In Australia half of all families get more money from the state than they contribute:
The exclusive modelling for News Corp Australia by the National Centre for Social and Economic Modelling at the University of Canberra reveals 48 per cent of Australia’s 12.2 million “income units” pay no net tax. Any tax they do contribute is more than offset by the welfare — pensions, family tax benefits or childcare rebates — they receive.
The fiscal churn is large. How many people are paid to spend all their productive hours just managing a circle of money?
On average, Australian families will pay $12,935 in income tax this year, but receive $9,515 in benefits — leaving a net yearly contribution to the public purse of just $3424.
In the USA 86 million private sector workers support 148 million benefit takers.
There are also 16 million government workers (not counted in the 86 million tally) — some of whom are most definitely serving the public. On the other hand, some of the private sector workers are doing contracts for the government, and are effectively government paid workers. I wouldn’t want to quibble about the exact numbers. What matters is that we are at the point where half the voters are surely (and quite rationally) focused on voting for benefits. How does a democracy thrive?
I posted these quotes in mid-2011 in The Slow Death of Democracy, time to quote them again:
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”
Possibly, Alexander Tytler (circa late 1700′s)
….
“Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.”
Henning Webb Prentis, Jr., President of the Armstrong Cork Company 1943
When do we start the mature conversation about this weakness of democracy?
Here’s some fun questions to take into the weekend. When do we teach this in school? There is no longer any shame at all in living off the productivity of other people. It’s time to bring that back. But how do we reestablish pride in standing on our two feet, without demonizing people who do genuinely need support? We don’t even have the right word to capture those people and businesses who are independent, self sufficient producers in our language, yet the concept is so important. We need a word (or several) that rewards the net-tax-paying individual… suggestions welcome (we may have to invent a word). Does any language have a word for this?
Look at how few words are on offer in Thesaurus.com
Self-sufficient: able to take care of oneself; competent, confident, efficient, self-supporting. (also self reliant, and self contained or autonomous, from the entry on “independent”)
None of these is a badge-of-honor type word. The only truly free man is the one who is not dependent. To change the national conversation and raise that attribute to a high ideal we need a word for it. We may have to invent one.
Ian Angell, author of “The New Barbarian Manifesto”, Professor of Economics at London School of Economics had a suggestion.
200 years ago, Americans tipped tea into Boston Harbour, because they demanded that there be no taxation without representation.
The new catchcall which will save Democracy shall be:-
“No representation without taxation”.
You can’t have one without the other – anything else leads to disaster.
http://books.google.com.au/books/about/The_New_Barbarian_Manifesto.html?id=HzhAOqWOenwC
320
The even deeper principle is to do with leadership.
Legitimate leaders lead because they are granted the respect of those they represent.
Politicians become leaders by the default of elections delivering the least worst option.
It is hard to respect politicians as leaders when they grant themselves pensions and condtions available to none of those they lead/govern.
Before attacking the pensions of those who have worked and can no longer do so ‘our’politicians need to accept the same pensions and retirement benifits they have legislated for the rest of us.
Unless they do this, our political leaders should not be surprised if the community considers them as other than legitimate.
210
Hear hear!!!
30
Eric
True, but there are two issues. Firstly, those who are not taxed (currently) would be loath to give away their power – witness Maggie Thatcher’s Poll Tax. Secondly, even if it were to be carried, this sort of system would make the poor extremely vulnerable – effectively second class citizens.
There needs to be something better but I can’t think of one.
Cheers,
Speedy
81
The poor are poor because they do not produce anything of much value for anyone including themselves. The so called need of the poor does not produce anything. Yet, to expect to consume presumes someone somewhere must have produced that which is expected to be consumed.
Why then should those of us who can, do, and will produce the values be expected to accept an undeniable claim on our lives by those who do not? Are we to expected to have no rights to what we produce BECAUSE we produced it while they have a right to it BECAUSE they did not? Where is the justice in that?
I say let the “poor” either learn how to be valuable to others and themselves or suck rocks. That is if they can find rocks not owned by those who were supposed to produce all the wealth the so called poor were to be given. Their ONLY moral alternative is to rely on the VOLUNTARY charity of others.
If you want to give of YOUR wealth to them, for whatever reason, do it and go in peace. However, if you expect to demand that the government take MY wealth from me by force and give it to them, expect me to be not very cooperative. I and others like me just might say “Go to HELL!” and stop producing. What then will the oh so sacred *poor* have to consume or for the government to take for that matter?
You have a right to live but you don’t have a right to a livelihood to be provided by another except by his voluntary choice.
120
The poor “don’t produce anything of much value”? Now there’s the kind of generalization that lead to the busy guillotine in 18th century France. It is not just ignorant, but remarkably ignorant. It reveals that Lionel must live with his eyes closed. Is the work a law officer does “of value”? What about teachers? In the US there are communities where deputy sheriffs are often on welfare and working two jobs. In many grammar schools many “materials” are not provided by the school but supplied by the teacher who then has to wait a year to recover the cost from takes without any interest paid by the community whose young hooligans are to be educated.
Do the folks that stand behind the counter eight hours a day serving food to customers produce a valuable service? Your argument implies that whatever you do is “of value” and that you must be paid commensurately, but that the vast majority of the poor – most of whom do work, who generally have at least one job and often more than one, aren’t doing anything “valuable.” The argument is akin to Marie Antoinette saying, “let them eat porridge [it wasn’t ‘cake’].” You claim a right not only to value your work but that of others as well, without negotiation. The failure here is the assumption through social status of a top-down assignment of value to labour is legitimate and somehow meaningful. Welfare, public medical care and other social aids are a means of making up a shortfall between how a “customer” values a service, and what the service really needs to be valued at before the servitor can afford to continue to provide the service.
As far as a right to a livelihood, consider the actions of the US Federal Reserve in the late ’90s when, guided by a fear of inflation as businesses competed for workers, the Fed decided that employment was “too high.” The Fed apparently thinks that there should at least some starving folks anxious to get off the dole. Somehow that is better than businesses anxious to hire help competing with each other by offering higher wages and salaries. The short of that is that in the upper echelons of government there are folks who think the poor are necessary to protect the value of money.
04
first para. “… from takes…” should be “…from taxes…”
00
Again I say, the poor are poor BECAUSE they produce little of value to themselves or others. If they did, they could trade it with others for the things they need and both parties could become less poor. By their own efforts they can eliminate their poverty.
Yet you project that just because they DIDN’T produce anything of value for me by MY judgement, that what I value must be taken from me and given to them. In other words, I have no right to MY LIFE simply because I expend the mental and physical effort to produce the values necessary to sustain MY LIFE. While those who do not expend the necessary mental and physical effort to do that, have the right to what I have produced.
As I asked above, “Where is the justice in that?”
30
The poor do produce something – “human capital”, or children.
Reverend Thomas Malthus, controversially, put it like this:
“A man who is born into a world already possessed, if he cannot get subsistence from his parents on whom he has a just demand, and if the society do not want his labour, he as no claim of right to the smallest portion of food, and, in fact, has no business to be where he is.
At Nature’s mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he do not work on the compassion of some of her guests.”
An Essay on the Principle of Population; A View of its Past and Present Effects on Human Happiness; with an Enquiry into our Prospects respecting the Future Removal or Mitigation of the Evils which it Occasions. (Second edition, 1803)
The poor are humankind’s shadow. Without compassion for those less fortunate,they – who outnumber the rich and well-off – will one day rise up against them, and there will be revolution; as happened in France in the 1790s, Russia in the early 1900s, China in 20th century, etc, and (potentially) elsewhere today – from Nigeria to Thailand (rural poor/Bangkok elite).
10
You point out uprisings in situations with despotic governments who did not and do not respect individual rights. All property is subject to confiscation at the whim of government. The few take from the many and the many are poor, in prison, or dead. Such situations collapse BECAUSE production is made impossible. Poverty and death is the only possible outcome.
How about a situation in which respect for individual rights is the foundation of the government? That property rights are held inviolate? That each can produce and trade the products of his effort with others in a division of labor system called free market? That system is called Capitalism. It works, and is ultimately the only thing that does work.
10
One reason why I hate middleclass welfare being considered bad. As far as I am concerened anything given away by the gov. should not be means tested but taxed. We have a whole load of busybodies deciding if we really need something but as with free libraries, parks etc we all share. I also think the real masterstoke of Whitlam was to stop us using “dole bludger” to describe people who couldnt get work and not think we just had unskilled labour paid too much. Also everytime I hear some “Economist” say trickle down does not work, I wonder what happened to their eyes. People live now as kings and queens hoped to in the past, warm or cool, well fed etc. We all have things they could not dream of having or doing.
00
<em>“No representation without taxation”.
Well, like death there’s no avoiding tax; every last one of us.
Shall I list the ways?
Goods and Services tax (GST), stamp duty, customs duty, the luxury car tax (LCT), wine equalisation tax (WET) + on beer, fuel excise and other excise duties, land taxes; payroll taxes; Fringe Benefits tax (FBT); and so on.
The Henry Tax Review found Australians pay “at least” 125 taxes each year.
Of these, 99 are levied by the Federal Government, 25 by the states/territories and one by local government authorities.
So, for mine, I’ll stick with universal adult suffrage. And just continue to rage as I suffer.
41
I have no issue with paying taxes so long as they are used to supply infrastructure and generally support productive society.
There is way too much tax spent of supporting unproductive society. That is the major problem.
110
Yes you are right if the study is only about income tax then it is disappointing. A accounting of the total tax a household contributes is needed.
20
“200 years ago, Americans tipped tea into Boston Harbour, because they demanded that there be no taxation without representation.”
Their timing was rather cute, though: they waited until Great Britain had spent far more seeing off a French threat to the colony than it would ever have recouped in taxes.
40
Some years ago I read an interesting paper by an American historian who promoted the theory that the American Revolution/War of Independence was really an English Civil War similar to that between Parliament and the King in the 1600’s – just fought outside of Britain.
I shall try and find a reference to it in my files.
20
Simon Schama makes an interesting case that independence was motivated partly by the colony’s wish to retain its slaves, because it could see Abolition looming in Britain. Certainly it took another war to achieve what Britain had done spontaneously a generation before. And Jefferson had the temerity to pen the lines “We hold these truths to be self-evident, that all men are… endowed… with certain unalienable Rights, that among these are… Liberty” while himself owning slaves. The land of the free…
50
Jefferson was far too complicated to summarize in any simple fashion. It is clear for instance that he truly did dislike the idea of slavery. At the same time, he romantically idealized agrarian life. He could not possibly operate his farms without slaves and so when confronted by two conflicting ideals, let one, “antislavery,” suffer in favor of the other. The fact is that in terms of life style, he knew no other and apparently could not conceive how to deal with one. He was very reclusive and while he wrote a number of profoundly important documents, he never gave even one public speech that is considered important.
The fragments of historical information recounted by a small number of his former slaves is revealing. Household slaves and groundsmen at least were apparently not badly treated, or at least not so much so as to inspire escape. One of his coachmen recalled a conversation overheard between Jefferson and Madison(?) discussing the “slavery problem.” The two laid out a strategic approach they thought a slave could take where the slave learned to read and write, forged manumission documents and then slipped away.
After Jefferson’s death that coachman, who had indeed learned to read and write, found himself sold by Jefferson’s family, but apparently not into an onerous situation. He set about manufacturing forged manumission papers for other slaves who were in more difficult circumstances and did this for years, remaining a slave himself until the Civil War I believe.
The institution of slavery has important linkages to concerns within American democracy between rural and urban voters. Prior to the Civil War slave owners in the south voted their slaves as fractional proxies. In effect, owning slaves gave the owner more than one vote. This permitted landed aristocracy to offset the individual votes of small landowners and city dwellers, and the bigger the plantation and the larger the slave holdings the large the vote offset was.
00
“It is clear for instance that he [Jefferson] truly did dislike the idea of slavery. At the same time, he romantically idealized agrarian life. He could not possibly operate his farms without slaves and so when confronted by two conflicting ideals, let one, “antislavery,” suffer in favor of the other.”
You write as if he were making a disinterested choice between two opposing ideals. That is nonsense. He liked his slave-subsidised lifestyle too much to be prepared to give it up. That’s hypocrisy, just like his penning of the “self-evident” sentence in the Declaration of Independence. If you think he is “far too complicated to summarize in any simple fashion” then just watch me. He treated his slaves well? So that’s OK then. In fact he liked them so much that he took one, Sally Hemings, as a longterm mistress, by whom he had many children. (Put the modern DNA evidence together with contemporary allegations and with Jefferson’s will.)
01
I see.
If someone makes just one mistake, he can never ever say or do anything right again. Then if he makes a few more mistakes, he should be erased from history and pilloried for being evil.
If a true statement is made by the most evil of men, it is still true. This is because the truth is in reality and not in the man.
Jefferson’s statement of truth was one of the US foundation documents (The Declaration of Independence) as well as his fight for the rights of man to be protected by limited government. Are these truths to be ignored because of the mistakes he made? I think not.
10
Lionel,
You respond to my critique of Jefferson, “If someone makes just one mistake, he can never ever say or do anything right again. Then if he makes a few more mistakes, he should be erased from history and pilloried for being evil.”
If a mathematician makes a mistake in his work while having a hypocritical moral life then it is just that – a mistake. But if somebody decides to trumpet the merits of freedom while keeping slaves then to call it a mistake is a category error – it is failure to practice what you preach, which matches the dictionary definition of hypocrisy. I did not state and do not believe that Jefferson should be erased from history; I suggest that a re-assessment is appropriate. Neither did I pillory him for being evil: I stated relevant facts. Readers are free to form their own conclusions.
01
Does his “hypocrisy” diminished the truths he advocated?
If it doesn’t, why emphasize his behavior that is well known and was common in his era?
The fact remains that the truths he identified ultimately eliminated slavery in this country. They made it impossible to ignore the contradiction within our nation’s foundation. Yet you focus on trying to destroy the man.
What is your point if it isn’t to diminish those truths?
10
Why do you think it is “hypocrisy” rather than hypocrisy to own slaves while saying it is self-evident that liberty is a human right?
My point is simply to call for a re-evaluation of Jefferson. I suggest that you stop trying to defend the indefensible.
01
I am defending the truths he held while you are ignoring them as irrelevant compared to the fact he inherited slaves. You totally drop the context of the times and his struggle with that context.
He did consider freeing them but in the times he lived, that would have caused more harm to the slaves than simply treating them benevolently. When you are walking between the devil and the deep sea, you must walk very carefully.
Taking action without taking the context and consequences in consideration will have many unintended results. I suspect had he freed the slaves and the result turned out to be bad for the slaves, you would also demand that his stature as a founding father be denied.
