From: c.oneill@trl.oz.au (Chris O'Neill)
Subject: Re: Vic Ministers Get $20,000 pay rise.
Organization: Telecom Australia Research Laboratories, Melbourne, Australia
Date: Thu, 5 Nov 1992 06:33:35 GMT

In article <1992Nov4.232430.6955@monu6.cc.monash.edu.au>
suter@fawlty8.eng.monash.edu.au (Mr D. Suter) writes:
>In article <1992Nov4.010133.19002@trl.oz.au> c.oneill@trl.oz.au (Chris
O'Neill) writes:
>>In article <1992Nov2.215018.10125@monu6.cc.monash.edu.au>
>>suter@fawlty8.eng.monash.edu.au (Mr D. Suter) writes:
>>>In article <1992Nov2.061237.10509@trl.oz.au> c.oneill@trl.oz.au (Chris
>>O'Neill) writes:
>>>>In article <1992Nov2.030323.4997@monu6.cc.monash.edu.au>
>>>>suter@fawlty8.eng.monash.edu.au (Mr D. Suter) writes:
>>>>>In article <1992Nov2.002752.2292@trl.oz.au> c.oneill@trl.oz.au (Chris
>>O'Neill)
>>>>writes:
>>>>>>In article <1992Nov1.032511.27302@monu6.cc.monash.edu.au>
>>>>>>suter@fawlty8.eng.monash.edu.au (Mr D. Suter) writes:
>>>>>>
>>>>>>>There are plenty of other
>>>>>>>govt charges that are "progressive"
>>>>>>
>>>>>>Name a State Government tax that is progressive apart from stamp duty on
>>>>>>transfer of title.
>>>>>Do you count transfer of title to real estate and of motor vehicles
>>>>>as one or two?
>>>>
>>>>Can you explain how the stamp duty on transfer of motor vehicle title is
>>>>progressive.
>>>Last time I bought a motor vehicle you had to pay a % of the value of
>>>the vehicle to the State govt. On the basis that richer people buy
>>>more expensive cars - this is "progressive". 
>>
>>You need some education.  This is not progressive.  This is neutral. 
>>Progressive means the taxation percentage increases as the amount taxed
>>increases, as is the case with income tax.
>You need some education. 

>Things are usually not entirely one or the other.

What's that got to do with the definitions of progressive, neutral and
regressive.

>"regressive" .........................................."progressive"
>                               ^
>                               |
>                               |
>                             neutral
>                      (flat cost per car regardless of value)
>                                       ^
>                                       |
>                                       |
>                                       |
>                                  amount you pay depends on
>                                  value of car

Why don't you read an encyclopaedia?  Progressive means the taxation percentage
increases with the amount taxed.  Neutral means the taxation percentage is
independent of the amount taxed.  Regressive means the taxation percentage
decreases with the amount taxed.

>>>I'd also put the
>>>FID/bank charges in this category - the more money you have the more
>>>you contribute to the state coffers.
>>
>>As I explained above, FID is neutral with respect to the amount taxed.
>Rubbish - see above. 

Rubbish to you too - see above yourself.

>>>>>In any case you are fighting a side battle. 
>>>>>I'll ammend the plenty
>>>>>of other to "some" if it makes you happier. 
>>>>>
>>>>>The point is that
>>>>>there are others that raise a significant amount of money. 
>>>>
>>>>What are they?  There is land tax but do these progressive taxes raise a
>>>>significant amount of money compared with other taxes such as payroll tax
>>which
>>>>is not progressive.
>>>Payroll tax not progressive? Don't larger and "wealthier" businesses
>>>pay more payroll tax?
>>
>>Payroll tax is neutral as above.
>Again wrong. 

Please try to read an encyclopaedia.

>>>>Also, as I recall, transfer of title on real estate is not particularly
>>>>progessive (compared with income tax).  You still have to pay a subtantial
>>rate
>>>>on houses much cheaper than average.
>>>Gee you are working hard to get out of this one. I'd like to have the
>>>tax on the purchase of a toorak mansion any day. Just send me the cheque
>>>please.
>>
>>Stamp duty on a really cheap house: 2%.  On a better than average house: 2%. 
>>On a Toorak mansion 3.5%.
>>
>>Progressive at the top but not at the low end.
>Whenever you have a "stepped" rate you can always find a low end
>that is not progressive according to your definition. Again, 
>regressive-progressive is a spectrum not an either or. You'd scream
>murder if it really was neutral (i.e. flat charge per house).

