5 May 2008

What else could the government tax?

| cranky
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Local ACT government has always had a miniscule revenue base to finance the running of the Territory. We don’t have the industry,mining or agriculture bases of the states, and are unable to levy payroll tax on the Federal Government.

As a result, property is taxed to the hilt, with a range of innovative taxes and levy’s dreamt up by the council to claw as much as possible from the citizens of the Territory.

Are we adequately recompensed by the Feds for the lack of payroll tax? Is our tiny taxable base recognised and additional funds on a per head basis delivered by the Federal tax carve-up?

The overwhelming reliance on property and related taxation by the Council has resulted in sky high property prices, rents, and a sordid relationship with developers resulting in the ticky-tacky boxes of Gungahlin.

Are there income streams the Council could persue to widen the take, and reduce the reliance on property?

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True – but how much fun would that have been?

The most apt and short description for the previous series of comments I have ever read is:

Raise the value of energy and tax pollution.

I’m not a revhead so it’s a genuine question – what sort of cars (ie makes & models) are priced over $57000 that you would *not* consider to be luxury vehicles?

Someone on 666 this morning referred to “people movers” but to my knowledge those of my friends with vehicles in that category would not have spent that sort of money on them.

Minime2 – I think the line might be that, if you make cars over a certain price significantly more expensive, people at the margins (who might have been thinking about getting into or staying in the luxury market) will move their aspirations down and increase demand at the lower levels. The other possible effects are that the change may cause some buyers of seriously pricy cars to go down a step, increasing demand at that level and making the just-into-luxury group more expensive because of demand, and that some manufacturers/retailers will saw a few bits off the standard to keep the car below the luxury threshold and/or increase the cost of service and parts to recover downstream the forgone profit on the original sale.

Privately, I’d like to see tax penalties on anything that’s wasteful (like urban 4WDs) and imported (like most upmarket cars, fashion items and some poncy foods) and certainly if it’s both. The knock on effects might be hard to think through, though – the worst being that it would license crappy Oz industry to keep producing expensive crap.

minime2 said :

But not being very ekonnomically minded; can some explain how a 33% proposed tax on luxury cars over $57K can force the price up of ALL cars?

Without getting into ANY detail at all, the price of luxury cars is linked to the price of standard vehicles. It has been mathematically and statistically proven – I’d suggest google if you want to know more.

The nett result is if luxury vehicles price increases, the price of standard vehicles raises accordingly.

Ant; only Charnie families.

But not being very ekonnomically minded; can some explain how a 33% proposed tax on luxury cars over $57K (mmmm – there is a whole bloggy post) can force the price up of ALL cars? Tax By Fed Labor and claim by Ex-Fed Liberal today.

The most environmentally-unfriendly thing we currently have is… families. Tax them.

Turbodewd – I get what you are trying to do (though I think it’s pretty stupid) – but why not just increase the rego for sports cars? Under this proposal, a widow driving a Micra pays more rego than if she drives a Rolls Royce. That’s not just pointless, itr’s actively counterproductive.

Not having a family is often not a matter of choice – but having a family always is. People don’t deserve praise, or additional benefits, for making a lifestyle decision to create small copies of themselves. Nobody breeds through altruism (if they did it would be extraordinarily arrogant, to assume the world would be a better place with more of your DNA in it); they do so because they think it will enhance their lives. If I have to subsidise their lifestyle choices, then they should subsidise mine – say nifty little convertible to run about in.

needlenose,

in my opinion any tax should be family friendly or neutral and environmentally friendly or neutral.

There are countless small cars just as fuel effic as yours which are 4-door such as the Mazda 2 or Toyota Yaris both with 1.5L engines. My proposal catches sportscars you see.
I have no problem with singles subsidising families.

My proposal only affects rego and is quite minor, so I put it to you that while you are single you shouldnt enjoy a relative discount to families.

@ Turbodewd – isn’t that just a tax on being single? And in fact it would merely target more responsible single people who drive smaller cars?

I’m single and drive a two-door 1.6 litre car that runs on the proverbial smell of an oily rag. It does have four seats and I often give a friend a lift to work.

My next-door neighbour is also single, but drives a four door V8. A few doors further down the street is another single woman who drives a 4WD (and does not drive it off-road). The couple (“working family”) on the other side have two four-door sedans, and each drives one, separately.