It takes time to accomplish a cultural and political revolution. That like most difficult things can be done only one step at a time. He took some very important steps in the right direction.
The fact is that he promoted, fought for, and sustained a profound idea that was beyond its times. For that, I honor him. He accomplished far more in a few years than you will likely accomplish in your lifetime. Perhaps that is why you are attacking him so unjustly.
10
“He [Jefferson] did consider freeing them but in the times he lived, that would have caused more harm to the slaves than simply treating them benevolently”
I’d be interested in evidence that he seriously considered freeing his slaves.
“It takes time to accomplish a cultural and political revolution. That like most difficult things can be done only one step at a time. He took some very important steps in the right direction.”
If he found slavery repugnant then he could have campaigned against it, like many did in Britain. He could have told his slaves that they were henceforth free and started paying them a salary and taken a pay cut himself. But he didn’t, did he?
“I suspect had he freed the slaves and the result turned out to be bad for the slaves, you would also demand that his stature as a founding father be denied.”
I have no idea – too counterfactual for me. Suspect what you like.
He accomplished far more in a few years than you will likely accomplish in your lifetime. Perhaps that is why you are attacking him so unjustly.
Conjecturing my motivation is merely an attempt to change the subject. Anybody who owns slaves and says that liberty is self-evidently a human right is a hypocrite. “We hold these truths to be self-evident, that all men are… endowed… with certain unalienable Rights, that among these are… Liberty, provided that they are white.”
00
“If he found slavery repugnant then he could have campaigned against it, like many did in Britain.”
How ironic, he did find slavery repugnant and did campaign against it by helping to establish the nation that eventually banished it. However, the primary fight was with Britain who wanted to turn the colonists into indentured servants without rights or property. It was the British who started the institution of slavery in the new world and worked to enslave all the colonists regardless of color. That is why we kicked them out.
Stop looking at only part of the picture and put the issue into full historical context. Jefferson did you, me, the British, and the world a huge favor by helping to found the US upon the concept of individual rights and the concept the government was servant rather than master.
Now who is trying to change the subject.
00
Lionell,
Please see previous posts under my name above about how a major motivation for the colony’s declaration of independence was likely the wish to retain slavery in the teeth of a rising abolitionist movement in Britain (the case is made by Simon Schama, who is a serious historian, in his book Rough Crossings); and how the declaration was timed soon after the Brits had finished protected the colonists from a French threat against which they would have been helpless by themselves. (This was done, incidentally, at a cost greatly exceeding any possible tax revenues from the colony, a situation which elicited a tart comment from Adam Smith toward the end of a later edition of Wealth Of Nations, although it seldom appears in modern US abridgements.)
As for Jefferson, I regard it as reductio ad absurdum to claim that somebody who owned slaves was a beacon for liberty. Not everybody sees the absurdity, of course.
It would, I accept, have been asking a lot for somebody with Jefferson’s background to tell his slaves that they were in principle free and begin paying them subsistence wages at the expense of his own lifestyle. But given that he was not going to do that, the man had some effrontery to begin pontificating about liberty as a human right. As for the origin of the doctrine of political freedom, it was greatly spurred in practice by the division of power between crown and parliament in England, and in principle by the writings of the French philosophes. The American revolutionaries picked up on both of those; Jefferson was hardly writing in a vacuum.
00
“How ironic, he did find slavery repugnant and did campaign against it by helping to establish the nation that eventually banished it.”
Jefferson helped to establish Great Britain?? (Britain abolished slavery throughout almost all of its Empire in 1833, by which time it was conducting blockades of the African coast to prevent other nations running a slave trade, and abolished it in the remaining few places in its Empire in 1843. The USA, in contrast, abolished it more than two decades later.) Do get your facts straight.
00
The way to achieve this is to remove the privilege of voting for people who receive more than 25% of their income from the government.
Easily implemented .. The tax department provides the electoral office with a list of tax-payers who are eligible to vote and everyone must show proof of identify when voting.
00
??? So nurses, policemen, teachers, politicians, public service of any sort? etc.. would not be eligible vote ?
Sorry, but these people provide very important services for the whole community and should be allowed to vote.
Pensioners may have spent all their lives trying to make a worthwhile contribution, they have done their bit, so why should they not be allowed to have a vote?
If you want to say those receiving government money without returning anything to society, then you might have a point.
12
There is no solution to this problem in democracy. A rational person will vote to increase their income from the government and to decrease their taxation burden. Property rights were invented to put a limit on what a society may steal in support of itself. Democracy, by definition, professes to no such limits. All rights in a democracy derive from the collective will of the voters. Because of this, government has no restraint and can confiscate whatever it wants, and the voters want it all, see the demonisation of high income earners.
Sortition of the limited roles of government along with unassailable property rights to prevent the government and others from infringing those rights would be a possible solution. Getting government out of social services would be a good first start.
However, all this is moot. No representational form of government would vote for sortition to replace it. At some date those providing funding will rise up against those stealing from them.
291
So the rich should crush the poor and downtrodden, what a great place to live that would be. We could call it America then I suppose.
030
Or would you rather the poor and downtrodden crush those providing their means.
If the government does not respect property rights of others, why should others respect them?
I made no assertions as to the rightness or wrongness of the action, I merely noted a possible outcome. Your response is typical of todays discussion. No logical discussion of what might be a better system of government to replace the failure of democracy, but an attempt to paint a reasonable statement with emotive claptrap.
290
Well Joe, put forward a better system of government to replace the so called failure of democracy.
I’m all eyes.
615
I think he has in mind a system where his point of view is forced on these stupid enough to disagree. Funny how when the masses vote and a decision is reached, its a failure of democracy for those that disagree. The only alternative to democracy is autocracy.
014
I already have; Google sortition to alleviate your appalling lack of comprehension.
What proposal do you have to put forward, besides your demonstrated ignorance of just about everything!
151
Joe, you wrote: “At some date those providing funding will rise up against those stealing from them.” I think it is more likely that those who are in receipt will rise up demanding more, and kill the goose that lays the golden eggs.
90
The solution, which we missed, was in the separation of powers.
The legislative branch of the Government should have no power to tax, they can only share out revenue they receive among their legislative purposes.
Government revenue should be determined by completely separate elected branch of the Government, which can only implement their pre-election commitments to raise, hold or lower taxes.
Voters love to vote themselves free stuff, but they hate to vote to pay out. There are still practical aspects to be implemented, emergencies, wars, equity, etc. but that’s the basic principle.
I acknowledge there is a role for credit in economies that might better be implemented by the State than private parties alone, but I don’t know enough economics to amend my proposal appropriately- I’m open to the views of others.
The next thing we need is to outlaw political parties as criminal conspiracies. We should create the criminal offence of ‘associating with a known politician’ to apply only to politicians. The points being that the individuals who are selected by party preselection end up representing the party not their electorates. The poor old voter ends up with a choice between complete party platforms rather than the ability to pick and choose what comes closest to their judgement.
Finally, we need economic education in schools. There’s still many like my friend who will say “The taxpayer doesn’t pay for it. …The Government does. … They’ve got this mint in Canberra.”
Now he votes.
30
A 20 something asked me yesterday why cant the government print more money if they need more and leave us alone! I was spechless, it took about an hour of lining up peanuts on the table to explain the role of money, governments and taxpayers in the world. Absolutely no idea! I had to explain it like I was teaching at a primary school, the three concept had never been raised or explained!
90
Clueless on where money comes from – or rather where the Value of money comes from.
But you can bet your socks that that 20-somthing little person knew all about global warming and the other politically correct orthodoxies…
80
To get the idea across, I find it useful to offer to pay them in Monopoly money.
Sadly, some of them still don’t get it.
Multi-millionaire Corporate Fat-Cat hypocrite David Suzuki seems to have done very well for himself given his utter incomprehension of economics or logic. He ascribes all the ills of the earth to us (not him) having too much ‘stuff’. And then points out that the key to reducing population, which he views as desirable, is to give women an income. He seems oblivious to the point that the purpose of an income is so we can get ‘stuff’. Presumably he wants to pay women in Monopoly money.
10
“the key to reducing population”
Him and his 5 or so offspring and probably grandkids… go first. !!
11
High earners may be demonised, but the gap between rich and poor has been increasing for years, certainly in the UK, also in the USA. So said demonisation has not been very effective. It can also be shown that too high a concentration of wealth in too few hands will result in an enormous financial crash and depression leading to the downfall of society and democracy. Currently the trend of wealth concentration combined with a steadily worsening balance of payments poses a long term threat to the stability of society like non yet seen since the birth of democracy. A wealth tax looks like a workable solution.
A superb essaay on the subject by Chiefio here;
http://chiefio.wordpress.com/2012/11/09/redistributing-an-immodest-suggestion/
22
The idea that the gap between the richest and the poorest in the society is important is meaningless unless you are an advocate of the politics of envy. If everybody today is better of than they were 2 decades ago then it does not matter if some are better of to a larger degree. This is just the way the world works. Some people are better at accumulating wealth than others. Instead of taking after them with torches and pitchforks it would be better to devote a little bit more general education into the wealth creation process.
Envy is the most destructive of human emotions and is extremely dangerous to be stirring up. This is one of the ultimate failures of socialism.
71
Any study like this should assess how much past income/expenditure was generated by income units. Perhaps this has been done.
I reckon that any pension coming my way is balanced by at least two orders of magnitude greater original wealth creation for which I can claim my part. Then there were those years in the 1980s when my personal tax was 50 to 100 thousand $ per annum. Quite a lot in dollars of today.
280
Sorry Geoff, but gratitude has a very short half life. Your contribution has long since been squandered by politicians.
361
Mostly on Luddite work practices.
110
Ted
You know the difference between a “Luddite” and a “Progressive”?
About 300 years.
Cheers,
Speedy
30
“About 300 years.”……….backwards. 🙂
00
Gratitude has the shortest half-life of all human emotions, measured in a few milli-seconds
I agree with Geoff Sherrington, though
When one reaches the 70’s, energy and opportunity are increasingly in short supply for almost everyone. If one has scrimped, saved, worked furiously, brought up children who are well adjusted and generally contributed much to production, the expectation is that for the remaining decade to 15 years of progressively failing health, the Treasury should in turn contribute to reasonable living
In fact, we see the opposite. Such people are characterised, particularly by journos, as “asset rich” and so should be stripped of these assets to pay for their upkeep. So, those who were persistently spendthrift, lazy and careless throughout life finish with no assets, have lived perhaps in riotous fun at times and are now kept by the State as a reward
Which path would one now advise children and young people to follow ? Remember that the “rules” are changed constantly and unpredictably
[I do expect that any lefty replies to this will misquote, misconstrue and cherry pick. Such is the nature of a public website]
400
I’m not a lefty. However the fact is that the post war generation had an incredibly easy path to wealth. Families paid negligible taxes and bought cheap houses at record low interest rates. They paid no capital gains on shares until 1985. House prices have boomed creating a vast amount of unearned tax-free capital gains. They also had a once in a lifetime stockmarket boom.
I have a number of friends in their 70s who are asset rich. Only a couple of them actually made their money by genuine hard work and making sacrifices. The rest of them got wealthy because of inheritances, tax free capital gains on their houses or booming share prices.
531
Hey Bender – you obviously weren’t around when interest rates hit 17% to 18% in the 80s. And well over 10% in the early 70s. You reckon that wasn’t a tough slog? Record low interest rates indeed! We took the good with the bad mate.
320
18% intrest on a home costing 3 times median income is less than 7% interest on a home worth 9 times median income (effectively 21%) and thats before you include three times the principle repayments.
High inflation wage inflation also made things a lot easier.
29
“High inflation wage inflation also made things a lot easier.”
Except for the wealthy. It makes them closer to the poor, which apparently they think is not a good thing. One of the ironies of such discussions is that when you consider who is opposed to social spending and who is not, the vast number of opponents who conceive of themselves as doing productive work are, in terms of absolute wealth, far, far closer to the poor than they are to the one-percent of the truly wealthy. They are comfortable, and conceive of those taxes as a threat to their comfort, and those taxes are. The truly wealthy can afford to be “generous” since they have far more than they can possibly use. They can easily afford to support taxes that that keep the hoi poloi away by keeping them poor. The truly wealthy support “left” issues not because of any sympathy but because it limits competition for wealth.
10
I was around then. Wages were booming and houses were dirt cheap (2-3x average annual wages).
REAL interest rates were never 17-18% because inflation was running at about 12%. This meant that the EFFECTIVE interest rate was only around 5%.
211
Dad often painted the house, sometimes helped build it. It was a box compared to today and there was not the appliances etc we are familiar with tody. Unsewered, unpaved ..need I say more.
00
Bananabender,
You cannot compare interest rates to inflation to get an effective interest rate for the consumer. You need to compare interest rates to income growth rates. It does not help you with an interest rate of 17% if the inflation rate is 12% but your income growth is only 5%.
10
Bender… you must also take into account that houses recent generations ‘can’t afford to buy’ are usually 4 bedroom two bathroom brick with a double lock up garage… whilst the first house I bought in about 1990 was two bedroom weatherboard with about half a bathroom … and we parked the car in the driveway… paid up tob17% interest on it, renovated it… and sold it for a loss about 5 years later. Didn’t buy another until about the year 2000…. and it was a two bedroom 1 bathroom apartment… and it did well for me.
They NEVER look cheap.
290
If I get something good out of government policy or accident of economics I’ll take it. But I don’t expect what they do to supposedly “help” me to be any kind of long term help. It’s usually just another problem. Obama’s great Affordable Care Act (affectionately known as Obamacare :evil:) has already cost me thousands of dollars — literally — and along with all his other policies will cost me even more in the future.
And a whole lot of people found no road to riches in the postwar boom. And a lot were able to prosper during the high interest rates in the 70s and 80s.
My point is that you take advantage of anything advantageous, whatever it may be. And you also take it on the chin when things aren’t so good for you. But instead of complaining you make the best you can out of it, learn from it and go on.
Both good and bad luck happens to everyone. The most successful people, whatever the times may be are those who were prepared to take advantage of their good luck and were looking for it so they recognized it when it came along. And they were equally prepared to minimize the impact of their bad luck. This by the way is even true for the dishonest among us who cheat and steal. They win and lose too just like the rest of us.
170
Most of my relatives are in the building industry. The land price represents about 70-80% of the cost of housing. It makes bugger all (10-20%) difference to the overall cost whether you build a cottage or a McMansion.
56
What came first, the chicken or the egg.
McMansion = increase general land price in a given area.
Put up a heap of weatherboard humpies = cheap land.