Regressive actually.

>>>>>In other words
>>>>>the present tax system includes both "progressive" and "fixed rate".
>>>>>The point you were trying to make is that the Kennet govt is mean and
>>>>>nasty for imposing a "non-progressive" tax. 
>>>>
>>>>They introduced as tax which, in principle at least, is the most regressive
>>>>type of tax that could practically be introduced.
>>>But a relatively small one. 
>>
>>Relatively small to everyone?
>Nothing is relatively small to eveyone - except 0.

Relatively small depends on what it is being compared with.  Something doesn't
have to be zero to relatively small.

>>>And certainly not the MOST regressive.
>>
>>Name a more regressive tax.
>Pyramid and other state govt petrol tax. Even those who
>can't afford to buy a house pay this and there are NO exemptions
>for hardship and NO deferred payments.

To reiterate, the $100 per house tax is more regressive than any tax that
decreases with decreasing income, however slightly.  If you are poor
then you would try to reduce your petrol consumption on non-essential
activities, thus reducing your tax.  Hence a petrol tax is less regressive than
a fixed house tax.

>>>$100 even to renters is probabaly more regressive.
>>
>>Not clear what you mean by this.
>The present $100 tax does not apply to those that are not
>owners. It's pretty clear really.

It's just your language that wasn't clear.  And yes, renters don't have to
worry, they're taken care of by the landlords benevolent society.  But besides
that, there are a lot of people not well off (old age pensioners in particular)
who own their own homes.

>>>>>If I concede as above
>>>>>then it raises the question why you didn't vilify the Kirner govt
>>>>>for maintaining the predominantly non-progressive base whilst
>>>>>you do attack Kennet?
>>>>
>>>>The Kirner Government, like all State Governments, was wrong for
maintaining
>>>>the predominantly non-progressive tax base but unfortunately, Australians
are
>>>>not going to snap out of their belief in State Governments or the way of
>>>>financing them.
>>>And people like you are going to excuse them if they are "socialist"
>>
>>Thanks for the presumption.  I can do without it.
>>
>>>and cry bloody murder if it's a Lib govt.
>>>
>>>>The point is that a $100 per household tax is more regressive than the
usual
>>>>type of state tax.  A petrol tax is not as regressive because the amount of
>>tax
>>>>is proportional to the amount of money you spend on petrol.  At least with
a
>>>>petrol tax you can try to minimise your tax by minimising your expenditure
or
>>>>if you are really poor you could avoid buying petrol altogether.  What do
you
>>>>have to do to avoid paying $100 per household?
>>>Sell up and rent. 
>>
>>Rentiers must be generous (in not passing on any of this $100).  Doesn't
sound
>>like the same people who were involved in the hue and cry over negative
>>gearing.
>If you run this line then ANY tax gets passed on. In the present
>rental market the forces that can be applied to pass on anything
>are minimal. Vacancies are near record.

What are rentiers doing it for?  Present conditions might cause some rigidity
but sooner or later normal market forces will come to bear.

>>>Not particularly attractive but probably as attractive
>>>to some as selling the car - after all you sometimes need a car to 
>>>to get to work. You can't so easily claim the the petrol tax is
>>>less regressive. 
>>
>>See above for the definition of progressive and neutral taxation.  Regressive
>>taxation means the percentage increases as the income decreases.  If the tax
is
>           ^^^^^^^^^^^^^^^^^percentage is a term that needs to be
>qualified as percentage of what. When you move from percentage
>of income to apply it to another area you have to decide
>upon your metric. 

The basic point is that a fixed amount of dollars tax is going to be
regressive.  That's all there is to it.  The only thing that could be more
regressive (for a given amount of total revenue) is a tax that increases the
poorer you are.  Percentage taxes on goods, such as petrol, would normally show
some correlation between expenditure and how well off the consumer is, at least
in some income ranges, so these taxes are not as regressive as a fixed amount. 
They would probably still be regressive to some degree however, but that is the
nature of the taxes that state governments collect.

>>a fixed amount regardless of income then the percentage is inversely
>>proportional to income.  This tax is more regressive than any tax that
>>decreases with decreasing income, however slightly.  If you are really poor
>>then you would try to reduce your petrol consumption on non-essential
>>activities, thus reducing your tax.  Hence a petrol tax is less regressive
than
>>a fixed house tax.
>Even if you do you can still end up paying a very significant amount
>just getting to and from work. You can completely escape the $100
>tax by either 1) applying for exemption due to hardship 

We'll see what it takes to qualify for this.  Slightly amusing when some
pensioners telephoned Stockdale's office to find out what were the requirements
for exemption.  They were told to write a letter to Stockdale explaining the
difficulty of their circumstances.  The joke's on them unfortunately.

