Wednesday, 22 April 2015

"Labor to propose superannuation

tax hikes for the wealthy" screams the headline. 
Yes, you know that ever popular "hit the rich" line. It seems to be the only way the Australian Labor Party can come up with trying to "save" money. 
Now please don't misunderstand me. I believe everyone should pay their fair share of tax. I also believe that "fairness" means some people will pay more than others. 
But there reaches a point at which "the rich will have to pay" ceases to be sensible. I have always believed that one of the reasons old fashioned "Communism" didn't work was because of the idea (rather than the reality) that people should be paid equal amounts for doing unequal amounts of work or for taking unequal amounts of responsibility. 
Why should a heart surgeon only take home the same amount as the person who drives the rubbish truck or the teacher take home the same amount as the person who works at the supermarket checkout?
The surgeon and the teacher work much longer hours. The surgeon literally has a life in his/her hands. It is an enormous responsibility. The teacher has lives in his/her hands too - the future of the country.The general belief is that they should be paid more. 
There is also a general belief they will pay more tax if they are paid more. The tax on money put into superannuation is lower of course. It should be. It encourages people to save for the future. It saves the government money in the future. It makes investments funds available. Where's the incentive to put money into superannuation if, in the end, you end up paying just as much - or potentially even more - tax?
Labor's argument is that "only the rich" will pay because there will be a point at which this extra tax cuts in. They say it will bring in "only $14bn over ten years". When any political party starts to talk in those terms I start to think of the measure they are describing as a populist measure designed to win votes rather than do any actual good.
If Labor really wanted to do economic good they would propose raising the GST and compensating the lower paid and pensioners for that rise. It would, in the end, bring in more. It is something that everyone has to pay. People would continue to contribute to their future needs through superannuation.
It makes more sense to me but no doubt some reader of this will be able to explain why I am wrong. 


jeanfromcornwall said...

The thing that gets me is that the makers of rules and the folk who say "good idea - soak the rich" is that they never seem to clock that the rich are comparatively few in number. If what is taken from the rich were to be evenly distributed among the poor, the poor would be hardly any better off - but think of all those lovely bureaucrats that would be needed.

catdownunder said...

oh yes, the employment opportunities are endless - that should soak up most of the extra income!