00
Hi BB, I’m a baby boomer and can absolutely guarantee no easy path to wealth and today’s house prices are more affordable per years of average wage earnings than ever.
Negligible taxes? Base tax rate was 32 cents in the dollar rising to close to 48 cents so much higher than today.
No capital gains on shares – no one could not afford to squander hard earned coin gambling on shares (reference Poseidon Shares) because most of us got married in late teens and early twenties and had single income with wife, children, car loan and mortgage to pay off as quick as possible.
And the once on a lifetime stock market boom – I’ve seen three and they are always followed by a crash so I’ve also seen the life savings of many retirees wiped out completely.
If there wasn’t capital gains on shares there was certainly a death duty so that meant a hefty tax on all inheritance.
Phil nailed it with the double digit interest rates of the 80’s and some rates such as the NSW Gov Home Fund increased to 27%, now that was high however prior to these rises the average mortgage rate was set by the savings banks as opposed to the trading banks and nominal rate was always about 11.5% anyway.
Once it was all about setting up for the future because there was no superannuation other than in government jobs so the majority of us had to make hay while the sun shined. But we did have permanent employment with longevity.
Today is all about lifestyle, binging, hooking up, having fun because the employment is mostly casual and there is no prospect of longevity. Attitudes change as job security decreases. Just like in war time.
Couple of rules with real estate that I have passed onto to my children:
The buy of the century comes along every week.
What’s dear today is cheap tomorrow.
Work hard and save hard for the things you want.
Never borrow to buy motor vehicles.
280
I seem the remember at one stage the top tax rate was 61cents in the dollar and share gains were taxed as personal income. Further such share gains required a provisional tax submission to the tax office. It was assumed that the next quarter you’d achieve the same income on shares so you had to remit the tax to the tax office. That was so onerous that one usually put in a provisional tax variation but it meant one could not trade that following quarter . It was after this mess that the government brought in capital gains tax. Also BB my first wage was $41 per week gross. Houses were way out of my league. I could not afford one until I was about 30. I was brought up in a 3 bedroom weatherboard house. I have 3 sisters. We never had any money. I had no shoes for cross country at school. I ran in bare feet. I studied and have 3 degrees. I’m self made. What you have written shows you know zero about the post war years and baby boomers.
190
I have always wondered who these baby boomers that had such a good life were. I am classified as a baby boomer but I certainly don’t fit the media description. As a child it was bare feet and second hand clothes. Budget meals. 8 kids in a 4 bedroom house (half built/renovated most of my childhood) No money for anything except the necessities. My father worked hard (even after an injury permanently affected his leg). We knew we were poor but we never felt that was a bad thing. Study beyond junior was not even an option, but I did acquire a degree later as an adult. My first house was a workers cottage (2 bedrooms, lounge, kitchen and bathroom) which over time I doubled in size, working almost every weekend for 6 years. So who are these baby boomers who have had such a cushy life.
250
I’m 51. My sibings are in their late 50s to mid 60s. I am fully aware of the post war years.
It is fact that houses were only 3x average earnings until the 1980s. They are now coswer to 9x average earings.
It is fact that families were paid more in government benefits than they paid in tax until the mid 1970s.
It is a fact that university education was FREE from 1972 until 1988.
210
“It is a fact that university education was FREE from 1972 until 1988”
Not for me. I started uni in 1973. Paid for it myself. I have never had a government hand out.
“It is fact that families were paid more in government benefits than they paid in tax until the mid 1970s.”
This is a complete rubbish statement. Straight out of your backside.
50
This thread has a familiar ring to it:
http://m.youtube.com/watch?v=Xe1a1wHxTyo
00
I too wonder about the boomers having a great life. I married at 18 to a husband 4 years older. Housing was a minimum of 5 times annual income for an old, old wooden draughty box and 8-10 times income for a modest 1000 square foot (100 sq m) wooden home without floor coverings. I have no idea where this 3 x income housing was – never where I lived.
University education, while called free, cost me about $350 a year when the average income was $1000, so a third of an average wage – so about the same as now.
We had children young and lived on one wage, in a draughty old wooden house, sitting with blankets around us huddled around a wood fire in winter – wood we collected ourselves. I used to ration ammunition so my husband would be able to go shoot another rabbit for dinner and not attempt to shoot birds we couldn’t eat.
The argument that interest rates of 18% when inflation was high so interest was only 5% is nonsensical. We had to pay 18%, not 5%. And when we sold that house we had to buy another at the inflated prices so there was no benefit at all. Interest to all practical and budgetry purposes was 18%.
Don’t tell me we had it easy, though I readily admit others had it much harder. But we didn’t have carpets, we didn’t have warm houses, we didn’t have bought clothes, we didn’t have colour TVs or fancy music systems and often not TV at all if the old one broke down. We didn’t have regular alcohol, or chocolates, or, in our early married life, desserts at all.
So while some may have had an easy life I’m not sure who as those I grew up with had a life very similar to mine.
10
Bender, Retired:
The 3 x figure is about correct for my first house and my salary at the time … but note it was a two bedroom weatherboard cottage in a country town with about half a bathroom … and we parked the car in the driveway… AND paid up to 17% interest at one stage…
00
In the 1970s in the UK many did become quite well off through a few years of sacrifices. Although nominal interest rates were high, real interest rates were low. For the peaks of inflation (such as >25% in 1975) real interest rates were negative. If you could endure a crippling mortgage for a couple of years, a repayment mortgage would quickly fall as a proportion of net income. By the mid-1980s many had mortgages that were tiny relative to real income. Alternatively, by trading up every 5-7 years people could trade upwards, as inflation gave them equity in their properties. This aspect of inflation on house prices has never been properly understood.
90
Of course we had it easy BB.
I’m a B4, born just before the war, & boy did we have it easy. I was lucky dad came back, & was demobbed with a cheap new suit, & 26 pounds. At 37 that was it. A wife a kid, one suit & $52.
You know I played football right through school, barefoot like a lot of my mates, & the first of the baby boomers. I finally got boots in the last year of school, second hand of course.
Yes it was so easy, when a Holden cost 1.3 times the average salary, a TV cost 2 months wages, not 2 days, & a suit cost 1&3/4 weeks wages.
I suggest you stand up to think mate, it will take a crushing weight off your brains, hell you might even get some idea.
181
Mate, those houses aren’t investments, they are for living in unless you fancy dossing under the harbour bridge.
60
I don’t get the impression life was that easy in the 1950’s. If someone got rich from share prices over 40 years, then to say it was due to “booming” shares implies a degree of fortune that’s not in evidence. They have simply saved enough that, with long-term expected returns, they got rich. There might be someone who fluked $100 into Westfield or Berkshire – not many.
Likewise, property. You buy a house, pay it off, and it grows at roughly AWE over time. Making rational decisions to do other than consume 110% of wages is hardly something to sneer at. Even inheritance – it doesn’t come from Mars in a spaceship. It reflects the previous generation doing all those things (plus the beneficiaries not cashing up and buying a Ferrari).
60
I’m no lefty either but I would (and do) advise my son, my only child, to not rely on government but to work to make himself worth as much as possible in our economy, to save and invest for all he’s worth and to do it intelligently because corporate America, both large and small is still the goose that lays our golden egg — and his. He’s now selling insurance after having lost their business in the recent economic downturn. He was doing inside sales, selling advertising for a local newspaper that was badly managed while his wife and her parents developed the business. After the newspaper went almost belly up he learned insurance and is now doing well at it. He has people skills similar to one of his uncles who could have sold ice to Eskimos, very unlike his father who couldn’t sell a hamburger to a starving man with $100 in his pocket. I’m very proud. But also very worried about the future.
It’s not a matter of which will be the easiest life but which will see you reach the end of your life with your self respect intact and feeling good about how you lived.
130
I was the treasurer for a community run low care retirement hostel in a small country town for five years. I saw examples of residents who had lived similar lives on similar wages. One had bought their house, educated their children and forewent holidays. The other always rented and spent every penny on the RSL and having a good time. When it came time to move to the hostel the latter had no assets so did not pay an entry contribution while the former was expected to sell their house and pay. Hardly fair so I would organise for a time payment scheme that gave the hostel their money and left the family with the house. Why shouldn’t they hand on the house they had worked for all their lives? Equally, why should the profligate be rewarded while the savers be punished.
Rather than seek a new description for the independent person it might be more appropriate to reward him/her. In similar fashion we see judges continually ignore the innocent victim but be supportive of the perpetrator because of some real or imagined or self- inflicted hardship. Maybe the victim suffered similar hardship but overcame it.
190
.
That’s the point Lawrie, in order to reward them (we need to shift our economic, social and cultural mindset). But we think and share through our language.
The conversation is cumbersome because we have to use long descriptors and qualifiers, and it doesn’t capture the imagination, nor allow us to easily keep the issue “front of mind”. Five year olds don’t grow up wanting to be a “self-sufficient net tax payer”. Superman is not known as a “Kryptonic refugee with exceptional strength”. Football fans don’t chant “Hawthorn Football Club” if they can say “Go Hawks”.
Words are our tools for shaping the debate and thoughts. We need better tools.
131
But why would independent people seek reward or accept such?
To me being independent is the opogee of personal responsibility. You know, that common trait before the social engineers made all the rules to replace common sense?
I suppose the welfare mentality is the reward for having the basic freedoms stripped, one at a time.
60
More years ago then I care to relate a man named David Riesman wrote a book sorting people into two types, viz: inner directed and other directed. It strikes me that self sufficient people are inner directed while those who importunely follow fads and trends to their financial regret are other directed. Global warming skeptics, for example, are inner directed. Green fascists are other directed. I guess my choice as to which group make better people is obvious.
100
Buzzwords? Do you want to be independent or dependent? Do you want a say in your own income or have the government choose it? Do you want to be a contributor to society or a drain on it?
30
Since words are likely to remain the only tool we have for shaping the debate, what we need are people who are better with the words and the way they put them together to communicate the ideas.
It was called to my attention somewhere that Ronald Reagan never made his adversary an enemy. He of course called the Soviet Union what it was, evil. But when he dealt with people he always treated them respectfully, even while disagreeing with them. In his famous speech in Berlin he said, “Mr. Gorbachev, tear down this wall.” And you know, as far as I remember Reagan he was indeed respectful to everyone.
I’m as guilty as anyone else of violating this paradigm but perhaps it’s something to reevaluate. You do catch more flies with honey than with vinegar.
And then we need to be able to explain the ideas well, in simple terms almost anyone can understand. I think we have the ideas but we need more people with the skill of a Ronald Reagan to communicate them.
21
And one more time the objection isn’t stated. It’s just, “I disapprove of what you said.” End of story.
Can what I’m talking about be any more clearly illustrated than by this red thumb? No chance for debate or discussion. No chance for anything.
10
Roy,
I always see a thumb (of either color) as indicating that I have made somebody think in a slightly different way, than they would normally.
A green thumb means they like the new thought, and have expanded their horizons.
A red thumb means that they are uncomfortable with the implications of the new thought, since it might force a change in their belief system.
Either way, thumbs are good. As Oscar Wilde (I think) said, “The only thing worse that being talked about, is not being talked about”.
10
And if you doubt my point of view, just have a look at the reaction to the comment at #3.2. QED
00
OK, Rereke. That’s one way of looking at it.
And here’s another. I used to give out red thumbs when “I thought” they were required. But then I stopped doing it because I realized that anonymous disapproval, lurking in the darkness to throw a dart at someone, isn’t what I can call civil behavior. It seems little better than an ad hominem attack. The whole point of this blog is debate about the issues. If I disagree with you I can say why I disagree and you have a chance to respond to that. You can do the same if you disagree with me — and you should.
Surely that’s not asking too much. But sadly, it appears to be. And It’s not the disapproval I mind but the anonymous nature of it. It’s destructive of the very dialog we should be having with those who don’t agree with us. Or the other way around if you prefer, dialog with those with whom we don’t agree.
I even stopped giving out green thumbs unless the comment is something really thoughtful, informative or thought provoking and worth recognizing for that quality. It’s not enough anymore to simply say something I can agree with and get a green click.
10
I occasionally speak to a 77 year old pensioner. He complains about the government not providing enough pension.
In fact, he has quite a sense of entitlement about receiving more. I gently suggested he had long ago received much more than he contributed via taxes, and in any case those tax contributions had already been spent on roads, bridges, benefits for others, education, defence etc, etc.
I also suggested that if indeed there was any of his money still surplus Rudd and Gillard had blown it, and then a whole lot more.
At this stage, his mind closes and “the government” should pay him more; I told him the government only has other people’s money and does he want their (including my) money.. Mumble, mumble, etc. Of course, “Labor will better look after him..”. I once told him if Labor started reaching in my pockets on his behalf I’d have to become less friendly towards him and Labor, he he.
But the situation is clear as Eric states, and we have a trained brigade of citizen brigands who can vote for a government that pillages on their behalf (and the members of the government). Tytler was right.
180
A few years back I spent a few days in Wollongong hospital with a 75 year old Greek Australian. He couldn’t stop saying that Australia is the best country in the world to live in,
He said that in Europe after the war you couldn’t get one day’s work a week. He came to Australia and: “Three days later I was on a plane to Cairns cutting cane”. Just about as hard and hot as work gets, but he still remembered the first pay packet.
He said: “They say the pension is not enough to live on. The pension is plenty to live on! I got my house, I got my phone, I got my car, I got three beautiful fridges full of food!”
Fifty three years after leaving famine stricken Europe it was still important for him to have 3 fridges full of food.
So it’s a matter of prudence and perspective. If you own your house you can get by on the pension. If you don’t it might be difficult.
130
It’s become the same in many places in the states. The pension is Social Security and what you get depends on what you were paying in during the last 3 or 4 quarters you worked before you retired, 7.5% of salary or wages, which is matched by the employer. But no matter what it is you better have something else to augment it. And having a high mortgage payment can be a killer. Especially here in Southern California. If I had to buy my house now I don’t think I could qualify for the loan.
00
I can’t talk about your exact circumstances, but the average baby boomer on the verge of retirement has been a net recipient of tax levels, free tuition, mortgage tax offsets, etc their entire lives and now has an expected lifespan well into their 90’s – that’s thirty years of pension to fund. The maths just doesn’t add up.
232
Wrong in every aspect
1) tax levels – highest marginal rate for a long time was 50-51c/$
2) free tuition – I assume you mean Uni fees. I paid them, and did all three of my my degrees part-time (that means holding a 9-5 job and attending Uni at night 4 days/week plus weekends for many years)
3) mortgage tax offsets – I assume you mean negative gearing, because my own mortgage rates were up to 17% for a very long time
4) expected life span well into 90’s – actuarial metrics say a male may reasonably expect to live till the mid-80’s, a female perhaps 2-3 years longer
Your post just drips misplaced and mis-informed envy
440
Ianl8888
Proud of you, brother.