>(has that been allowed for petrol tax?) 

Tell me what the Liberal Party would have done with Pyramid.

>2) sell and rent pr 

from your benevolent neighbourhood landlord

>you can 3) ask for deferred payments (done that with 
>petrol tax lately chris?).

Are you going to get your house tax deferred?

>>>Even renters generally drive a car! By my estimates
>>>(based ONLY on the 3c pyramid levy - NOT on the other state govt
>>>tax on petrol) man very poor people are paying $33 or more (some
>>significantly)
>>>on this tax alone.
>>>>
>>>>>Let's not nit pick huh?
>>>>
>>>>It's not really significant that $100 a year is a nit to your finances.
>>>Huh? Does this make sense? $100 is not a nit in my finances 
>>
>>The point is $100 a year is far less of a nit to not so well-off people than
to
>>well-off people.
>And so is the 3c a litre.

But not as much (relative to total revenue generated). i.e. $100 per house is a
more regressive tax.

>>>but it is far less than the $40k I owe thanks to Kirner et al. 
>>
>>and Thompson and Hamer and Bolte...
>ok if it makes you happy. Let's say 25k to Kirner Cain
>and $5k left over from Thompson.

Where do you get that from?  Have you adjusted it for inflation, interest, i.e.
Thompson left us with some debt.  That debt has attracted interest since then.

>>It wasn't the Labour Government who started the State public service
>>superannuation scheme or the way of financing it.
>But then they should have fixed it when it became obvious it wasn't working.

So how was it obvious that it wasn't working during the time of the Labour
government but not obvious during the time of the previous government?

>>>BTW you'll be pleased to know that just to try to salvage the present
>>>situation to one where our CURRENT expenditure is balanced we're borrowing
>>>another $1k per tax payer - and you grumble about paying $100 back!
>>>Jesus, some people don't like facing up to THEIR debts.
>>>Oh but I forgot, we're not supposed to do anything about our debt
>>>because it might hurt people - we should just settle for another 10years
>>>of sticking our head in the sand and feeling good about out "social
>>>conscience". 
>>>The bottom line is that even by relatively extreme views on the
>>>"progressive" way our tax burden should be shouldered the
>>>portion owed by those who are at least rich enough to be buying
>>>a house must far exceed $100. It's not grossly unfair to
>>>expect those to pay up this amount 
>>
>>So why have such an unjustifiable tax if it's so small.
>>
>>>(even though, as I've agreed,
>>>they could have chosen a better way). In the general scheme
>>>of things, including Pyramid petrol tax, duty on bank transactions,
>>>etc, it's not a massive attack on the poor (the VERY poor don't
>>>own a house
>>
>>That's right, they have generous landlords.
>>
>>>) that you and others are trying to make it look like.
>>
>>So where do you draw the line?
>>
>>I saw Stockdale's letter in The Age yesterday about how it was so difficult
to
>>calculate a fair tax on houses because different councils used different
>>methods for calculating the rates.  Talk about not seeing the forest for the
>>trees, even a fixed percentage of rates would have been fairer than $100 per
>>house.
>Agreed. But it would still hit the poor old retiree who managed to
>put his money to better use (save and buy a relatively expensive house)
>more than one that frittered most of their money away and now have
>become a burden to all.

In spite of the fact that this is pure Liberal party propaganda, I will go to
the trouble of pointing out the flaws in the argument.  First, "poor old
retiree" is not so poor if he has a relatively expensive house.  Also, the
government can still apply its hardship provisions if they are needed in such
circumstances.  Second, the Liberal party view is that those "who are a burden
to all" should have that burden minimized by whatever means available, fair or
foul.

You seem to think it's OK to pay tax on things that "fritter money away" but
not on relatively expensive houses.  By the way, one of the (few) good things
about a GST is that it puts a tax on building materials and the work required
for building.  This gets some tax revenue out of high valued houses (when they
are built), but unfortunately, nothing out of the value of the land.

> You never get something fair to all. 

So that's the justification for choosing something much less fair than other
alternatives.

>All I am saying is that your reaction is over the top.

Just like the letters to the newspapers.

What reaction?  Just saying that this tax is evidence that the Liberal party is
usually only fair to the rich?

Chris O'Neill
Newsgroups: aus.politics