Gavonomics — Tuesday, January 15, 2008:
Mark my words, Mr Rudd
[Letter to the Hon. Kevin Rudd et al., sent Jan.15, 2008; posted here Mar.10, 2008.]
Dear Prime Minister,
As one of your local constituents, I would congratulate you on your recent promotion if I were convinced that you had anything to celebrate. But I am not yet convinced. It is clear that the Opposition expects the global economic environment to turn malignant on your watch; witness Peter Costello's warning of a "tsunami". It is also clear that the Opposition is gearing up to blame your administration for the impact of global conditions on Australia; witness the former government's claim that your IR policies would cause the next recession.
With a view to protecting Australia from the expected global events, I have written "Raising Australia's Market Share" at http://grputland.com/plans/rams.htm . Although the article is available to the public and refers to you in the third person, it is mainly intended to be read by you. It amounts to a budget submission, proposing reforms that would:
* overcome capacity constraints due to unaffordable housing,
* stop payroll taxes, superannuation contributions and tax-related compliance costs from feeding into prices of exports and from discriminating against local products relative to imports, and
* comply with election promises and other political imperatives.
In deference to the last-mentioned requirement, my submission stops short of calling for a direct tax on land values. Such reticence would not have impressed your predecessor Andrew Fisher, let alone the celebrated statesman and jurist after whom your electorate is named (see http://grputland.com/classics/griffith.htm).
But mark my words: If you do not find some ways to imitate Fisher and Griffith, you will end up imitating Edward Gough Whitlam in being swept out of office by the economic tide, in which case I will not be at all surprised if a million of your fellow Australians lose their jobs before you lose yours. For their sake I commend to your attention "Raising Australia's Market Share" (http://grputland.com/plans/rams.htm), of which the table of contents is appended.
Yours sincerely,
Dr. Gavin R. Putland...
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CONTENTS
1. Defining the problem
1.1 Unaffordable housing hurts efficiency
1.2 Payroll tax: Discriminating against local products
1.3 Superannuation: The payroll tax that dare not speak its name
1.4 Compliance costs: Taxation without revenue
1.5 Income tax: The biggest reverse-tariff of all
1.6 Incentive traps and poverty traps
2. Components of a solution
2.1 A minimum deemed income from property
2.2 Reinventing the first home owners' grant
2.3 Owner-occupants vs. investors
2.4 A further note on negative gearing
2.5 Ending payroll tax and VFI
2.6 Keeping the GST rate below 10%
2.7 Cutting compliance costs: Make the GST a retail tax
2.8 Mythical advantages of input credits
2.9 Taking superannuation out of export prices
2.10 Inferior option: Dumping PAYE compliance costs on the banks
2.11 Superior option: Getting rid of income tax
3. Constitutional threats to existing taxes
3.1 Are compliance costs unconstitutional?
3.2 Are stamp duties on new vehicles unconstitutional?
3.3 Is payroll tax an excise?
4. Q&A
4.1 How would the minimum deemed income (MDI) affect rents?
4.2 Is the MDI a land tax?
4.3 Is this a "beggar my neighbour" strategy?
5. Conclusion
6. Revision history
Copyright © Gavin R. Putland except as otherwise attributed. Posted at Gavonomics under the title Mark my words, Mr Rudd. You may republish this item verbatim on your website or blog provided that you include this notice (with hyperlinks).
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