Bananabender
If it means anything, no, none of inheritances etc helped me.
To cut to the chase, the small team we had has contributed 00s of millions to several billion $ of new wealth to this country already, depending on how you calculate it. We knew from the start that much of it would be pised againstt a wall because that has ever been the way. What matters by mid 70s is that you gain great comfort from the knowledge that you have put in far more than you could ever take out. If you are in a position now to seek that outcome, go for it. It is bloody hard work and you will even be reviled for trying it by the ignorant slackers who will end up being the greatest bludgers. They oftern have a recognisable blog style, concerned with telling others what they can or cannot do. Don’t heed them. Crash through for they are flimsy under test – just do it.
300
ianl8888,
With that you have nailed it down exactly the way it is everywhere.
180
I agree. That’s me exactly. I do remember that the top tax rate at one stage was either 61 or 63 cents. I’ll do some Research when I get a chance unless someone already has that info?
90
75% (equivalent to 75 cents in the dollar) was the top personal marginal tax rate in 1951-52.
See Chart 3 here:
http://archive.treasury.gov.au/documents/1156/HTML/docshell.asp?URL=01_Brief_History.asp
00
Bulbous, wrong on every count. Never received any of that free stuff, not even a child endowment. Free tuition at University was for the very few that made it through high school and couldn’t find employment/sarc. Employers paid for tech college but nothing else, not uniforms, not tools of trade, not text books, not laundry, not meal breaks, nothing but bare minimum wage.
The majority found jobs early because we had family commitments early – its the way things were, and as previously stated no superannuation so everyone went out as hard as they could to set up their own retirement.
Just plain old hard work because I can assure you the war generation that bred us had nada, nothing, zip, zero to pass on except maybe a 2 bedroom fibro cottage on a quarter acre block, which was all the rage back then because no one had anything else.
180
Geoff,
The reason you are not appreciated is that you are in a democracy. A candidate supporting lower taxes through lower transfer payments would gain your vote, but at the expense of a number of net beneficiaries of government largess and the state employees. It is only by convincing people that less government is in the long-term interests of all that those with smaller government agendas get elected. That in turn usually on occurs after some real crisis, like resulted in Margaret Thatcher getting elected in 1979.
10
Contributor is to recipient as host is to parasite.
110
[…] Where to for Western Democracy when voters vote themselves the Treasury? […]
30
this is what happens when governments impose bad tax systems. People may not necessarily be able to articulate what seems bad to them, but they realise when they are being `taken.’ Therefore they vote to `relieve the pain.’
But that is only one side of the coin. Every coin has two sides. So too do tax systems. Those who stand to make most out of some aspects of the economy, the idle Rent Seekers, wield undue influence over the tax system, pushing taxes off onto the productive workers, who are mostly the poor. Those in the middle try to ape the Rent Seekers as best they can by clawing back as much tax as possible through hand outs.
It has been further degraded by the Rent Seekers rewriting economics to disguise their actions as detailed by Professor Mason Gaffney of the University of California in an analysis of this influence.
Henry George got it right. George wrote his seminal work Progress and Poverty” in 1875. It’s the only economics best seller in history and is still in print. It’s published on line at the link.
Professor Michael Hudson of the University of Missouri is a trenchant commentator on the on-going plunder of the global economy by the financial industry. They call it Capitalism. It isn’t. It’s fiscal licence and out and out theft. There’s plenty of similar comment st Fred Harrison’s.
If you want a really scary read, try Fred’s last book, “The Traumatised Society.” To move away from the bad systems to that proposed by george requires a lot of economic re-education.
90
AND I forgot GST. What is clawed back in handouts from income tax is re-collected through GST, and then some.
70
The most absurd example of senseless tax churn would have to be the carbon tax.
Not only do many receive compensation for the increased energy costs etc., but the compensation itself cancels out the disincentive to use fossil fuel energy which is the very purpose of the tax in the first place.
230
There was a monster con in the introduction of this tax on CO2 emissions.
The con was that this was a tax on those CO2 emitters, when in actual fact it was an outright tax on the people.
Con Part 2 was when the Labor Government said that the people were being given a refund on what would be the increase in the cost of electricity.
So, let’s look at it then.
ALL CO2 emissions were going to be costed at a price per ton of CO2 emitted.
40% of those emissions come from the generation of electrical power, and all of those costs were then passed down to all consumers.
80% of electrical power consumption involves the emissions of CO2, be that black coal, brown coal, or Natural Gas fired power generation.
However, only 25% of electrical power consumption is consumed in the Residential sector.
Then, in its own magnanimous way, that Labor Government said that as high as 75% of people would be reimbursed for the increase in their electrical power consumption for their home use.
So here’s what was returned to the people.
75% of 25% of 80% of 40% of the total take.
So, in fact, 6% of the total amount raked in from the CO2 tax was actually returned to the people.
On top of that, there was the cost placed on all Natural gas consumption, be that in the homes or every entity that consumed Natural Gas. Then there was the tax placed on all the other Greenhouse gases as shown at this link, from the Australian Legislation, these being the refrigerant gases, and note the multipliers
Every entity subject to the tax passed all those added costs down to the consumers, so in actual fact, the emitter was just the middleman, collecting the money from the consumers, and then passing it onto the Government.
See how much of a cash cow this CO2 Tax actually was.
Tony.
342
Tony,
Spot on.
Add in the compounding markups ‘legalised’ by the Energy Regulator, add in your ‘compulsory’ purchase of a smart meter that you never own, for a cost that you will never know that gave a few smarties hundreds of millions of personal $ because they bought the meters at a price of perhaps 25% of their sale price, but you can never know it because it is commercial in confidence and mandated …
Surely these represent most extraordinary changes to fundamental ways of the conduct of commerce, aided actively by bureaucrats who no doubt consider themselves aside from methods of analysis of national wealth creation and distribution because they have taken fistfulls of your money and mine to make their private wealth schemes.
I pity them, for they will reach an age when they wish to sleep in peace, but cannot, bcause they forever dread the knock on the door to call them to account.
180
Having recently found myself a recipient of welfare benefits, previously having been a huge net contributor, I’m having some interesting conversations with people on the subject.
The one I find most fascinating is the Child Benefit and how that’s justified. For people who earn way above the median wage to receive a government benefit with the supposed intention of being an incentive to have more kids… that seems insane to me on pretty much every level.
I really like the idea of just getting rid of the whole shebang and paying everyone, regardless of circumstance, a basic wage. Enough to feed, clothe and shelter yourself, but not enough to have much of a life on. And getting rid of the progressive tax system and taxing everyone a flat 25% of income regardless of source.
However, the glaring flaw in this scheme is the one Jo pointed out: How to stop everyone voting ourselves more income? Any measure you can take now can be overturned by the next government.
I guess on the plus side, it would at least force everyone to be honest about the greed thing and confront the issue. We’d also get to the collapse part of the cycle real quick.
60
Welfare should be restricted to those who actually need it.
Baby boomers are about to become one of the main beneficiaries of welfare even though they posses huge amounts of wealth tied up in their houses.
Simple solution is to pay baby boomers a pension out of the housing asset (at zero interest) and reclaim it when they die.
Problem solved.
213
I regard myself as a fiscally responsible socialist at heart. What I mean by that is, I subscribe to the belief that if you as a Government can balance the books and ensure enough revenue to balance creating opportunities and providing appropriate levels of welfare, then that is the ideal.
The problem I see today is people expect the Government to manage everything for them and they are not particularly concerned where the money for that largess comes from.
Australia is an amazingly lucky and wealthy nation, we should aspire to a set of systems that guarantee things like unemployment benefits, medical services, affordable education etc etc. But you cant expect to fund these services by borrowing money. What people seem to have forgotten is, you cant live beyond your means and 7 years of Labour blew the Howard surplus and sent the nation in to debt. Eventually that model fails 100% of the time.
“The more people who are dependent on government handouts, the more votes the left can depend on for an ever-expanding welfare state.”
Thomas Sowell
Small wonder Labour and The Greens did everything they could to create an environment where business struggled.
301
Most people know there is always a problem with socialism, basically it is a nice idea which just never works, at least not without a huge squandering of human and natural resources.
Not surprisingly, to achieve power the left turn to populist policies which can always be guaranteed to beggar a nation. Classic examples of this are: Whitlam in Australia, Chavez in Venezuela and Peron in Argentina. Gillard was not given sufficient time to complete the road to ruin. Populist policies require a wide network of blood sucking cronies to implement them – please step forward the trade union barons and champagne socialists.
Promising things which cannot reasonably be delivered is a trait of almost every politician, but then proceeding to implement those promises, regardless of the cost, is a particular trait of the left and that is why Labour/Labor governments in the UK and Australia always leave office with their countries’ finances in a dire mess.
The trouble is if you disenfranchise those who vote these idiots into power by means of education or tax paying ability or whatever, you end up with bloody revolution, where nobody wins.
The Romans found the solution to revolution was ‘panem et circenses’,modern society uses welfare and the left habitually abuses the latter by actively promoting voter dependence on it.
The problem, as Winston Churchill once said, is that democracy is a lousy political system, but all others are much worse.
One thing which might help is introducing a ban on anyone ever holding a high political office, unless they had spent 15 years or more doing something useful, which would automatically exclude all those in advertising, PR, green activism, lobbyism or political research. There are few western leaders today who were not once heavily involved in one or more of these dubious activities.
Most western countries are now run by career politicians, who only know one thing: unfortunately, it is not how the real world works, but how to be a politician.
Sigh……………
180
The main reason socialism fails is that it kills incentive. Why slug your guts out to support some couch potato who whinges about not getting enough of your wages? Bill Shorten thinks the votes are with the couch potatoes but the money is with the poor sods who think work is a noble pursuit.
Bill Shorten should be called the Minister for Mendicants.
140
Except that current democracy with ever increasing benefits is rapidly morphing into socialism under a different name. Except that despite the ever increasing benefits the gap between rich and poor is widening, the middle class is being squeezed out of existence, a few will move into the rich class, most will be forced into the poor class. Ultimately Joanne’s “better tools” ( I think she meant better words) will turn instead to revolution.
Taxes and benefits should both be reduced bit by bit.
A constructive solution would be a wealth tax. A superb essay (long but well worth reading) on this by Chiefio here;
http://chiefio.wordpress.com/2012/11/09/redistributing-an-immodest-suggestion/
20
SG dreamed:
Then you’re expected to hate Tony Abbot. Get your dose of ABC rage here:
I don’t think the lefties make any distinction between giving everybody equal opportunity versus making everybody equally poor. There appear to be different flavours of Egalitarianism depending on what exactly everybody is supposed to have, rights, opportunity, or welfare.
The fierce and unintentionally funny response to #Abbott from the lefty twitterverse has been swift:
A leftist going to jail for tax evasion? Hahahaaa. Now that I’d pay to see.
Go for it lefties! I can see mess hall lattes and better exercise yard equipment being promised in future ALP campaigns.
40
There may be some merit in educating everyone through the education system of their responsibilities to society. I am constantly amazed at the numbers that appear to exact some benefit whether it is pension or some such because they have paid taxes all their lives. They discount all other aspects of running a functioning economy.
71
Thank you Jo, it is always bracing to regularly revisit those two pieces of wisdom, but then again, I am an old cynic, due sadly, to painful experience.
70
Add to all that the huge wage paid to politicians then a very generous superannuation paid for life along with a number of other perks.
So the politicians incentive is to get re-elected so that is what directs their policy.
I have no beef with earning a respectable income, however if your policies have a negative impact on the population then that should impact on your lifelong pension.
If they are never accountable apart from the polling booth then what is the incentive to do good because they win either way.
140
Latin: Cumulus Formitor – surplus producer. Or perhaps: Formitoria – the productive ones.
30
It is a complete and utter lie to say that 48% of families pay no net tax. The average family pays hundreds of dollars a week in indirect taxes to the federal, state and local governments. These taxes and charges were ignored in the article. Most of the ‘benefits’ paid to families are simply returned to the various level of government via indirect charges (taxes).
This shonky report ignored all state and local taxes plus all corporate taxes (which are indirectly paid by consumers). Royalties, capital gains tax, GST, payroll tax, luxury car tax, fuel excise, tobacco and alcohol excises, stamp duty, land tax, licence fees, levies, import duties etc, etc, etc were all ignored.
280
Great civilisations have averaged 200 years. Christianity has been with us for 2000 years. Maybe we need to adopt the principles espoused by the Christ. Give to Caesar what belongs to Caesar, and to God what belongs to God. Love your neighbour as yourself does not mean taking advantage of your neighbour.
133
The Chinese civilisation have been going for around 5000 years. They had a temporary setback between 1840 and 1980 but are quickly reverting to their natural role as the world’s greatest economic and technological power.
The Roman Empire is still around after 2500 years. The secular government moved to Constantinople and survived until 1452. The Roman branch simply morphed into the Roman Catholic Church in the 4th Century. It’s now far richer and more powerful than it was 2000 years ago.
93
I would hardly state feeding people alive to lions morphing to state sanctioned religion as simple.
However truth does hold in your statement that government conforms to opinion to take control.
Where does this take us ? … well from treat others as yourself to burn the dissenters.
Certainty divides, uncertainty unites!
00
All our laws and culture in Australia as in Britain, America and most other western countries are based on Judeo Christian beliefs.
72
Sorry but our laws and customs have asolutely nothing to do with Judaism and very little to do with Christianity. Judaism before the Middle Ages was similar to Islam. Early Christianity borrowed heaily from Buddhism and other mystical Eastern belief systems.
Our Western culture was created by Greek and Roman pagans and further refined by secular forces during the Enlighteenment. Our common law legal system is based largely on the pre-Christain Danelaw which emphasised propery rights.
45
Clue BB: What is the common denominator linking Judaism, Christianity and Islam?
30
Abraham…
BB, show how the laws and the moral structure of western culture is not based on the Ten Commandments.
20
Riddle me this BB – if our laws and culture are not based on Judeo Christian beliefs – what is good and what is evil?
42
“Maybe we need to adopt the principles espoused by the Christ”
Oooooh yes! Let’s burn a few witches, sure to solve the problem.
010
I don’t recall any where in the bible that Christ suggested burning a witch. I’m sure you can point me to your reference for your belief?
112
Gordon, for burning witches see Spanish Inquisition and the Bishop Torquemada -nothing to do with the teachings of Christ.
