Comments on: Tax and super

By: Brendan

Brendan — Tue, 04 Mar 2008 11:41:30 +0000

“substantially increase taxes on higher income earners - you know, just until the inflation threat recedes.”

I couldn’t help but laugh at that one.

By: Russell

Russell — Sun, 02 Mar 2008 01:09:32 +0000

Conrad,
If Andrew says we have to ‘ease demand’ than why not increase taxes on middle income earners and substantially increase taxes on higher income earners - you know, just until the inflation threat recedes. There’s a helluva lot of demand for multi-million dollar mansions, Maseratis, million dollar yachts etc in Perth - that’s a demand that could be cooled.
On the other hand the WA government has announced plans to spend billions on assorted stadia, new trophy hospitals, and trying to make Dullsville more ‘exciting’ - surely that’s very inflationary, given our overstretched building industry, and the money would be better spent paying off state debt.
(Would it be very inflation-causing to abolish university fees ? There’s an idea …..)

By: conrad

conrad — Sat, 01 Mar 2008 20:36:14 +0000

Russell,
(1) can you suggest some better ways for controlling inflation in the short term (as in now, when it needs to be controlled) excluding cutting government spending and higher interest rates?
(2) As far as I’m concerned, you should be asking groups that pay a net positive amount of tax whether they want to pay more tax for better services. Otherwise you are essentially asking people whether they want someone elses money, which comes to a rather unsurprising answer.
(3) You might also like to ask them whether they think there are any long term effects of high tax rates and the government running everything before accepting their answers (most people don’t think about this). Obviously there’s some trade-off between these factors, but if you want to see where it has gone too far, then I recommend you go to some of the high taxing European countries. Having 85% of the young people in your country aspiring to join the public service (and the rest probably moving to London or the US to get away from them) is not exactly condusive to a great future (note that people in the 25-35 group are some of the few that pay a positive amont of tax — so losing them is super problematic — especially because everything else they have done, like university, is free). Even the countries that everyone likes to think of as shining examples (versus France and Germany), like Denmark, start worrying about this problem, as evidenced by recent debate (try googling it).

By: Russell

Russell — Sat, 01 Mar 2008 12:50:06 +0000

“The poll question I’d like to see is whether people support cuts to government spending as an inflation remedy”
We’ve seen those polls that show that people are prepared to pay more tax for better government provided services, so normally you wouldn’t expect people to vote for cuts. They want better services not less.
As for inflation, people might want to hear about more options for controlling it, before they would approve of cuts to public spending.

By: Alastair

Alastair — Sat, 01 Mar 2008 04:24:54 +0000

I like the idea of giving taxpayers the option of choosing whether they’d like the tax cut now or put it into their super contribution for later.

This would allow Labor to keep their election promise whilst taking some pressure off inflation as some people will clearly be in favour of putting their tax cut into their super.

By: Ken Lovell

Ken Lovell — Sat, 01 Mar 2008 01:07:20 +0000

I assume the poll included retirees who don’t pay tax (lots of them in Queensland!), who therefore have the luxury of offering a response that is not only fiscally righteous but also might keep inflation down, which happens to be in their interests.