As Rajat Sood points out, the second poll on the flood levy has come out with an opposite majority conclusion to the first poll.
I’ve summarised the differences here:
Rajat thinks that question wording might have had an effect. Essential Research asked:
Q. Do you approve or disapprove of the Government introducing a one-off levy on taxpayers to pay for damage caused by the recent floods?
While Newspoll asked:
Prime Minister Julia Gillard has announced a plan to introduce a special levy to help pay for rebuilding of infrastructure in flood-damaged areas. Based on what you currently know, are you in favour or against the federal government introducing such a levy?
I think Rajat is right that question wording might be having an influence here. Polling has always shown more support for tax when it is to be spent on something voters generally approve of, and Newspoll’s question puts more emphasis on that angle, while Essential Research expressly mentions who is going to pay, which may push down support.
These differences, plus the way people seem to have followed their partisan cues, show that the public doesn’t have a clear majority view on this issue. I’m undecided on it myself. If the choice is a tax increase or spending cuts, I would opt for the latter. But if the choice is a tax increase or increased deficits, then we may as well pay now.
Andrew Norton 
Isn’t that interesting? Essential’s is certainly a badly worded question; “pay for the damage caused” makes it sound as if it’s going to people whose homes etc. were flooded, rather than paying for public infrastructure, so I can imagine people would be less keen on that. But it’s a remarkably large difference. (FWIW, I agree with you on the merits.)
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Newspoll was post-cyclone, which might have tipped opinion.
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Probably should also note that when the ‘flood levy’ was first mentioned, no one new who would pay. Now we know, only about 40% of people will pay the darn thing, so why wouldn’t the other 60% support it!….everyone has morality until it hits the hip pocket!
Anyway, can’t say I agree with the point on tax increases or increased deficits. I would choose the deficits. Two reasons – while you’re right that you should be indifferent in theory. However, in practive, if tax rates go up, they never go down. So best to let the deficit build, fight tax increases and pressure the gov to get the deficit down. There’s also the Republican party view, just let the deficit build and let so much pressure develop on the fiscal position that the gov has no choice but to make spending cuts. It runs the risk of bankruptcy, but if you don’t own US tsy’s, what would you care?
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“However, in practive, if tax rates go up, they never go down”
They’ve been brought down in every budget in the past six years.
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Sorry Son of Rat pack – Tax receipts have always been climbing. Tax to GDP has always been climbing. Just ask the A-nort – Tax freedom day. When is it now Andrew? September????????
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Tax cuts don’t reduce the tax take, but recessions do: http://www.cis.org.au/media-information/media-releases/article/1483-rejoice-tax-freedom-day-is-friday-9-april
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“Tax to GDP has always been climbing.”
22.4% this year. Over the past 30 years, highest was 25.6% in 2005/6; lowest was 22% (2009/10, 1978/9, 1993/4). Source: http://www.budget.gov.au/2010-11/content/bp1/html/bp1_bst10-04.htm
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I think responses to these sorts of questions can be quite fickle – mainly because people haven’t thought about them much – so that even quite minor changes to the wordings can make a difference. For example, if the Newspoll question had said “…special levy on taxpayers…” I reckon that could have triggered a different outcome. Or how about “…rebuilding of infrastructure that was not insured by the Queensland government…”?
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Another Essential Research poll, this time letting people choose as many budget flood response options as they like. At least cash for clunkers is rightly identified as the most ridiculous spending item.
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SOR – I think you’ll find that those figures don’t include the GST. Add them to those numbers and you might get a differrent answer. Also you forgot to add state and local taxes to Fed taxes. Sorry SOR, helps to spend some time in the Tsy.
…As I said, ask Andrew, when’s tax freedom day. He must have it in the diary!
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Baz, I think those figures do include GST, since it is now classified as a federal tax. GST in any case replaced WST and a host of other indirect taxes, and was accompanied by large income tax cuts. As for including state taxes, well yes, they should in principle be added, and local taxes as well. I guarantee that if you did add them, you would not got an increasing trend of tax to GDP. The states have not been successful in getting own source revenue. Are you sure you ever worked in Tsy? Not in the tax division by the looks of it.