60
So we take a look at just how much the governments take as a percentage of the GDP and what their living standards are and their social cohesion and perhaps how they got to where they are.
From Wiki we get this list ;
List of countries by tax revenue as percentage of GDP
The first column is taken from the Heritage Foundations rankings of nations for economic freedom.
Number one fitting their criteria for economic freedom being Hong Kong. Number three being Australia.
The second column in the Wiki list is the OECD rankings for countries re their government’s percentage take of GDP.
As the OECD’s Australian GDP tax take is listed as only being from 2008 here we will use the 2012 Heritage Foundations figure for the countries we look at .
An economic tax percentage take that I have seen recently suggest that around the 24% tax take by governments is about the limit before it starts to have a negative economic effect.
Then we look at a couple of Scandinavian countries which are somewhat renown for both high living standards plus a very comprehensive government social support system
. Denmark has a government take of 49% of it’s GDP
However Denmark is in some serious eonomic troubles mostly created by their drive to create a energy supply system based almost exclusively upon a hugely subsidised wind turbine renewable energy system which has to literally give away power to Sweden when there is a surplus of power but the Danes still have to pay their wind generators for this power.
And then when the wind does not blow they have to buy power back from the Swede’s very big hydro system, effectively paying about double for some of it’s electrical power that the other European countries pay for electricity which is itself about double the American price while European gas prices are about four times the American price.
‘
The Australian government’s percentage take of the GDP in 2012 is given as 25.8%
However Sweden’s government take of the GDP is given as 45.8% and Sweden certainly has the reputation of being a very successful, highly advanced country with high living standards and a very egalitarian social situation.
Even Sweden is cutting it’s economic cloth to suit changing circumstances but it’s governments take of the GDP is still close to the 50% mark as this 2012 article from The Economist lays out in an article that is very relevant to Jo’s headline post .
Sweden
The new model
A bit more unequal, a lot more efficient
“
If Sweden can do it so can we.
But will we?
60
And we stand at #12 where we struggle to keep from getting worse.
When I was a kid I and a friend or my sister could open up a lemon aid stand on the sidewalk and when a police car showed up one time, the two officers bought some, drank it with a smile on their faces and went on their way (true story). Now the police show up, definitely not smiling and tell you you can’t have the lemon aid stand in many cities, including New York.
There are no more two officer patrol cars around either, only one/car because of budget limitations.
90
Correct me if I am wrong, but I seem to remember reading somewhere that the Scandanavian countries were heading for trouble and trying to reform their welfare system because of the increasing numbers receiving long term welfare, and that the vast majority of these recipients were immigrants (from the Middle East???). Scandanavian countries may have an extensive welfare system but they do not have a hand out mentality. Unlike Australia, their culture is very much geared towards contributing. They are expected to work and contribute. Again, if I remember correctly, they need over 80% of their population working and paying taxes to be able to afford their welfare system. Feel free to correct me if I am wrong.
50
In Sweden the “liberals” (recent government) promote open boarders trying to kill the welfare state. People not allowed to be in the country can get social benefits!?
The same “liberals” use the climate change hype to get new nuclear power stations. (low carbon)
The “liberals” call the opposition to open boarders, racists, fascists …
They also say that violence can be used against certain political opposition. Prime Minister Reinfeldt.
Business leaders are in favor of the “liberals”
As I see it, they are softly killing the welfare state, and much more violence is around the corner.
Not only in Sweden is open boarders an issue in the elections to the EU parliament this month. Democratic deficit ……..is playing with fire.
30
All this talk of civilisations & taxes …
May 9 2014
Byzantine ancestors of tablet computers found in Yenikapı diggings
Remains unearthed in the excavations drew great attention not only in Turkish, but also in world archaeology.
The remains have survived as organic products, which greatly impressed the scientific world.
A wooden notebook, which was found in a sunken ship, is considered the Byzantine’s invention akin to the likes of the modern-day tablet computer.
It is made of wood and can be opened like a notebook.
It has a few pages and you can take notes using wax.
Also, when you draw its sliding part, there are small weights used as an assay balance.
50
This story reminds me of my hero, the world’s first consultant, Orban.
Orban was a brilliant Hungarian engineer who lived in the 1400s.
http://en.wikipedia.org/wiki/Orban
In 1452 he originally offered his services to the Byzantines, but emperor Constantine XI could not afford his high salary nor did he possess the materials necessary for constructing such a large siege cannon. Orban then left Constantinople and approached the Ottoman sultan Mehmed II who was in preparations to siege the city, claiming that his weapon could blast ‘the walls of Babylon itself’. Given abundant funds and materials, the engineer built the gun within three months at Adrianople, from which it was dragged by sixty oxen to Constantinople. In the meantime, Orban also produced other cannon instrumental for the Turkish siege forces.
Naturally, in a truly heroic effort which would set the path for all other consultants to follow, Orban was reportedly blown up by one of his fiendish creations.
60
Poor Orban! But someone certainly finally succeeded. Have you seen the size of some of the U.S. Civil War mortars or the size of some of the German’s WWII guns? These were so large they had to be transported by railroad car. Then there were the guns on our battleships.
I didn’t find any info on the diameter of Orban’s cannon but I think the examples above don’t measure up to his fiendish creations. But give it time, just give it time. Or just remember the atomic bombs on Hiroshima and Nagasaki for destroying a city. 😉
Let us hope we never go there again.
60
There is an 18th century cannon on display in a public park near the Kremlin in Moscow
It is HUGE – not in barrel length, but in barrel width. It took three of us to encircle the barrel with our outstretched arms. The cannon balls with it need a crane to lift them. I have very little idea how it was ever moved from one place to another. It is supposedly the largest-width cannon ever cast
It has one other distinguishing feature – it has never been fired ! The Russians told me no one has ever been game to light it up 🙂
30
Is it the Tsar Cannon?
The Tsar Cannon, built at the end of the 16th century, is really just a fancy piece of decoration that seeks to impress. The contemporary cannon balls are actually too big to fit into the gun of the cannon. In keeping with its noble name, it is finely decorated with scroll work and reliefs that transforms this military machine into a work of art. The last couple of decades have seen published images of American and Russian presidents shaking hands in front of the Tsar Cannon. Interestingly, the cannon is a working cannon. Evidence suggests it was fired at least once, though certainly with cannon balls that were made to fit its barrel.
according to one online sourse.
00
I always wondered if there was something “wooden” about my computers every time they started to act up, which was too frequently by a long way.
At one point I would have traded all three computers in my office for a serviceable tree. Not kidding around either.
60
We need to differentiate between Democracy and the Welfare State. Welfare states are doomed by their own inefficiency and the abuse by its recipients. The fact is, we already have private insurance companies providing Income Protection schemes, we have private pensions – all much more efficient, and VOLUNTARY. And that is the key. The answer to a successful democracy is to slash tax for anything that can be provided more efficiently by the free, voluntary private sector. And that’s just about everything except defence and police.
120
So you say Sweden and Denmark are doomed but not the UK?
Give us an evaluation.
31
As I do not get an evaluation on why Sweden and Denmark are doomed I give a link to an evaluation of social cohesion.
http://www.bertelsmann-stiftung.de/cps/rde/xchg/bst_engl/hs.xsl/nachrichten_117316.htm
20
Do you think governments where there are such nice convenient things as welfare in one form or another will easily go for elimination of those things in favor of privatization?
How then will the ruling class get itself reelected constantly?
50
Margaret Thatcher once said “The problem with socialism is that you eventually run out of other peoples money”. This left wing credo that so devoutly espouses the mantra of sustainability hasn’t had the simple smarts to realize that its own practices are unsustainable. It’s the same here in NZ, elections have been bought with taxpayers money using mechanisms which are ultimately unsustainable. We have middle class welfare and any attempt to remove this largesse promises electoral annihilation. We are creeping slowly towards disaster because the best and the brightest will one day realize that they are being ripped off. If ‘they’ want to talk about tipping points and anthropomorphic threats then the most pertinent piece of scientific equipment they could use is a mirror. But then I’m fooling myself, mirrors are for people who can face themselves.
I’ve previewed my post and just wish I could express myself better on an issue that I consider far, far more threatening than any natural variation of an ever changing climate in a vast chaotic system that we barely understand.
320
And by heavens, does that not sound an awful lot like a summary of “Atlas Shrugged”!!
May I say: “Well said, sir!”, Ceetee.
100
Anymore reading the WSJ or any other international paper often reads like a section from Atlas Shrugged. It’s getting really depressing.
80
Amen to all of comment 19 and its replies! 🙂
60
Up to this point.
40
Creeping to disaster not so slowly Ceetee…
The usual melange of ‘victims’ that crow about ‘sustainability’ as a thinly disguised mantra for their leftist Green redistributive ideology overlook the pre-eminent necessity of economic sustainability as they idiotically crow about free wind and sun.
The social and fiscal narcosis brought about by suckling from a state nipple of apparently infinitely sustainable largesse engenders victims and a victim mindset – whether indviduals or institutions – together with the auto-appreciation that the teat remains in situ as long as they vote for it to continue.
A no brainer really…all the unsustainable way to a potentially, broken totalitarian end.
In reality and to our collective great good fortune, there seems to be just enough sanity, independence and outight fortitude, well illustrated by comments on this site, to allow the clanking, decrepit illusion of social demoncracy to survive politically and economically. The democratic assualt de jour courtesy of the UN climate czars, still remains the greatest threat.
30
Philosophically, please remember that Government is not at the centre of your universe.
Most self-made people succeed by treating government imposts as an expense, like tyres for their truck fleet, but worth little time for analysis of pros and cons. A compulsory and annoying occasional attention seeker that crops up unwanted. Swat it like you would a fly and move on to more interesting topics.
We are still at a stage where there are plenty of ways to succeed while ignoring government heartily.
90
Geoff, the problem as I see it with that analyses is that there are many who far from ‘ignoring government’ look to it as a source of everything. Like a surrogate parent. I do in principle agree with what you are saying.
70
True, Geoff. But those ways are getting harder and harder to make use of with increasing regulation and the worst part of all, appearance in the workforce of the victims of our modern education, many of them now in policy making positions. It can be subtle when you run into it but it’s there and might as well be a brick wall.
90
Those are very interesting quotes about democracy Jo. Thank you. I can certainly see these processes happening both here and in the UK. Everything goes rotten with greed.
80
The current darling of the Modern Liberals is a Frenchman called Thomas Piketty, whose best-selling book is based on the theme of quenching the supposed increasing and unwelcome income inequality.
The Guardian (who else?) says his proposals for throttling capitalism “are not nearly radical enough”, while the BBC (who else?) has conducted a series of fawning softball interviews with the fellow.
Little realizing, of course, that if his measures were actually put into place, even parasites like the BBC would have to trim their extravagances, including their near-institutionalized support of The Guardian through job ads.
110
Piketty does serve a useful purpose in that he brings to the fore the fact that we are in now in the age of ‘super-capitalism’.
I am not sure of his solutions, or if in fact there are any solutions, but those here who think that handing all government services across to private enterprise is the answer then they are in for a disappointment. We will not all end up better off, although some will.
See the graphic on this page: Average Incomes. United States. 1913 to 2012. Note the meteoric ascent in the incomes of the 0.01%, the 0.1% and the 1%. Those guys like governments and their legislation a lot more than we do.
http://www.huffingtonpost.com/2014/05/06/hedge-fund-managers-billions_n_5273307.html
00
I wonder if there are stats defining those who add productive value to communities and those who simply count, think and juggle to help feed greed.
Like money from thin air by the Fractional Reserve Banking system; government and corporate consultants; think-tanks and strategists; commissions and summits…
Not that there’s anything wrong with that, providing they don’t totally outnumber those who actually produce the means for their existence.
60
Slowly, or rapidly, at some unstoppable pace, Tyler’s analysis of representative government is coming true. Once the takers outnumber the producers (or can just purchase an election), they consistently vote themselves a larger and larger share of what the producers produce.
I push the button on the screen, knowing full well that ACORN had negated my vote some 77,000 times over, with fraudulently-registered “voters”, fueled by the very government which is supposedly protecting my rights to the same degree as theirs.
Of course that is a joke; I would append the customary “sarc” tag to this, but the nightmare is just beginning.
90
Mark,
May I suggest, since you understand the election stealing that’s been happening, that you get involved with Judicial Watch, http://www.judicialwatch.org. They are the only organization putting up a significant fight to prevent stolen elections. Their sole reason for being is to discover and expose government corruption. They’re equal opportunity and went after George W. Bush when he was president, not to mention more than a few members of the House and Senate of both parties. And they don’t give up because the going gets tough. If legitimate FOIA requests are not honored they file suit to get the information. At one point they had over 400 such suits pending. They have also sued several states, Florida and Ohio among them, demanding that those states cleanup their voter rolls as required by federal law. They win most of the suits they file.
They need financial support to any level you can and a $50 donation makes you a member and will get you their monthly newsletter and weekly email update from the president of the organization, Tom Fitton. You can also get good solid information about how you can get involved locally — and legally — and actually help uncover and prevent voter fraud.
They are already a tax exempt organization under 501(C) of the Internal Revenue Code and haven’t yet been subject to any abuse. In any case, they know enough not to give membership information to the IRS. But even if they should become forced to give up that information I intend to keep supporting them in their effort.
I know this is a pretty heavy handed and bold solicitation. But the fight is necessary and Judicial Watch is right in the middle of it. They are worth every bit of your time and money you can devote to them. What they discovered in the infamous Benghazi affair is what pushed the House to form a select committee to get to the bottom of Benghazi-gate. This alone is worth all the money I’ve sent them.
And you are right, the nightmare is just beginning. There will be losses in the fight but we must fight.
70
Hi Roy,
Good to hear from you, and thanks for the info.
I would if I could. Sadly, I am making about the same as I did 35 years ago (in “un-adjusted” US dollars), and in contrast to then, my wife and I are raising our four grandchildren, so every precious penny which shows up at the door (and leaves too quickly) is needed just to get by.
But, to the larger point, with groups like ACORN getting the taxpayer funds to perpetuate their fraudulent practices, we have the proverbial ‘positive feedback loop’: they steal an election, which means they get more tax dollars and more welfare-is-a-way-of-life voters and more homage from the politicians they helped elect, giving us the ‘death of a thousand cuts’ to the working/producers. I applaud any group or individual who works to break that feedback loop, but we are already 235 years into Tyler’s 200-year-average time frame.
I truly fear where we are going; but know this, I am diligently preparing for the next shoe to drop, and when/if it does, I’ll be more than ready to do my share.