I would argue that out of all these pretty typical examples, my car is the most environmentally responsible. I can also point out that I chose it in preference to a much larger car (a 4 door V8) which my employer would have paid for.

All your proposed tax would do is provide an incentive for someone like me to upgrade to a bigger car than I need. Makes no sense.

@ Minime2 – I confess that I have no rational basis for my proposal to tax windscreen washers. Apart from the nice one on Mugga Way/Hindmarsh Drive, they mainly seem pretty feral, and they scare me, and I hate them. The one on the corner of Northbourne and Baarry Drive gives me the jeebies to he extent that I turn of Northbourne a few blocks early and drive down Mort Street and back on to Northbourne, just to avoid him. I do not claim that this is rational, or does me any credit. But there it is.

Info for needlenose .. those fulltime window washers – who do put in a full day – have all been “contracted” with centrelink; so they are not completely double-dipping. But they do double-dip their squeegee thingy soo I do not let them do mine.

Yep – tax the huge 4WD.

It could be the rude driver tax.

Needlenose,

2-door vehicles are principally cars driven by one person. They include coupes, sportscars and runabouts driven by singles. By comparison a 4-door vehicle is greener as they more often carry more than 1 passenger and can carry families too. It is very
rare to find a 2-door car used principally by a family unit.

What’s your beef with 2-door vehicles? They’re usually smaller and greener than most cars.

What we should be taxing are bloody 4WDs, especially those belonging to people who don’t live on dirt roads or spend their leisure time off-roading.

I would start with a slight tweak of Stamp Duty on new cars. Any 2-door motor vehicle can pay an extra 0.5% SD on the existing rates. And any vehicle weighing 1750kg or more too.

Minime has given me another idea – a $100 000 per annum license fee for those fricken windscreen washers and their filthy squeegees. God I loathe those bastards. Except for the sane, polite one on the corner of Mugga Way and Hindmarsh Drive, who wears a sensible reflective vest and sells cheap soft drinks out of a bucket of ice in summer, and doesn’t hassle you.

And the license fee goes up 10% for every visible piercing.

re the taxes on all those traffic offences … trouble there is that if we all STOPPED committing them, the budget would rollover and die. They really WANT us to keep trying to kill each other and ourselves or they cannot balance the bludget.

Kind of like the higher GST thing … we all pay the same as we all have to buy.

Black market economy … you mean my motor mechanics two sets of receipts books (I need a recfeipt for “service history”) but don’t have to pay the GST portion. Then that is only good for some people otherwise the business would be seen as having NO income. Ever tried paying a carpet cleaner in other than cash?

On the very serious side of this chatline: toll roads have to have had a mention at some Stanhope meeting by now….! Can just see it: “Yes, we will dual lane the GDE toll road”. That will bank Northbourne up to the border pretty quick. Can picture window washers at the Antill Street roundabout.

How is bartering and the black market economy going to be taxed? Should the illicit be made legal and captured by tax regime? Shouldn’t have to much of an effect on the break and enters or mental and general health services considering the legal consumption already impacting on burdened taxpayers…

Skidbladnir, Stanhope’s already introduced a poll tax in the ACT: it’s called the fire and emergency services tax and it’s imposed on all houses in Canberra. A economics guy I was talking to a few months ago [ACIL? Access?] said as far as he knew, no government anywhere in the world had introduced this kind of tax since Margaret Thatcher.

Onya Jon!!

But, yeah, the local council should do something about tax on property and work to broaden the tax base. What are they going to do when the property market goes south after federal government cut backs and continuing rate rises?

Looking forward to seeing a plan!!

Perhaps, in an incremental move, we could try to discover why so many high tech businesses are locating over the border? The objective – to entice them and similar businesses back within the ACT economy.

Are we providing such poor incentives that these firms are driven to QBN?

Non of them are mega-employers, but every bit helps.

Tax whinging

I’ve said it before and I’ll say it again: annex Yass and its surrounds and make the Hume Highway a toll road west of the Barton Highway turnoff. That’ll teach ’em to try and go around us…

Thumper – it’s pretty complex, although I have been told we lose. We send relatively few seriously sick people to NSW and a few ACT people get sick while in NSW and wind up imn hospital, but they’re usually not complicated. We get the return trade (NSW people getting not terribly sick here) but we also deal with a high proportion of the southern NSW people who can’t be handled in Qbn, Yass, Cooma, whatever.

