (small) busineses.
But what did your average share owner do to “earn” the dividends and (sometimes) capital gains from the owned shares ? I repeat: absolutely nothing, of course other than just buying the shares (as I bought my property) so it’s all unearned. I therefore propose a share ownership tax the takings of which will be distributed to everyone in those countries where the company does business.
We’ve gotta be consistent, now, don’t we.
@Chris O’Neill
Well, you might have to refer back to your own post, Chris, but here goes.
“What is the reason for that last condition?”
Err, because i want to impose it because i can ? But mainly because if the value of my property increased when the value of others didn’t then I would clearly have been the benefactor of some individual luck. Wouldn’t I ?
“Yes, the winners-and-losers argument. Don’t base tax policy on principle, …”
Is that some snarky little comment implying that I’m some kind of unprincipled greedy type ?
Well I only have one comment on this: whose principles and which principles, Chris ? Do you have some license that entitles you to be the chooser and arbiter of principles ? Is this why you didn’t answer and won’t even acknowledge my question to you about whether you have a ‘superior’ moral schema ?
“You probably need to read a bit more about economic rent and also economic efficiency.”
Possibly. And possibly I need to read a bit more about tensors and Riemann spaces too so that I could read and maybe begin to understand Hilbert’s and Einstein’s original papers on General Relativity. Or maybe read a bit more about David Mermin’s concepts regarding ‘explanations’ versus ‘descriptions’. Or even try to catch up with the Hilbert Program and find out where, if anywhere, it stands today (though I may need to consult with Donald Oates about that one).
So much to learn, so little time.
“You didn’t produce your property’s economic rent (that comes from community influence),…”
So you reckon it was the ‘community influence’ that saved up the deposit, and worked hard to pay off the bank loan thus helping to maintain and increase property values the way we’ve become used to. And if I hadn’t done that, and nobody else had, nonetheless a pool of unsold property would not have diminished any property values. Gee, there’s lots of folks in the USA and UK who would like to know that.
“…who should end up getting your property’s economic rent, when you pass on I mean?”
What kind of question is that ? Do you really think I am the least bit interested in anything that happens after I die ?
But if you mean do I have a preference as to whom the ownership of my property passes when I, and my co-owning partner, die ? Because if it’s me first, then ownership goes to my partner.
But whichever of us is last, and assuming we haven’t had to use the results of selling our property to pay for our last few years of aged care (thus foresightedly removing that cost from taxpayer funded welfare – would that benefit anybody d ‘you think ?), then ownership of our property will be passed to the RSPCA. No, human beings can never change.
@GrueBleen
So purely arbitrary and determined by self-interest.
and also some individual luck compared to those whose property value hasn’t grown much at all or who don’t own any property at all (lazy sods I know).
There may be some truth in that.
I don’t answer gotcha questions.
Har, har, very funny GrueBleen. You’re such a comedian. I could remind you that the subject being discussed here is economic rent and economic efficiency as they relate to property ownership, not relativity, but my reminder would probably fall on deaf ears.
You appear to have a strong desire to not know what economic rent is (heaven knows why) but just in case you do, the economic rent on your land is the real capital gain on it, not what you paid for it.
The increase in your land value had very little to do with you owning it. It could have been left vacant for the past 30+ years and still achieved the same increase in value.
OK. So you agree that the value of your property depends on what everybody else does too. That’s my point.
So you do have an interest in what happens to it after you die. It’s confusing when you contradict yourself. The point is that the community should have a say in what happens to the part of the value of your land that it created.
hallelujah
Tory toy boy Turnball has turned around.
No GST.
So who will they go for now – anyone but capitalists I reckon.
@GrueBleen
Very little of the growth in share value comes from community investments, unlike the growth in land value. Every share is subject to capital gains tax when it is sold, unlike PPOR land.