I will rejoice with great joy if some kind of sanity is restored on our side of the Big Pond (hey! look!! Australia did it!!! Why can’t we?!?!?!?), but I shan’t hold my breath waiting for it happen. Know that I am with you in spirit. The Good Lord willin’ and the creek don’t rise, some day I’ll join you in practice as well.
Thanks for you post, and Godspeed to you, the T.E.A. Party, and Judicial Watch.
( and Jo, and Anthony, and anyone else fighting for our freedoms! )
50
I understand your position, Mark, having recently retired myself and seeing my income drop by an unpleasant percentage. Fortunately I’m not raising four grand children because unfortunately I haven’t any grand children (a medical problem with no solution). So all other things being equal I think we’ll make it. But keeping all other things equal is very worrisome.
I’m not sure what you expect the endgame of all this to be but I’m prepared to go down fighting if I must go down. I hope for better but I prepare for the worst.
You might find things you can do to join the fight on the Judicial Watch web site without costing you anything. I don’t know for sure because being a member, they send me everything.
40
Its a good point in general, but your figures for the USA are obvious rubbish, as common sense should suggest. Simply refer to last Friday’s BLS data for example. c145m employed (total),c20m in government
20
The Tragedy of the Commons (Garrett Hardin) was often trotted out by those on the left to make those on the right feel guilty about using natural resources.
What Jo reminds us of is the current Tragedy of the Commons, where people who understand arithmetic look through narrowed eyes at growing usage of societal resources and shrinking contributions.
In the last US election some conservative commenters framed the issue as Makers vs Takers.
I prefer the image where there are more people in the cart than there are people to pull the cart. People won’t get out of the cart in any great numbers until their collective weight breaks it.
This is the real “sustainability” issue facing society. Take that word back from those who have used it so irresponsibly. Use it properly.
Who has the political talent to cure people of a collective sense of entitlement? I just can’t see it.
Until there is a crisis, people have more reasons to climb into the cart than out of it. A rational individual sees this and prepares for the storms when the system fails.
100
Being realistic — unless something can be done about the trend toward dependency on government the only possible answer is, “Down the drain.”
Since history shows that cultures collapse and something eventually rises up in their place I have to suppose that something will follow us. But what? The usual thing is tribalism, dictatorship and their variants. It took centuries after the fall of Greco-Roman civilization to reach the Magna Carta upon which our present western democracies at least used to be based.
Democracy was an unusual thing in this world for a long time, indeed, it didn’t exist. And we’re throwing it away as fast as we can in favor of an economic and social order that history shows can only exist if forced on the people, increasing the level of dictatorship and decreasing productivity of useful things until collapse. No one stays in the resulting system voluntarily who has the ambition to accomplish something. Only the leaches will love it — except their gravy train will dry up and then they too will hate it. But by then it will be another span of centuries to get out of it. It’s hard to see any form of democracy on the horizon to replace us when we collapse.
In the past there was always somewhere to run to escape the heavy foot of the ruling class if you could make it. Today there’s no place left to run.
70
Roy and Jo,
Is this not the reason for a Monarchy? Perhaps for each distruction by “the many” per 200 years, there can be “a” correction by “the one” per 200 years? Esentially only once per 10 reproductive cycles is needed, absolute monarch or absolute dictator. Perhaps the nine US justices is better, but I cannot decern any evidence! The many can do well for a while, but the “one” or “few” must always be free of the “many”, or any financial interests. High regard “from the many”, seems to trump all money! “How dey do dat?”
11
Will Janoschka,
I thought quite a while about how to answer you or even whether to answer you. But the way we’re going in the United States looks like deteriorating into a virtual dictatorship with Obama as the head and various Federal Departments like Department of Education, Health and Human services, … …, dictating various parts of life in this country. Is this where you want things to go?
I certainly do not. If we cannot retain our basic freedoms under the Constitution we will have lost our country and become serfs if not slaves to saving the Earth and righting every wrong no matter how trivial or imaginary, in our own homes, on our own property, in our own towns, cities and states.
The history of dictatorships is a very terrible tale of every kind of abuse you can imagine along with special privilege for the ruling class that keeps the dictator in power.
What we need instead is leaders. Whether Tony Abbott ultimately measures up to the required standard remains to be seen. Who will emerge as the right leader or even if someone will emerge as the right leader in the rest of the world is also an open question. But whatever happens, do not hope for or work for dictatorship, no matter how benevolent — the power to dictate will corrupt anyone, no matter who.
00
And every now and then I find myself wishing I had the power to walk right into the Oval Office and toss Obama out into the middle of Pennsylvania Avenue. Following that I would do the same on Capitol Hill and in numerous Federal Offices around DC and across the country.
Well, It’s good that I can’t do that because I would soon enough become the dictator from Hell, just like anyone else would. It starts out meaning well and fixing abuses. But soon enough it becomes worse than the abuses it fixed.
00
The ancients knew that democracy could only last until the people voted themselves a raid on the treasury.
What they didn’t understand was
CREDIT
The U.S. Treasury ran out of money years ago, yet we still spend massive amounts of money.
70
One slight flaw in the argument is that there never really can be total independence – no one person can make a pencil, for example. Where does your Crocodile Dundee-type get his big knife? Or his jeans, rifle, SUV, etc.? However, the basis of the argument is valid; this is something that will come to light, should Scotland vote for independence – apparently, about 95% of the work-force are employees of the state; how long will it be before the few nett tax-payers decamp abroad – like, say, to Switzerland (to join Mr Connery)?
40
The Scandahovians seem to be doing quite well, perhaps breeding? “How dey do dat?”
01
We are toast.
http://www.usdebtclock.org/index.html
Hover over any category to see the origin of the number.
How long before we start giving away resources to the Chinese when they call in the debt? Watch Ecuador; China is doing something similar there as I understand it.
60
“I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn’t minimize their tax they want their heads read because as a government I can tell you you’re not spending it that well that we should be donating extra.”
Kerry Francis Bullmore Packer Nov 1991.
120
Come on. Democracy? What a load of drivel. If democracy is defined as the rule of the people there never has and never will be a democracy. Look at any political system past and present, including our own, and ask who rules? The people? Or sectional interests?
Given there are a multiplicity of views on every policy subject from “the people” democracy is a non starter. All we can hope for is an enlightened, benevolent dictatorship by the most powerful sectional interests in a given society.
Who keeps the “independent” entrepreneurs in a job? Oh the rest of the few “independents” and an overwhelming number of dependents including those in overpaid and generally useless for society jobs (e.g. alarmist climate scientists, sociologists and dare I say it economists who seem to have about the same rate of predictive outcomes as the A climate scientists) and those minions on government handouts.
Independents? No such animal.
Perhaps a democracy should be redefined as a mutually dependent society?
(Incidentally I started an engineering business that is still operating after 45 years. It was dependent on a bank loan and beyond the bank is entirely dependent on the goodwill of our customers whom we try to keep by producing things that work. We still have a few customers who have been with us for over 40 years. Now that’s real mutual dependency in my book).
70
I’m throwing in this comment along with a thought along the lines of how to get folks to vote themselves less largesse from the common purse:
Thanks to Obamacare, the health plan for the elderly (which is not a new plan, after all) recently was revealed by commentators to be little more than a long-term loan.
If the elderly sign up for Medicare, and then boatloads of money gets spent on their health care, they have signed up to allow the government to come take from their estate sufficient money to cover what was spent on them.
So if you really do care about leaving anything substantial to your heirs, you should find a way to deal with that. Otherwise, your heirs will be hit up with a (probably) huge bill for your last expenses. I have even heard stories that make it sound like they will have to borrow to pay the bill or have their paychecks garnished!
Of course, this is a US issue. Does anything like that happen elsewhere in the world?
00
A Case Study
How Much Net Energy Does The Spain’s Solar PV Program Deliver?
Why Spain?
• The best irradiated country in Europe
• Second in Europe in PV installations, only after Germany
(Some additional economic costs not included, such as *Royal Decree tax for electricity producers or due payments to Agents representatives.)
*Proving that idiocy truly has no bounds, Spain issued a “royal decree” taxing sunlight gatherers.
. . .
Surely part of the biggest theft from treasury ever?
20
After being away for 2 weeks in Sydney I can add there are some great imbalances in what some people receive in government support to what they actually earn, let’s not forget the professional welfare cheats/rorters that compound the stage of “dependence” in this downward spiral.
They seem so smug with their scamming abilities not realizing the economic and social damage being done to our society, but I guess if the money goes offshore and you don’t respect your country in the first place…..
30
On the other side of the balance sheet are the numerous hours of voluntary work, not measurable in our financial taxation or welfare systems. They most likely don’t tip the balance very far but even so they should somehow be included.
20
This I can relate to! The ‘guy’ in the cemetary or park that can replant, then hug the children nearby that always want to learn how to do dat, the parents also nearby not so much!
00
I like Stuart Elliot’s reference at #26 to Makers versus Takers.
The Government is generally a Taker as are all who depend on government payments.
What we (as a democratic country) have been doing over the last 40 years has been increasing the payments to more and more groups on the basis that “they need more support”. And I include in the Taker group all Unions who force up the price of labour beyond what a free market would pay.
So then we come to the question: Who are the Makers?
Clearly they are the people and organizations who make something that other people are prepared to pay for – the production of goods and services. That starts with farmers and manufacturers, but they depend on infrastructure (roads, rail, ships, power, water, distributors, retailers etc) and skilled, fit workers (education, healthcare etc).
Governments have been increasingly taking from the Makers to give more to the Takers. As Jo has pointed out, that starts to break down when Governments get elected by promising to give more to the Takers, and then must increase taxes on the Makers or borrow to make up the difference. What has happened in Australia is that our international competitiveness has declined because of all the restrictions and regulations (thanks greenies and other do-gooders), as well as taxes, so some of the Makers have decided to quit.
It’s not just about the government balancing the budget, it’s also about spending what they have in productive areas to generate wealth. Only then can there be sufficient income to support a limited number of Takers.
70
50
You seem to be only only to be describing yourself in glowing terms!
Do you have any of your thoughts to offer in the Jo Nova article “can democracy ever survive over periods > 300 years”? The US likely will not make it! Countries with fewer providers and more takers are toast!
Have you anything to offer?
00
Funny that, I’ve basically turned my back on contributing to the government and you refer to this as ‘glowing’? The third category is neither being a provider or a parasite.
I don’t buy your alarmist drivel that America is toast any more than the planet will boil. What is the alternative to democracy and how well has that worked in the past?
Anyway, what are you going to do about it? Absolutely nothing! There will be a painful correction.
Did you read the whole post? What is your invented word for someone who is not a parasite on the taxpayer?
00
“Funny that, I’ve basically turned my back on contributing to the government and you refer to this as ‘glowing’? The third category is neither being a provider or a parasite.”
Your “glowing” of yourself is only that you think that there “is” a third “catagory”.
“I don’t buy your alarmist drivel that America is toast any more than the planet will boil. What is the alternative to democracy and how well has that worked in the past?”
The other forms are evidenced in “rule” since Babilonia. Some have epochs >> 200 years. What is your definition of “alternative” or “worked”. Please try to be informitive and helpful to others!
See my posts in 27.1 and 29.1. Do you have “anything” to offer to others?
00
Australian Federal income tax was introduced in 1915 to fund the war effort for WWI at a rate of 5%. After the war the tax was retained specifically to provide an age pension for retirees at age 65.
Since then the tax has increased by an order of magnitude, and now retirees are being told we can’t afford to pay them a pension. Such is the morality of representative government!
Ann Rand and “Atlas Shrugged” has been mentioned above.
For those who know it, the answer seems to be – Go Galt.
40
Expect more parasites to be de-latched.
40
Makes a nice change from the blatant pork barrelling of our previous socialist Labor Government borrowing against the furture of the entire country merely to keep all their union comrades in beer, prostitutes – come the Royal Commission.
10
C. Northcote Parkinson author “The Law and the Profits” published 1959 on this very problem.
He pointed out that the politicians always start by asking “how much do we want to spend?” Then they go on to how to extract it from the public.
He suggested that they start by saying “How much can the country afford and what on?” and suggests a limit.
O/T ? I have an aunt (a nurse) who was talked out of retirement after 2 years as they had trouble getting staff. When she tried to park she was told that the after hours car park was no longer available as all the spaces (16) had been assigned to the “new managers”. In 2 years the hospital has acquired 22 new managers without one new ward or even bed being added. When you have a layer of administrators collecting information and transmitting it to another layer, who forward it to a third layer in Canberra…..
and when the politicians decide to “boost efficiency” it usually means another layer locally and yet more in Canberra.
Did I mention he also wrote Parkinson’s Law? You younger ones should look for it.
“When the Union Jack waved over palm and pine, and the sun never set on the British Empire, the Colonial Office managed with 26 clerks and 2 part-time turkish interpreters. In 1960 as ‘the winds of change’ blew a howling gale it required over 8,000 to administer what remained”. There were some statistics showing how the British Navy acquired Admiralty clerks as they lost ships; although he pointed out that it seemed likely that they would continue to gain clerks even without any ships at all.
60
Parkinson also invented other subsidiary laws of equal moment, such as the Law of Triviality. His seminal example is this:
Parkinson rocks!
40
On this committee thing.
In 2010, the Americans attempted to introduce Cap and Trade legislation. It failed to get passed, thankfully, but what would surprise you is how close the Australian Legislation was to what this was all about.
The legislation was artfully called The American Power Act, and how corny is that eh! It was sponsored by Senators John Kerry and the Independent (Democrat leaning, well, much more than leaning really) Joseph Lieberman, and it was 987 pages long.
It dealt with Cap and Trade for CO2 emissions, renewable power, and also Clean coal, as they referred to it as, in actuality CCS.
However, what surprised me most about the legislation was how little the headline subjects were dealt with, how lightly, how ill informed, and how misguided it was. However, as part of each of those headline areas there were literally hundreds of pages (in each section) devoted to the meetings, the committees, the cost for all of these, the reimbursement of every aspect of attendance at these meetings from paid air travel, accommodation, etc, etc etc, not just details, but right down to the minutiae, the most trivial of things. Fully half and more of the total number of pages dealt with the tiniest details. The actual wording of what the Legislation was about in the first place was so full of holes it was laughable, literally.
And the absolute best part of the whole legislation, which, seriously, I think went way over the heads (and at considerable altitude) of most Americans was that the date for payment for the Cap and Trade part of the legislation, the date all the costs were tallied up, and paid to the Government was ….. April the First each year.
Sometimes I skipped over a hundred or more pages at a time dealing with things about Committees.
The actual detail on the whole subject was confusing, full of holes, and reliant upon technologies that were non existent, overstated, and hopefully to come to pass at the required scale way off into the future. There was no hesitation that CCS would work on the scale required, just flat out you will introduce this at the earliest time.
