Problems Arise When Principles are Broken
Most of us move through life without needing to pay attention to the core principles upon which we operate.
Principles are usually so widely respected in society that we don’t discuss them often, but do react passionately when they are disrespected or violated.
These transgressions are what populate the pages of newspapers, and there have been some shocking cases lately, including a baby in Brisbane deliberately scalded with hot water by a stranger.
Our society has been built on laws designed to punish those that transgress core principles like the right to life, liberty and personal property.
The idea is that the penalties serve as a deterrent for those tempted to commit the crime, and as a means of exacting some justice if the crime is committed and preventing further transgressions.
Clearly, it does not always work that way.
Some reformers have amended laws to remove deterrents or to create new offences.
Unfair Taxation
It may seem unrelated, but there is a core principle of fairness in economics that is not observed in Australia.
It relates to equity in our income taxation policy.
What is worse, the principle of fairness or equity is observed for the wealthier Australians using family trusts, but not to mums and dads just scraping by.
It goes something like this.
Income tax should be applied equally to everyone, but moderated in a way that reflects a person’s ability to pay the tax (e.g. progressive tax brackets and tax-free thresholds).
It should also be applied after considering who, in reality, depends on the income – in other words, as in family trust law, applied after distribution to the family members.
Yet in Australia, with our PAYG income tax policy, mums and dads are taxed with absolutely no consideration of how many family members are relying on that income.
So, a single worker with no dependents is taxed the same way as a mother of three children.
That is not fair. It breaks the principle.
The consequences are far-reaching.
As a result of all this, we have a huge wasteful system of churn.
We have a department whose job it is to recognise some of this unfairness, make calculations and send some of this money back to the family as “family tax benefits” with a list of conditions like “no jab, no pay”.
And we have millions of families who eventually get the message that they need the government just to get by.
Double Standards
I recall former Federal Treasurer, the Hon. Joe Hockey, saying we need to “end the age of entitlement”.
A perfect place to start would be to stop the practice of taxing (without a fair calculation) a good chunk of a family’s income before it has reached the family table.
Meanwhile, our Ministers and Treasury officials, and our wealthier business owners, are highly likely to be using family trusts to avoid some of this unfairness.
This is blatant hypocrisy.
This needs to stop.
The Movement has done a lot in this space, and we want to do more going forward.
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Republished with thanks to News Weekly.
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Far too many layers of taxation. Far too much bureaucracy and Red Tape. I remember the days when only Council staff received remuneration. Wasteful government which needs more and more complex rules to enable it to fleece people. Time to sack the lot !
Income tax should be per family, not per individual.