We should work out what we want from tax before we decide on how to raise it
“Isn’t this where we should start any discussion of tax ‘reform’; in the real world, asking why we levy taxes in the first place and what we want to buy with them, rather than with a meandering, directionless series of thoughts via 24-hour news grabs?” asked the Guardian’s Lenore Taylor on Friday.
Taylor was referring to the impact of federal funding cuts on state health and education services, which Victoria says will cost it the equivalent of two hospital operating budgets or 10,000 elective surgeries per year. She pointed out that elements in government and the media tend to consider our economic structure in a decontextualised way, focusing on bean-counting and buck-passing rather than what kind of society we ought to build for ourselves and our fellow citizens.
Conservative commentator Mark Fletcher made a similar point in 2013:
Should the amount allocated under the Australian Research Council Amendment Bill 2013 have been higher? For what purpose? What policy outcomes do you want? Is using the ARC the right vehicle for distributing funds? Nope. None of that. There’s only one thing you need to know: the policy is that the amount of money is going to be X.
This approach circumscribes reflective conversations about the point of the state and the outcomes we want it to achieve, and shifts the focus from positive social goals to an endless series of snipes revolving around individuals’ and organisations’ back pockets. It solidifies the concept of the tax burden and encourages people to identify themselves as taxpayers, ensuring that the ball on which we keep our eye is how much those clowns down in Canberra are fleecing from our pay packets. Treasurer Scott Morrison gave a talented performance of this artform last week when he referred to income tax as the “silent tax”,
apparently having become deafened to the steady beat of bracket-creep-bracket-creep-bracket-creep that accompanies every mention of our progressive framework.
The reason why we all contribute is left a dangling referent, as is the reality that tax revenue builds the very economic institutions that allow (some of) us to go out and make money in the first place.
The Australian’s Judith Sloan, reporting live from Taxpayer Land this morning, voices the sort of complaint we can all look forward to hearing more of in months to come if the Turnbull government pursues any kind of economic reform agenda:
When bureaucrats, academics and representatives of welfare organisations talk about a tax being made fit for purpose, their intention is almost always the same: to increase the tax burden on high-income earners and those with accumulated wealth.
Here, Sloan confuses means with ends. I have never heard anyone, whether bureaucrat, academic or welfare advocate, argue for tax increases on the wealthy as a worthy goal in itself. The tax office does not have a toilet block out the back that it uses to flush our hard-earned straight down the dunny. In the case of welfare organisations, their intention is written on the tin: to increase welfare. If they could do that without having to engage in constant public tussles over their meagre funding, I imagine they would jump at the chance.
Sloan’s own preferred end is apparently to support upward wealth redistribution by maintaining our regressive superannuation tax concession structure:
[The] fit for purpose tax will always hit middle-income earners and those with some wealth. These are hardworking individuals who often have lived relatively frugal lives; many have the objective of leaving something to their children.
Rather than providing an argument for why “those with some wealth” should be permitted to pass it on to their offspring at the expense of providing concessional relief to low income earners, Sloan simply drops the phrase “hardworking individuals” and moves on. Later she reveals that her middle-income earners are people in the $80,000–$180,000 range, an odd categorisation given that an individual income of $180,000 placed you in the top 5% of income earners in 2012. She may have been taking her cues from the treasurer, who said the same thing recently despite the median pre-tax full-time work earnings being $57,400 in August 2011.
It’s not just Sloan et al. using this bereft style of analysis. Labor’s inability to articulate a coherent set of societal goals is one of the primary reasons for its institutional decay. Sloan realises an essential truth here that Labor does not: short-sighted emphasis on economic instrumentalism at the expense of articulating qualitative aims will always tend to compound existing advantage. It is a rigged mode of argument designed to insulate inequality and exploitation from moral judgement.
Progressive change requires a program that centres the things rationalist assessments seek to hide: the collective goods of co-operation in service of justice and fairness. The power of these concepts is not lost, even though for the most part they are deployed cynically in our political arena. The lengths to which some will go to avoid measuring their policy preferences against these demands is proof enough of that.
- Malcolm Turnbull insists that any increase to the GST will not harm the poor. Some Coalition backbenchers are not happy.
- Extra police were sent to Christmas Island to quell the riots.
- At a UN human rights forum, countries from Sweden to North Korea gave Australia some free advice on how to clean up its act.
- The TPP may leave Australia open to legal action by foreign companies.
- Labor has rejected government cuts to family payments, which means the Coalition will need cross-bench support in the senate to pass the legislation.