@Ivor
The point is, Ivor, that there is nothing valid about picking any particular date which just happens to suit your argument. You are reminding me of the global warming denialists who like to come up with phrases like:
“no statistically significant warming since 1998”.
That, of course, is a blatant cherry-pick. Yours is a cherry-pick too, even though you want to ignore that fact.
I’ll leave you to your favourite method of share ownership, the industry super funds. Let me know how you go when you inform them that the Australian share market has shown no growth over the last 10 years. I have the feeling they won’t have a great deal of interest in listening to you.
@GrueBleen
Thanks. There had to be some motivation for her bizarre arguments.
@Chris O’Neill
So what date would you pick to go back 10 years from today.
@derrida derider
Is there something wrong with having a nice little earner?
Taxes involving land are pretty difficult to evade. If the tax isn’t paid, the government can seize the land. Councils do it regularly.
I don’t know why that’s a problem.
> So what date would you pick to go back 10 years from today.
The answer to the question doesn’t mean what you think it means. We can’t say, “[answer]“, because you’ll take it to mean something it doesn’t, we can’t say “[answer that isn't right but would be taken by you as having the implications the actual answer actually has]“, because then you’ll protest — and rightly — that the answer isn’t correct.
And if we say — as people have — that you’re asking the wrong question you’ll ignore that and keep asking anyway.
There’s nothing he can tell you that will convey to you how he sees reality.
So you’re stuck. You’ve trapped yourself in your own conceptual frame. Which would be fine if it’s correct… but it might not be, and you have no way of testing it.
[the errors you make are not generally the errors you expected to make, because you guard against the problems you know about. Your actual errors will show in ways you aren’t expecting, aren’t looking for, and generally won’t have a response to; this little “eh?” moment is what you look for, so you can recognise the errors you’ve actually made and fix them. Learned skill, this, like most of the things that go towards being “clever”.]
@Collin Street
You objected to the dates … you made the accusation, you created whatever framework, so
What date would you pick to go back 10 years from today???????
or in the alternative …
do you now accept that Feb 2006 is a relevant date to be 10 years from Feb 2016?
@Chris O’Neill
Chris, the point is that death duties raise too little revenue to do their intended job of soaking the rich. Of course land taxes are hard to evade – but that just means that where there are heavy death duties the rich try not to die owning much land, at least directly. Only foolish English aristocrats insisted on keeping their ancestral home to the death so that Labour governments got it.
And the point of my ‘once in a lifetime’ comment is that the stock of assets held is small relative to the flow of 80+ years of earning and spending, which is another reason death duties don’t raise near as much money as people tend to think.
If we were starting with a blank slate I’d have death duties as part of my tax system, but my point is they’d only ever be a fairly small part,
Thank you Chris O’Neill on February 7th, 2016 at 01:22 and BilB on February 7th, 2016 at 08:47
Chris O’Neill wrote:
Another more recent example, is Senator Barnaby Rubble – sorry, Joyce, who promised at the 2004 Federal elections to oppose the privatisation of Telstra (or was it then still called ‘Telecom’?). After he got elected, he voted for privatisation, contrary to what he had told voters. I recall that his one vote allowed the legislation to pass the Senate. If he had voted against privatisation, Telstra would have remained in public hands.
Of course, as he did with the GST, Howard said almost nothing about Telstra during the 2004 elections and again, after the vote, claimed a mandate for a policy, about which he and the newsmedia had intentionally kept the public in the dark during the previous election.
For his part, Kim Beazely refused to commit Labor to reversing privatisation should Labor have won the following election.
On the GST election rort, I found myself unable to find any information on Hansard about the 1998 committee to supposedly ‘investigate’ ‘tax reform’. I am sure that an exhaustive search through the 1998 Hansard pdf files would reveal the information, but does anyone know the name of Liberal member, who, upon realising that it was only a vehicle to promote the ‘never ever’ GST, resigned from that committee?
Bilb wrote:
Thank you. Please feel welcome to visit my own web-site, candobetter _dot_ net which is linked to, over to the left.