It was an absolute joke, the whole lot of it. It failed miserably to get up, and then lo and behold, whole swathes of it appeared in the Australian Legislation.
Tony.
50
Dear Jo,
Try as I may, I am unable to Log In in the space provided to LOG IN on Home Page. I rejoined under Sunray some months ago, with a small donation. I have been able to comment in the space provided here at the end of all of the comments.
00
I don’t think this problem can be solved, and I think it shows why democracy is a morally contemptible system.
People often reference democracy as though it’s self-evidently the best political system. It never occurs to them that there’s no good reason why
a) everyone should have an equal vote in the disposition of your property, your labour, your freedom and your life, or
b) everything should presumptively be a political decision, rather than a voluntary decision.
11
There might be a democracy in some jungle village somewhere, but I doubt there has been a true democracy since Bronze Age Greece, and even then that one was sketchy at best. The US is a Representative Republic which depends on the citizenry to stay awake and aware. But we are more interested in the latest IWhatever, Playstations and TMZ to waste time on politics. Besides, my guy in DC is fine, so I’ll keep him. It’s always the others that suck.
That being said, I have to get back to the NFL Draft.
20
People often reference democracy as though it’s self-evidently the best political system. It never occurs to them that there’s no good reason why.
Indeed,
All galectic, current universe, Solar system, Sun,
partial solar system Venus, Earth, Mars, has distinct rational rules of what is or may be. (—) Any “best” “political system” is so far down in the muck, that it never need be considered in this universe.
00
The problem with Democracy as I see it is that you tend to get the government you deserve.
00
something to consider:
tellingly, only the alt media have even reported the Yellen/Sanders exchange:
9 May: HuffPo: Igor Bobic: Fed Chair Not Sure Whether To Call U.S. An Oligarchy Or Democracy
Federal Reserve chair Janet Yellen said Wednesday that she doesn’t know whether the U.S. political system is a democracy or an oligarchy, as a recent study concluded, but that growing inequality is an issue lawmakers should address…
During a hearing on Capitol Hill, Sen. Bernie Sanders (I-Vt.) asked Yellen about a Princeton study (LINK) that found that wealthy, well-connected individuals have far more influence over national policy than the average voter…
“I don’t know what to call our system,” she added. “I prefer not to give labels, but there’s no question we’ve had the trend toward growing inequality, and I personally find it a very worrisome trend that deserves the attention of policy makers.”…
http://www.huffingtonpost.com/2014/05/09/janet-yellen-oligarchy_n_5296399.html
21 April: Washington Times: Cheryl K. Chumley: America is an oligarchy, not a democracy or republic, university study finds
Researchers then concluded that U.S. policies are formed more by special interest groups than by politicians properly representing the will of the general people, including the lower-income class…
http://www.washingtontimes.com/news/2014/apr/21/americas-oligarchy-not-democracy-or-republic-unive/
17 April: BBC: Study: US is an oligarchy, not a democracy
So concludes a recent study by Princeton University Prof Martin Gilens and Northwestern University Prof Benjamin I Page.
This is not news, you say…
This is the “Duh Report”, says Death and Taxes magazine’s Robyn Pennacchia. Maybe, she writes, Americans should just accept their fate.
“Perhaps we ought to suck it up, admit we have a classist society and do like England where we have a House of Lords and a House of Commoners,” she writes, “instead of pretending as though we all have some kind of equal opportunity here.”…
http://www.bbc.com/news/blogs-echochambers-27074746
00
btw any claims about taxes needs to include indirect taxes.
the two-party system is a charade:
9 May: UK Daily Mail: Jason Groves: Cameron friend lobbying for Pfizer in takeover bid: PM and key figure in £63 billion deal went on holiday together
Lobbyist received a knighthood in the New Year’s Honours List
Tory sources pointed out that Sir Alan, whose firm acted for US food giant Kraft in its bitter 2009 take-over of British chocolate maker Cadbury, also had close links to Gordon Brown. Brunswick declined to comment…
Swedish premier Fredrik Reinfeldt yesterday said Pfizer’s promises could not be trusted. Sweden was given assurances by the US firm during its 2002 acquisition of Pharmacia but Mr Reinfeldt said: ‘There were promises that it would mean jobs and operations in Sweden that we don’t think were honoured.’…
http://www.dailymail.co.uk/news/article-2624385/Milliband-accused-major-error-refusing-meeting-Viagra-firm-Pfizer-60billion-takeover-deal.html
is this “metaphor” money well spent?
9 May ARNnet.com: Brian Karlovsky: NBN a “metaphor” for Federal government’s budget challenge: Ziggy Switkowski
“At the required run rate to get this job done by 2020-ish we have to bring on about 100,000 premises a month for 90 months.. so eight years,” he said.
“At the moment we are passing 6,000 a week, so 24,000 a month. We need to increase that by a factor of four.
“It’s more complicated than that but there will be big steps taken forward once we complete the negotiations with Telstra and we can open up the HFC network…
http://www.arnnet.com.au/article/544731/nbn_metaphor_federal_government_budget_challenge_ziggy_switkowski/
14 April: ZDNet: Josh Taylor: NBN payments to Telstra could hit AU$98 billion: Report
Summary: NBN Co could ultimately end up paying Telstra AU$98 billion over the next 55 years in lease payments for ducts, dark fibre and other telecommunications infrastructure, according to a (Communications Day ) report.
The report sighted advice given to the former NBN Co board by Goldman Sachs in May 2013 that stated NBN Co would be required to pay Telstra AU$98.159 billion between 2011 and 2067, with the majority of payments due to Telstra for leasing its ducts, pits and pipes for the National Broadband Network (NBN) infrastructure.
Telstra has always reported the value of its deal with NBN Co to lease its infrastructure and migrate customers onto the NBN as being a net-present value of AU$11.2 billion, but through the leasing arrangements, NBN Co’s payments to Telstra will increase over time as the network expands. The report stated that payments to Telstra will rise from AU$400 million this year up to AU$2.9 billion in 2067…
http://www.zdnet.com/au/nbn-payments-to-telstra-could-hit-au98-billion-report-7000028380/
9 May: ZDNet: Leon Spencer: NBN Co warned to stay out of competitive backhaul market
Summary: An alliance of Australian telecommunications carriers has issued a warning to NBN Co to stay out of the competitive backhaul market, after the company said it would consider the idea in a bid for new sources of revenue.
“Allowing NBN Co into this market can only create the risk of monopoly power being leveraged to undermine competition and destroy the value of private investment. In the long run, consumers will lose,” the spokesperson said…
ONE COMMENT by John L. Ries:
The question is…
…why would a Liberal government (and it’s abundantly clear that NBN’s board and management take their orders from the federal Communications Ministry) allow a publicly owned company subsidized by taxpayers to compete with private enterprise? It makes sense to have it provide the infrastructure, but if private enterprise can profitably serve the end users, then why not let them without any direct government involvement?
Isn’t that the way capitalism is supposed to work?
http://www.zdnet.com/nbn-co-warned-to-stay-out-of-competitive-backhaul-market-7000029267/
10
This American says it better than I can –
50
Colin41 –
brought up the connection between taxes & wars, which has a history:
History of the Income Tax in the United States
The high cost of the War of 1812 brought about the nation’s first sales taxes on gold, silverware, jewelry, and watches. In 1817, however, Congress did away with all internal taxes, relying on tariffs on imported goods to provide sufficient funds for running the government.
In 1862, in order to support the Civil War effort, Congress enacted the nation’s first income tax law…
http://www.infoplease.com/ipa/A0005921.html
UK National Archives: A tax to beat Napoleon
Income Tax was announced in 1798, and introduced in 1799, as a means of paying for the war against the French forces under Napoleon…
http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/history/taxhis1.htm
is the following bipartisan-supported money well spent, not even considering the almost-weekly reports of cost overruns, performance & production problems, etc? it is said our 58 jets will cost $24 billion over their lifetime (# of yrs unspecified), while Canada’s 65 are estimated to cost $46bn over 30-yr lifetime:
30 April: Toronto Star Editorial: Flying in the dark on the F-35 ‘stealth’ fighter: Editorial
Six years after Stephen Harper began lobbying for the F-35, we’re still flying in the dark on its cost and on the merits of its competitors.
After bungling Canada’s proposed F-35 “stealth” fighter purchase so badly that his government was held in contempt of Parliament partly because of it, Prime Minister Stephen Harper has a responsibility to come clean with Canadians on the costly project.
The Conservatives have been temporizing for two years, since the auditor general reported in 2012 that Parliament had been misled to the tune of $10 billion on the plane’s true costs…
It may be that the F-35 is the best choice. The Americans, British and Australians are buying it. But that has yet to be shown…
***Equipping Canada with a fleet of 65 F-35 Lightning II’s will cost at least $46 billion over the jets’ 30-year operational lifetime, according to the government…
Given the government’s history of lowballing the cost, taxpayers have reason for concern…
It has been two years now since the Star pointed out that the government has never explained convincingly why it didn’t opt for a competition in the first place, or why it chose to keep the public in the dark for so long on the true cost. We’re still waiting.
http://www.thestar.com/opinion/editorials/2014/04/30/flying_in_the_dark_on_the_f35_stealth_fighter_editorial.html
8 May: Bloomberg: Andrew Frye: Renzi Pushed to Slash F-35 Order as Italy Budget Targeted
The military budget is up for review as policy makers seek resources to cover tax cuts needed to support economic recovery…
http://www.bloomberg.com/news/2014-05-08/renzi-pushed-to-slash-f-35-order-as-italy-budget-targeted.html
finally, on this subject, it is evident the Govt(taxpayers) cannot maintain the welfare budget required once the baby boomers have all retired. but is it true that Kevin Rudd QUALFIES for a lifetime pension/perks of hundreds of thousands of dollars per year, even tho his wife made $140-plus million selling Igneus, which made much of its money from Australian & British Govt contracts?
one area to tighten up, which could pay for the F-35 over its lifetime, with money to spare!
1 May: SMH: Google Australia’s tax bill jumps tenfold
Google Australia’s tax bill has risen more than tenfold to $7.1 million…
Google Australia does not count revenues earned from its search business, which is estimated to generate between $1 to $1.5 billion each year in Australia. For tax purposes, Google’s search business customers get billed in Singapore, not in Australia.
That means its corporate tax bill is a fraction of its overall profit…
Governments worldwide have focused on technology companies – others include Apple and Amazon – for not paying their fair share of tax…
The fact that Google Australia does not account for its search business revenue was recently noted by the OECD’s head of tax Pascal Saint-Amans…
Australian companies are sending billions of dollars offshore to related parties in low-tax nations such as Ireland and Singapore, new Tax Office statistics show.
In December tax office assistant deputy commissioner Michael O’Neill said there were “about 7500 companies with international related party transactions totalling about $270 billion in transactions”.
The latest Tax Office statistics has an updated figure – it shows for the 2011-12 income year there were 7,680 companies. If the interest rate earned by some of these multinationals was the same as the interest rate paid, it would result in an additional $1.8 billion of income, Mr O’Neill said…
http://www.smh.com.au/business/the-economy/google-australias-tax-bill-jumps-tenfold-20140501-37iq1.html
10
If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.
“Democracy is the most vile form of government.”
It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.
James Madison
Should be required reading in every grade from middle school through college.
20
Viewed as a weekend discussion and for the sake of debate
In Australia half of all families get more money from the state than they contribute
What exactly is wrong with that? It sounds ideal.
Ideally everyone in Australia should get back exactly as much as they put in. The cost of government is then zero.
So if the average is half way, that half put in more and half put in less than a break even, it seems quite scientifically fair.
You have to add in the business of indirect or consumption taxes, specifically the GST, a State tax collected federally. Someone earning under $18K pa pays no income tax. That was always the case and Julia cheated, as those under $18K were entitled to a low income rebate anyway, so they never did pay tax. Then Wayne increased taxes above $18K by 25% and actually increased taxation dramatically on most low income earners, a typical Labor scam.
However someone on $18K pa still pays 10% to the government on most of what they spend. They still pay for transport, petrol excise, council rates and a whole host of taxes like car registration, now $700pa. Even Union fees at $700pa to the HSU say. Tax exemption does not help. In fact given that ‘rich’ people do not eat more food, drive further or use the parks and gardens more, the poor pay far more indirect tax as a proportion.
My point is that it is not yet a disastrous entitlement society. The endless fiddling of taxes and exemptions however produces a huge cost for government and thus for us, as the government has no money of its own. What is needed is to extend the tax on spending, the GST and eliminate the 90% of taxes which produce only 10% of government income. The tax debate has not really started. What we do not want are huge stupid taxes like the utterly unfair and disincentive MRRT which cost more to administer than we get. It was always an attempt to get control of resources tax, the exclusive province of the states under the constitution. Under Julia and Wayne, there was a desperate attempt to get control of the Hospital system, the councils, the education system and even the police, all State responsibilities. What they did not do was defence, immigration, customs and foreign exchange, their entire responsibility. It was an awful government and they spent all the savings, even robbing the treasury and attempted to grab the GST too. Don’t even start on the incredibly stupid and destructive Carbon tax, for which no one voted.
We can only hope that tax reform comes soon, but no, the 50% figure sounds right.
21
I am not sure anyone would agree with that statement. Any State needs employees, so they get out more. We need an army, police force and judicial system. Any law-abiding citizen will lose out on these services. Then there are those parts of Government where provision is on need. For instance, if you are fortunate to enjoy good health then you will not receive your fair share of medical services. If you are bright, gain good qualifications and a secure career, then you will lose out to those less bright or fail.
The problem that Australia faces is the net gainers are now in a majority. That means it is very difficult to push through cuts in transfer payments that are not necessary, but will leave large numbers marginally worse off. There is also an incentive for Governments to justify structural deficits, financing current expenditure from future revenues. In the UK, the last Labour Government did just this, making the impact of the recession much worse than if sound financial policies had been pursued.
40
Notorious economist Steve Keen reckons running a permanent government deficit is a fairly good deal compared to other options: Why a permanent budget surplus is a poor fiscal model.
Yeah, it’s based on models, but so is the plan of the Australian National Commission of Audit, and Keen is hardly a newbie at this game.
00
Sure, less the cost of running the system, which means public service salaries largely.
On first viewing, I would agree with you. It looks utterly unfair, as if the poor half are getting a free ride, bludging off the system and paying no tax at all. That was my first response too.
However in that section you have lots of children, retired couples, students and more. These people all pay tax, a lot of tax, state and federal and all the incidentals costs like water, gas, petrol, food. Car registration, $700pa. Tax. Petrol. 90% tax. Water. Long established reticulation and no new dams for 50 years, tax. I doubt those are factored in at a federal level, which I assume is largely income tax.