And there’s schools. Very few ACT kids go to NSW schools (other than a few toffy-nosed boarders who go to private schools) but slabs of kids come into Canberrra everyday to use the schools, both public and private, here. I have a recollection of some NSW people getting antsy because Lyneham High made the outrageous choice of taking locals ahead of NSW folk. So that one’s not knock for knock. Nor is UC.

The ACT also gets messed around a bit because, whatever mineral wealth is locked up in the large part of the ACT that is national park, we can’t get at it. In NSW, most of the mineral exploitation was underway well before parks were thought about.

Sensibly, an individual jurisdiction can’t tax any thing or activity that can be moved, or people and businesses will just go to another state or overseas. Something immobile, easy to calculate and simple to collect is needed.

It would be tempting to tax everything I don’t like … hoon cars, swilltrough pubs, smokers who think the world is their ashtray, litterers, people who leave shopping trolleys loose in carparks, airhead fashion retailers, people who show neither manners nor sense on the road, people who make unnecessary loud noises, people who don’t wash their hands after visiting the toilet, nimbies, morons who won’t get their children immunised, people who neither get it nor get over it (whatever “it” may be), rugby league. New, policy-free political parties. That would be a start.

Needlenose et al are right – we should be reaching a proper balance with NSW about the free services on both sides, because it is really annoying to subsidise people who read the Terror and think Alan Jones is pretty cool. And I think that we need to be brave with deciding some services should no longer be free – we did it with carparks, so why not schools and the use of hospital emergency as a free GP?

How about toll booths on all roads coming into Canberra? We would charge higher toll for heavy (non-environmentally friendly) vehicles, and even higher charges for ambulances carrying non-ACT residents.

Growling Ferret1:28 pm 05 May 08

How about a tax on anyone who lives in Shelbyville and works in Canberra.

The ‘Struggletown Tax’ – $5 a day from the yellow number plate brigade giving thanks to the people of Canberra for the opportunity to have a job, not live a life as a dole budger, hobo or crack whore like other Queanbeyanites.

You know it makes sense 😉

Actually what we need is a way of recovering expenditure on NSW residents who pay no tax here in the ACT. Something like 30 per cent of patients at Canberra Hospital are actually from NSW. No wonder it struggles when its funding base doesn’t include them.

God, imagine the revenue they could raise if they fined people who drove below the speed limit in the right-hand lane without overtaking.

Or who didn’t signal when changing lanes. Or didn’t signal when changing lanes WHILE GOING AROUND A ROUNDABOUT.

Or who stopped 10 metres from a red light, thus ensuring the sensors could not pick up their car, or any of the dozens of cars behind them?

Or who decide to leave 10 metres between them and the car in front at the red light, thus preventing 20 people from being able to access the slip lane?

Or who drive into congested intersections in peak hour, thus ensuring that everyone else has to wait two changes of lights before being able to progress?

No, wait, stop, the possibilities are making me dizzy…

Maelinar said:

Mælinar said :

Notwithstanding, it seems prudent that internal efficiencies – finding methods of making their money travel further, and eliminating cash sinks – is a more appropriate method of ensuring tax dollars are wisely spent. Nobody needs it more than this Government – I only need to point to the GDE artwork, Al Grasby statues, the london bombing memorial, Siev X memorial, Aboretum II, and so on. There’s more WTF on this Government’s activities than a blog about black amputee hardcore toilet handjob porn.

Exactly. The money is coming in, they don’t need “new” taxes, what they need to do is be sensible about what they’ve got, and what their job is about. There’s no point in having icing, when the cake’s a battered heap. Get the cake right, and leave the frills to local business, groups of motivated locals; maybe in future there’ll be some excess to get fancy with. But while the basics aren’t right, it’s downright irritating to see them frittering money away on unneccessary things.

Turn the feeder streets into the triangle into toll roads.

On a serious note, I disagree that the rich should pay more, by single virtue of them having more money – it sounds plainly dumb, and gives them incentive to haven off their money. Why should they pay more for the support of a welfare state ?

If the taxation system were more equitable – for instance EVERY person paid THE SAME amount of money on what they earned, I think they would surprisingly come to the table. At least on face value it sounds more commonsense than some of the other softhead thinking on incarceration for example, and is still under the plausable category, rather than fairy-thinking.