R
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Baz There is a link to a tax freedom day press release in comment 6, which showed a decrease last year.
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Andrew, I know that promoters of TFD think that the size of the state is too big etc, but those taxes do buy us protection from Muslim terrorists, the institutions that protect our property rights, the roads on which we drive our private cars, subsidies to the Centre of Policy Studies and the employment of self-sacrificing public servants like Baz.
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That should be Centre of Independent Studies. Sorry for the confusion, but shit happens
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S of R – Tax deductions are a subsidy to CIS supporters, not the CIS. And I think we can take a reasonable guess that most CIS supporters still provide significant net subsidies to the state.
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“most CIS supporters still provide significant net subsidies to the state”
Presumably this means they pay more in taxes than they get back in services or direct subsidies, like for private school fees and private health insurance. I suppose that’s right. But how do you value what the state gives them in defence from terrorists and the Chinese, the institutions for protecting their property from the mob and the rule of law?
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I almost forgot
“Tax deductions are a subsidy to CIS supporters not the CIS”.
You can’t be serious. The whole point is to support the operations of the CIS.
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All charitable/educational deductions are intended to encourage donations, but they are paid out of private income. I don’t buy the social democrat line that all money is the state’s, and it generously allows private citizens to keep some of what they have earned to spend or give away.
The genuine public good element of government which taxation finances is a smallish % of total government expenditure, which is mostly income transfers and public provision of private goods. Classical liberals have never opposed public goods, and indeed in practice mostly support some public financing of private goods, though usually not public delivery.
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I think the newspoll survey was only of people who would have to pay the levy.
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Rob – Good point – but the sampling differences would presumably have led to support being under-stated, making the gap between Newspoll and Essential even larger.
Incidentally, I think the omission of flood and cyclone areas was because of the difficulty of polling there in current circumstances rather than a plan to poll only those who might have to pay.
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SOR – GST is levied by the Feds, but not counted as Fed tax income as it is given 100% to the states. Yes, it replaced a great many taxes, and I totally agree its complete trickery and should be counted in federal stats. But alas, Costello wanted to show he was a low taxing treasurer – so he made up a story that as the GST was totally given to the states, the Fed were merely helping to raise the tax revenue and that it really belongs to the States….hence, not counted for Fed tax revenue…and no, certainly did not work in the tax section of the tsy.,…that area is for muppets.
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Cheers also Andy for the tip on tax freedom day. I take your point it’s fallen in the last year or so. Pretty interesting though that the main thrust of that link was the undeniable trend since the 60s that tax freedom day has been on continual retreat (save for a oscilliation or two).
I think you guys should also do a ‘income tax freedom day’ – measuring how long it would take a regular bloke to read through the income tax act….I don’t know if its possible to do within a year anymore!
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Baz – Costello tried that, but the ABS never accepted it and the Treasury figures S of R linked to above include GST.
And he’s also right that the tax take is reasonably stable as a % of GDP – it has fluctuated around 35% since the early 1980s, with artificial downward blips such as those recently caused by deficit spending, which we will pay for later.
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Baz, the first thing Lindsay Tanner did when he became finance minister was end Costello’s farce and have GST counted as a federal tax in the budget papers.
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“measuring how long it would take a regular bloke to read through the income tax act”
.
LOL. Even the normal tax pack is bad enough, although speaking of Costello, I seem to remember (possibly incorrectly) that it was him that suggested Australians like this and the deductions system when it was suggested that we get rid of them all and just have a lower tax rate.
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Ok – I’ll take your word for it….GST is now in and taxes are flat. Credit where’s it due, shows I’ve been out fo the game for a while…..now to tuck into that hat!
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Tax freedom day isn’t the full story. If we had a 100% tax rate on income over $50,000 it would probably deliver an earlier tax freedom day but it would not be a tax cut.
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