Then you think what we should do? The wealthier half are often more than happy to over contribute per capita as they know their balance, their disposable income after tax and their cost of living is often much greater. They can afford much more in terms of holidays, private schools, restaurants, good and reliable cars, even prestige homes and cars. Those on the bottom half break even, but do they have any disposable income at all? Often they are flat broke at the end of the week.
People who have less are often aspirational and helping them with education, child costs, housing, health, age care, pensions is not just generosity, it is plain sense. If a war came, they would fight and die just as fast as anyone else. Also some of your best students, best performers in every field can come from this class, often because they have so little but their children work harder.
So I think you can misread this statement. In fact it was meant to be mislead, a politically charged statement. I would be wary of drawing the conclusions everyone was meant to draw. Australia is not such a bad place with such a distorted entitlement culture. We look after everyone and that is fair. Does that mean we are creating a nation dependent on handouts? Partly, but far less than 50%.
00
As for public servants, most states under Coalition governments are privatising as fast as they can. Goodbye public servants.
However two huge public service areas will remain, education and health. Even the expensive private schools are so funded that the government pays most of the teachers’ salaries. Parents pay the rest. So it is reasonable to say that you get back what you put in, even though you could argue that all these people are public servants. The same with public health. However the top half can afford much more with their much higher disposable incomes.
So I still hold that roughly, less the cost of handling the money and such non return areas such as defence, on average you should roughly get out what you put in, less only the cost of administration which should not be onerous. I do not consider the public service should simply be a sinkhole for our money, or a superannuation fund or a council. If you do not get enough services from the government to match the average income from the public, something is wrong.
Take our local council, with an income of $100Million a year. We want most of that back in real services and capital works or we are being ripped off. We do not pay simply to have a council and councillors. We pay for the council to look after our needs as a community with our money and give us a fair return. We want most of the money back as a community, although the people with more expensive houses will pay more. Is that wrong?
00
Kevin,
“if you are fortunate to enjoy good health then you will not receive your fair share of medical services”
Kevin, who is the lucky one here, the one with good health or the one who suffers? Do the poorer half have more health problems?
As a country we train lots of doctors at the public expense. We run huge public hospital systems at the public expense at State level.
In our country, sick people can get free treatment. Yes, those who do not need these services are being ripped off. Those who pay more get only the same service.
I think your point also is that those with more money pay more but get the same benefit, not proportionally more.
I think you have to take the larger view, almost the insurance view. As a nation we agree these basic services are important, even essential for all Australians and collectively we pay for them and the wealthier people pay more than they receive. However as you say, there is an amount of luck in good health and of course there is abuse, attitude, opportunity and even wealth.
My contention still stands though, that overall a system should provide services at a value equivalent to what we put in, over the long term and averaged. Health is hard to value. Yes, people on higher incomes receive proportionally less benefit, but it is not true therefore that they are being robbed. That is the idea put forward and in every way, I have to disagree. In a fair system, roughly half will pay less than the average received and half more.
On your point about the costs of the police, I have to say that traffic fines, parking fines and more are becoming a big part of police funding. Finally, remember that public servants pay tax too.
00
Sigh …
Possibly the most timely link:
POPE URGES ‘LEGITIMATE REDISTRIBUTION’ OF WEALTH
May 9, 2014, VATICAN CITY (AP) — “Pope Francis called Friday for governments to redistribute wealth and benefits to the poor in a new spirit of generosity to help curb the “economy of exclusion” that is taking hold today.
Francis made the appeal during a speech to U.N. Secretary-General Ban Ki-moon and the heads of major U.N. agencies who met in Rome this week.”
~ ~ ~ ~
A reminder:
Quote;
Ottmar Edenhofer was appointed as joint chair of Working Group 3 at the Twenty-Ninth Session of the Intergovernmental Panel on Climate Change (IPCC) in Geneva, Switzerland-
“But one must say clearly that we redistribute de facto the world’s wealth by climate policy.
One has to free oneself from the illusion that international climate policy is environmental policy.”
. . .
20
I don’t want to ‘bash the church’, but, how does a christian resolve this?
Quote:
“Francis called for respect for life “from conception to natural death” and his denunciation of the “culture of death” echoed previous papal exhortations against abortion.”
~ ~ ~
Yet, we have UN/govt. sanctioned murder of innocent people to ‘stop global warming‘:
“Tens of millions of pounds of UK aid money have been spent on a programme that has forcibly sterilised Indian women and men, the Observer has learned.
Many have died as a result of botched operations, while others have been left bleeding and in agony.
A number of pregnant women selected for sterilisation suffered miscarriages and lost their babies.
A working paper published by the UK’s Department for International Development in 2010 cited the need to fight climate change as one of the key reasons for pressing ahead with such programmes.
The document argued that reducing population numbers would cut greenhouse gases …”
. . .
Is it any wonder our society is at this point if the ‘keepers of morals’ also worship at the golden calf of green sustainability?
10
I don’t even care that so many people contribute nothing and are net burdens. I’d put up with that arrangement, if they weren’t so goddamn ungrateful.
My leftoid friends tell me I’m not paying my “fair share.” I point out that I pay as much tax as the rest of my school class put together – they just say I COULD pay even more. I ask how much they believe would be “fair” and they can’t even tell me a number.
Then I lose my health insurance rebate. Even though I pay for the healthcare of just about everyone I know, I should miss out. That’s like them inviting themselves for pizza, telling me I have to buy for everyone because “I can afford it” and THEN eating it all and telling me to f* off. I ask why I, the person who pays for it all, should be the only one to NOT receive the basic expectations of Australian society and they tell me that “we” all need to make sacrifices because “we” can’t afford to pay for everyone.
Then when I put aside enough money to never need the pension (an awful lot of money, because I have a severe and degenerative disability that will force me out of the workforce at some point) they tell me that they need to raid my SMSF as well because there’s so much money in it.
50
Andrew well put and sorry about your health issues, you probably know the old saying,
“Never argue with an idiot, they will only drag you down to their level and beat you with experience.”
I think it fits well with your leftoid friends. 🙂
00
Such is the Morality of Need that places an undeniable claim on those who do not need BECAUSE they are provident and productive. It destroys the ability of the productive to sustain their own lives. The people who hold to this so called morality will likely say, “in that event they will sacrifice someone else to your need.”
What happens when they run out of productive people to sacrifice? It is nothing but a race to the bottom at which time everyone loses, including themselves. Oh, they pretend to themselves that they will be the survivors. By what means will they survive? By eating each other most likely. THIS is the real end of what they call “Social Justice”,
00
Still , is there a reasonable argument against dispensing with Income Tax?
In Godzone , even the majority of those who pay such tax are still getting a tax credit ; it’s called Working for Families.
At least we could reduce the inefficient fiscal churn.
We could remove the perverse incentive that tells people that they are fools to work because you can get more money (from the state) by not working.
00
ALL taxation is theft!
10
breaking news,
So HImalayas melting – nope mostly stable!
Bee Decline – nope
http://acsh.org/2014/02/bee-be…
“Furthermore, according to a 2010 report by the United Nations Environment Programme, except for a dip around 1990, bee colony populations have been steadily rising since 1960″
Polar bears- nope.
Intelligence decline – yes.
I’m afraid so. It’s due to a nasty parasite that infects a certain section of the word’s population. Be aware, some of the many symptoms are a desire to travel, hold useless meetings in hot countries, make everyone else feel guilty about traveling or running big cars. Tell third world countries they cannot use fossil fuels.
The desire to run around in circles shouting denier( this one can be confused with Myxomatosis in rabbits ) more research is needed on this one.
30
Re: “Idiocracy”
10
Why do we allow benefit takers to vote? Are we completely stupid?
41
If I could give you more than one ‘thumbs up’, I would.
00
Economics is just like climate. No one understands it.
00
As for democracy. In the UK UKIP are predicted to get 20% of the 2015 general election vote yet win zero seats in parliament. Is that form of electoral representation sufficienty representative in this day and age ?
If democracy cannot do better than that then utimately democracy is doomed to a violent demise.
http://t.co/W6wtEyh8gw
10
Perhaps it is time for Australia to invade Britain, grind their first-past-the-post tyranny into the mud, and bring to the people of the UK a true democracy with our preferential voting system. They shall greet us as their liberators, honest guv!
The reason Australia introduced it sounds much like the situation you are in.
Mind you, the two major parties are thinking of scrapping the group voting ticket part because it makes it too easy for minor “rebel vote” parties to be elected via preference swaps. The two major parties really prefer to keep a duopoly instead of the heterogeneous political environment that actually represents the public’s dissatisfaction with the duopoly. So you can see the group voting ticket was probably a very good idea.
00
Word I like to use with an ecomomic ring is..’Vendible’. “Your daughter is a very vendible young lady”, as opposed to, “Your daughter is a very insoluble young lady”.
10
A simple start would entail a neutral study of our Constitution and a requirement for the Feds to do only the tasks that were initially allowed for them by the States.
Arguments that this approach does not recognise progess are weak and glib. If they were right, Jo’s article would not need to be written
10
I do not know what the word is.
But for those taking from the public purse to vote on public spending , is a direct conflict of interest.
The Greeks gave us Democracy and Kleptocracy, they probably had a word.
What do we want from government?
At what cost civilization?
To me we have devolved into kleptocracy, in most democratic countries due to voter disinterest and the short sighted greed and stupidity of the parasites.Carefully cultivated voter disinterest
The purpose of government is as a morality play and a blunt instrument of force.
The morality play conspires to convince the citizen of the rewards of civilization, the bait being the greater wealth, enhanced personal security and ability to accumulate goods that separates civil society from tribalism.
The tool of great force is to deter neighbouring societies from benefiting from our labours in a nasty one sided way.
Fools and Bandits are always with us, so rule of law, equality before those laws and a system of enforcement are necessary to guide the intensely shortsighted or emotionally crippled.
Unfortunately not all bandits are fools, so the bureaucracies are awash in bandits, using fools as cover.
Here they act naturally with no repercussions.
As an aside have you ever wondered why the bureaucrats are so stupid? Especially at the political appointee level?
Cause the persons appointing them are bandits.
The Fenn diagram of politicians,Journalists and the publics interests interaction is revealing, the press and pollies live in a tiny bubble of no interest to most of the public.
So lets revive the passion and power of the morality play.. let us view politicians as actors who pled and grovelled for the opportunity to play the required roles, bureaucrats as persons who voluntarily chose to leave the productive side to audition for the secondary roles of promoting civilization.
And reengage the voter by imposing draconian punishments for transgressions of the roles, by ballot.
Treason used to be the ultimate crime.Theft as a trustee, requires a gruesome death,Misappropriation of public funds needs loss of body parts, Lying for personal political gain…death by live rats..
Basically if the purpose of government is to enhance the civic good, all actions of government that destroy society, attack our social fabric must be punished, in the traditions of the morality play.
20
The situation is a natural result of lack a progression of livelihood development when growth is atrociously low- should be at least 10% real growth of goods and services- not assets. The usual suspect come through for failing- high energy costs, a morass of government regulations partially represented by taxes- the numbers mentioned about taxes are incorrect- its like 300 income taxes presented as one tax. Unmentioned is the complete failure of businesses to regulated themselves- a strong independent (of both the businesses and government) smart regulator would have saved some sectors enormous amounts of money. The more you buy something, the less its worth. Totally buying an audit gives a worthless piece of paper.
00
Before we embark on the discussion of where our society should head, there a few books those who are interested could read:
1. A Philosophy for a Fair Society (Drs Miller, Feder and Hudson, published by Shepeard-Walwyn)
2. The Corruption of Economics ( Gaffney and Harrison)
3. Land Tax ( Tideman et al)
4. Social Problems (Henry George) It can be read at schalkenbach’s library or a hard copy purchased from schalkenbach.)
and
5. The Menace of Privilege by Henry George Jr. It’s almost impossible to obtain a printed version but it can be read online at openlibrary.org.
After that lot, we should all have our terms clearly defined and sufficient knowledge to hold a worthy conversation.
00
One phrase…
TYRANNY OF THE MAJORITY!
00
What is the most dangerous competitor to Global Business? What would render a particular company/conglomerate no longer a participant in the system? Those with no real loyalty to their country of origin. Global! Bureaucracy, Consumers, Employees, Activists?, just thinkin out loud with these. You may come with some other ideas.
While we ponder that…. What is the most pressing threat to Politicians/Bureaucrats? Voters? Each Other? Business? What do the bureaucrats need the most? YOU! They need you, to rescue, to negotiate for, to provide for. And what would stop that? Your freedom and liberty. Your ability to look after yourself. Your ability to negotiate disputes to acheive outcomes to your satisfaction. Your ability to look after your own family and community. The closer to this you become? The less you need them to provide anything for you. You need Freedom, Liberty, Education and experience for this to happen. YO no longer “Need” to Vote for anyone to save you and those around you. You’d have it covered!
OK Let me explain a characteristic of the middle class. The middle class is commonly regarded as a social and financial staging post. The poor move into the middle class on their way to independence and the rich crash to the middle class after failure. Lovely. Social and financial mobility! The middle Class also has surplus resources. They can save, raise capital, build businesses, provide assistance for community programs etc. Boy ‘o boy They may even attend church. And that opens a whole new can of “We follow gods laws, not Mans” can of worms.
Back to the first Question. Biggest threat to Big Business? Competition! Where does that come from? The middle class!, Saving money, Raising capital, building businesses! OK We’re getting somewhere? Yeh? The Biggest threat to the bureaucracy? The Middle Class BBBZZZZZzzzzz.
“Hey I’ve got a great idea!?!?!” ” Why don’t we lobby the Bureaucracy for Laws and Regulations that will help society”? “Better still”?… “Why don’t we model the education for what we need, and get the population and young people Job ready”? “Awesome”! “We eliminate all competition right their”! “The buracracy becomes responsible for jobs and we get to educate people that jobs are where it’s at”. “They’ll vote for Jobs”. “What a great idea”!
“Those that trade freedom for security deserve and will receive neither”! … Benjamin Franklin.
BTW. Those blokes knew a thing or two about Liberty and Freedom. 🙂
Where’d the Middle Class go? Voted out of existence! When you’re on your own. In nice quiet surrounding and hear a little creaking? A slight squeak in the distance? That’s the foundations of system moving and struggling to hold up the weight of the current structure! 🙂
00
Can I offer this as a suppliment?
And you think more Government has the solution? Lets see shall we? LMAO…
The number of people murdered by the state!
http://is.gd/b14ZHr
00