Notwithstanding, it seems prudent that internal efficiencies – finding methods of making their money travel further, and eliminating cash sinks – is a more appropriate method of ensuring tax dollars are wisely spent. Nobody needs it more than this Government – I only need to point to the GDE artwork, Al Grasby statues, the london bombing memorial, Siev X memorial, Aboretum II, and so on. There’s more WTF on this Government’s activities than a blog about black amputee hardcore toilet handjob porn.

Abolish all other taxes and introduce a debits tax – 1 cent for every dollar withdrawn from a bank account. Simple, easy to administer and is entirely egalitarian.

This also makes state governments obselete so we can get rid of that layer – saving billions in admin etc.

The Feds then run everything bar rubbish collection etc

EASY…..

But then who would pay for all the shit art?

They could reduce expenditure by getting out of silly, icing on the cake activities, and face up to the fact that they really are a town council, and focus on the essential things a town council should focus on.

Or Stanhope could do the (almost) unthinkable, and just increase taxes on gambling.

Also, while I may have been the one floating the idea of an ACT poll tax, should Stanhope decide it to be a good idea, I choose to bear no responsibility for any ensuing strikes or riots.

But I can’t see why it couldn’t be an option for consideration in the ACT.

PS: Not an economist, so it might have all sorts of second-degree consequences like altering birth rates, increasing our carbon footprint, etc.

I reckon vehicle registration charges should be tweaked – maybe some kind of formula involving the vehicle weight and engine size. Sure there would be rebates for primary producers (are there any real ones in the ACT?). It would help get some of the thirsty family 4WDs off the road, and help the environment at the same time.

Woody Mann-Caruso9:51 am 05 May 08

Don’t quote me on the donor state stuff, by the way – I haven’t read the 2008 update in any great detail. The donor status of SA and QLD in particular may have shifted.

Woody Mann-Caruso9:44 am 05 May 08

Our share of the GST revenue is adjusted to account for a shortfall in rates, land tax and payroll tax compared to other states.

The ACT has the fourth lowest fiscal capacity of all the States and Territories. If the ACT provided the average level of services to its residents, levied taxes at the average rates and received average revenue from SPPs, its fiscal position would have been $372 lower than the average of all the States.

However, we’re a ‘donor’ state under the CGCs horizontal fiscal equalisation agenda, receiving less than a per capita share of GST distributions (I think NSW, WA and Victoria other the other donors, with the NT, Tasmania and SA receiving greater than a per capita share).

See here for a plain-English overview of the relative fiscal capacities of each State and Territory. This doc gives a good overview of our unique economy and the factors driving (or hindering) our fiscal capacity.

Net worth taxes have been tried but the wealthy buggers just start moving all their assets to tax haven’s.

Apparently the original idea was that business leases were supposed to fold over for renewal after 25 years and then every 10 years after that, allowing the local Council to rezone/re-adjust lease clauses to suit. That was wiped out early in self government. This could of been a source of revenue for the council.

Given the Feds will never let us be a state and are happy to keep overturning ACT legislation we should get some “disenfranchisement” compensation built into the GST share.

I know every time some journo blames “Canberra” there should be an “Canberra bashing” tax …

VYBerlinaV8_the_one_they_all_copy9:24 am 05 May 08

Not a bad idea Skid, but let’s modify the idea to include an earnings threshold below which an individual would be tax exempt – there’s not much point trying to tax those with no money anyway.

An alternative is to tax a yearly percentage of an individual’s net worth, and to ignore income. Then of course we get to have the debate about how to calculate net worth.

Just introduce a direct poll tax?

VYBerlinaV8_the_one_they_all_copy9:20 am 05 May 08

Let’s raise the GST to say, 70% (or whatever is required) and remove income tax altogether. That way the more frugal pay heaps less than those who choose to consume.

Our share of the GST revenue is adjusted to account for a shortfall in rates, land tax and payroll tax compared to other states.

If we raise the GST to 17% we can abolish most state taxes, like stamp duty and land tax.

VYBerlinaV8_the_one_they_all_copy9:12 am 05 May 08

Don’t we get a share of the GST revenue? I suspect given the population of the ACT that this isn’t that much anyway.

Property is taxed a bit, but to me doesn’t seem like that much. If you’re careful, land tax will be fairly minimal (I think I pay a few hundred a year across each of my investment properties). Property prices are more to do with supply than taxes in the ACT, I think.

The alcohol tax increase is an interesting one, as I wouldn’t have thought that changing the tax rate would impact the people they were trying to target much, as the young (and underage) will simply spend what they have until it’s gone anyway.

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