In the 1950s, Australia had a tax system made up of just over a thousand pages of law. That’s now more than 14,000 pages. And that’s not because the world has become more complex.
The major parties have used the tax system over the decades to buy votes for re-election, to serve vested interests rather than serving all Australian taxpayers. Some tax cuts here, some deductions there, some more income tests for them, and some more offsets and rebates for others.
Tax complexity unfairly taxes those unable to afford the best accountants to minimise their tax. And we have bracket creep, which penalises you with a higher tax rate for receiving a pay rise. The result is a broken tax system, hand in hand with a broken welfare system.
Under two broken systems, you have the working poor paying high effective marginal tax rates thanks to welfare churn. That’s just cruel and discourages workforce participation. You should not be penalised for wanting to contribute to society.
It’s time to replace the Australian tax system with one tax. A flat tax. One flat income tax for all individuals and companies (the same rate for both). No deductions, no income tests, no tax brackets, no offsets and rebates. Just one tax for all Australians. And a higher tax-free threshold for the working poor – they deserve it.
No 14,000 pages of tax law, no tax avoidance opportunities, just a simple inexpensive tax system run by a small Tax Office not getting in the way of life and business. A flat tax is progressive, and it’s not susceptible to vote-buying, serving vested interests, and bracket creep.
It should be left up to the States to raise extra taxes as required. States’ reliance on GST revenue, amongst others, from the Commonwealth fosters the blame game, as well as creating more red tape. Fostering competition between the States will go a long way to driving better services and lowering State taxes.
One tax for all Australians. One tax is a fair tax for a fair go.
One Welfare Payment for all Australians
Our welfare system is complicated, unfair, and ultimately hurts those who need it the most. Combined with our complicated, unfair, and hurtful tax system, you have the working poor paying high effective marginal tax rates, due to welfare churn. Government churns welfare with your taxes: government takes with one hand as it gives with the other. The cycle continues, and the mess snowballs.
Most (if not all) welfare payments should be replaced by a Negative Income Tax. A Negative Income Tax would be applicable only for those under the tax-free threshold, because welfare should only be for those that need it the most. And if we need to retain some welfare payment types, again, only for those who need it the most.
Australian taxpayers fund $23 billion a year for welfare for the wealthiest 20% of households. A family could be earning up to $240,000 a year and still be eligible for Family Tax Benefits. And millionaires can receive the childcare rebate because it is not means-tested. Our welfare system needs an overhaul. Welfare only for those that need it the most!
Expand Superannuation (to cover things like education, health, unemployment and disability)
Like other cruel taxes, tax on superannuation savings has to go. People work hard during their life for super funds just to live modestly during retirement, and the taxation of super, especially at a time where the age pension is increasingly unsustainable, is robbing Australians of a modest retirement, let alone a comfortable one.
The big government spenders are welfare, health and education. Why not expand the super system beyond retirement savings, to include all three big spenders? With an ageing population, tax revenue is likely to continue to struggle to keep up with demand for government-funded services. It’s time to give working Australians the tools to self-fund their welfare and health insurance needs, and self-fund their education.
Parents should be encouraged to kickstart their children’s super funds. At the rate the welfare state is growing, it’ll only be a matter of time before the party ends in tears. Transforming the welfare state into a self-reliant free society is one of the greatest moral challenges of our time. The time has come to overhaul the welfare state, and expand the super system. In fact, it’s overdue. It’s the right and urgent thing to do.