On that site, we try to cover a range of topics which we consider critically important, but which are not given space on any other Australian blog site of which I am aware.
@derrida derider
Sounds like your objective is revenge on people for being rich. Well, class warfare might be a lot of fun but I don’t think it should be a government objective in itself. A far more appropriate objective for a government is to raise taxes in equitable and efficient (in every sense of the word) ways. Hence death duties, especially death duties on land.
So how does that become an argument for having zero tax on PPOR land? That’s like saying we should make income tax flat because the rich are good at avoiding tax! And even if death duties were so high as to encourage the rich to dispose of land there should still be economic rent tax on the disposal of land which should be the same rate of tax anyway. Death should just trigger the same economic rent tax as a normal transfer.
I did no such thing. Check the names: things with different tags attached are written by different people, you know [have I told you this before? I may have]. I am trying to explain to you why you’re running into communication problems, which is as I said because you’re trapped in your own conceptual framework and so don’t read what people actually wrote, leaving people with no way to communicate how they think your conceptual framework is in error.
This is a very interesting idea – I like it!
@Collin Street
So if you did “no such thing” then you obviously did not make any accusation of cherry-picking.
Maybe you would like to explain that communication that you made.
Instead of flaying around with all manner of diversions why don’t you just retract your false accusation.
If you do not think “cherry-picking” was what you actually wrote – what did you actually write?
If you now accept the dates I used then say so. Is this communication from you possible?
Very few people realise how very rich the rich people are in this country. If string cost a thousand dollars a millimetre the poorest 10% of Australians could afford enough to measure the joint of their little finger. The average household would have under half a metre. Gina Rinehart’s allocation would stretch from Federation Square to Tullamarine Airport, as the crow flies. Do the math.
Gina Rinehart and the Pratts, together, have 27 1/2 billion dollars. That’s ever so slightly more assets than the bottom 14% of Australians put together, right there.
Rich people in this country sit on heaps of treasure like Smaug on his hoard, flying out to attack anybody who wants to diminish their wealth by a farthing. Their influence distorts our politics, our economics, and our media. Politicians, and ex-politicians, compete to lick their boots.
Bring back death duties for estates over, say, fifty million dollars. It’s not as if Gina want to pass it on to her children anyway.
Ok, looking at the fin review piece I see I’ve been using outdated figures. Make that halfway to the airport. Still.
@ChrisB
How far would $200 trillion of global debt reach?
Jeez, Chris – I’m an old Georgist who believes the unearned increment of unimproved land is a pure rent that could and should be taken away by governments. Yes, tax land heavily – but a regular property tax has got little to do with arguments about death duties.
My purpose here is to hose down nice lefties who think you just have to put big death duties on “the rich” to transform society. As should be clear by now I’m not a strong opponent of death duties but a lukewarm supporter. Lukewarm, because their effects – good and bad- are just much smaller than people think; death duties confiscating much of the estate above a threshold of $50m would yield negligible revenue, though may perhaps entertain the populace by creating even more perverse behaviour among family dynasties than we already see.
@derrida derider
Unfortunately you are the one who needs to be hosed down.
Proposals for death duties over a threshold are supported by progressives across the political spectrum. So where is your evidence of some “big death duty”????
Only capitalists lust to keep their ill gotten gains even in their graves and part of their project is to argue for a threshold of an enormous $50 million. What is the point of pretending you support death duties if it is handicapped by such a self defeating provision?. These same people often call themselves Georgists.
A properly designed death duty – or probate tax – would go a long way to countering inequity.
However it will come as a bit of a shock to you, but the better elements of Australia’s left realise that it is far better to correct injustice as it occurs and not rely on taxing the damage after it has been done.
Under socialism there will be no need for death duties.
@derrida derider
Not that little. Death is one of the best opportunities for taxing economic rent – hence its relationship to death duties. It’s all very well to sit in an armchair and tell everyone there should be a general land tax, but as long as imposing a new land tax causes a capital loss to the owners, you can expect it to be fought tooth-and-nail by those land owners. You might be interested in hypothetical tax systems that have little or no chance of being imposed any time soon but I have some interest in the issue of political feasibility.
There’s no reason why taxes assessable on death, such as on economic rent, have to have a threshold anything like $50m. As far as economic efficiency is concerned, for example, there is no need for a threshold.
It depends on which 80+ years of earning and spending you are talking about. If you’re talking about 80+ years of the heirs’ lives then the net present value of the inheritance is worth at least as much as the net present value of the earnings from the assets that the heirs inherit, so the value of the inheritance is worth a relative lot.
@Ivor
I can see that mixing up identities is another one of your cognitive failures.
But presuming that you’re still whining about being accused of cherry-picking to me with:
I don’t accept your presumption about 10 years.
Obviously the point about global warming denialists cherry-picking 1998 as a starting point when it suited them (it doesn’t generally suit them anyone) was lost on you. So I doubt you’ll be capable of getting the point about timing cherry-picks anytime soon.
And for some reason you choose to ignore the significance of the fact that your favourite method of share ownership, the industry super funds, were invested in Australian shares on the 1st February 2006. You don’t seem to have a problem with them owning Australian shares on the 1st February 2006 but woe betide any individual who also owned Australian shares on the 1st February 2006, according to you. Just another one of your cognitive failures I guess.
@Chris O’Neill
You do not have to accept 10 years but it is a industry standard.
And not accepting industry standards does not allow you to falsely accuse others of cherry-picking.
What period do you want – and what is an example of it being used on most financial websites.
All the rest of your smoke and mirrors can be ignored.
@Ivor
The thread has been derailed. I assume it doesn’t matter now if I add a line.
On your intertemporal spot check of ASX index data, I agree with you, you weren’t cherry picking. (Even if you had picked a number from August 2007 and compared it with a number from 2016 to arrive at a non-negligible negative rate of return, I would not accuse you of cherry picking. I would first assume you use a few numbers to raise some questions – off topic though.)
So if you did “no such thing” then you obviously did not make any accusation of cherry-picking.
That’s correct. The posts making the accusations of “cherry-picking” were made by a person using the handle “Chris O’Neill”; the posts suggesting that you appear to have difficulties with processing unexpected information were made using the handle “Collin Street”. These are different people, to the best of my knowledge, and since I’m one of them — and to the best of my knowledge only one — I think my knowledge is reasonably reliable.
Maybe you would like to explain that communication that you made.
If by “that communication you just made” you mean my explaining why you are trapped by your own conceptual framework, then: Probably not, unfortunately.
[“trapped by your conceptual framework” -> “ideas outside your conceptual framework cannot be explained to you”. If I’m right, and if your conceptual framework doesn’t include the idea of being trapped this way… then, yeah. You’re jiggered, aren’t you.]
If by “that communication you made” you mean the accusations of cherry-picking: no, I cannot explain them, as they — the “communications I made” concerning cherry-picking — do not exist. Those comments were made, as I said, by “Chris O’Neil”.
Instead of flaying around with all manner of diversions why don’t you just retract your false accusation.
I have made no false accusations: see below. The accusation you are concerned by was not made by me.
If you do not think “cherry-picking” was what you actually wrote – what did you actually write?
I wrote that I think you are trapped by your own conceptual framework and unable to process ideas that you aren’t expecting, like the idea that the person who accused you of cherry picking and the person who accused you of being trapped by your own conceptual framework are different people.
If you now accept the dates I used then say so. Is this communication from you possible?
This, also, is the wrong question, because it’s rooted in the assumption that I have anything to do with the discussion on the applicability of the dates posted. I have said nothing on that topic.
Are we clear? You are conflating comments made by two different people. And are continuing to do so, despite the error being explicitly pointed out to you.