Thursday, December 04, 2014

Colour me unconvinced

From The IPAustralian:
The OECD puts Australian governments’ tax take at 26.5 per cent of national income, bless than the unweighted average share of 34.1 per cent among the 34 member nations, a long-term discrepancy that has prompted trade unions, statists and welfare lobbies to argue for tax increases rather than spending cuts to fix the federal budget.
“We are constantly being told that Australia is a low-tax country, but that is a complete myth”, said Mikayla Novak, a senior research fellow at the Institute of Public ­Affairs who wrote the report.
“Adding in compulsory super and private health insurance mandates raises Australia’s effective level of tax,” she added, arguing that they added 4.7 per cent and 1 per cent of GDP respectively to Australian governments’ tax haul in 2011, lifting the total to 32.2 per cent.
Isn't it just a wee bit dishonestly inventive to call compulsory super contributions part of "the Australian government's tax haul"?   They've convinced Adam Creighton though, apparently.

I'm also looking at the graph at the article of some of those low taxing to GDP ratio nations that I'm sure we would all love to emulate - India, Peru, Russia, Philippines.   Yes, says the IPA, why can't we live in such happy and socially equitable countries like that?  


Anonymous said...

Super is part of what Americans refer to as total factor income and should therefore be treated as a tax. If you think the Medicare levy isn't a tax you really are stupid.

Not Trampis said...

Super goes to people not government. It is completely absurd to call this a tax!

The Private health levy not the medicare levy ( wow some people are very stupid)is more problematic.
People avoid that if they contribute to a private health fund.
I would put it as tax revenue.

Steve said...

I also wonder about Singapore. Doesn't their health funding work with a complicated system of compulsory contributions? Does the OECD add them into tax, and if they don't, then the Singapore tax ratio should be bigger too. (Not that I think any great lessons can be taken from that tiny city state. It's not as if they have anything like the challenges of providing services to a population spread over an entire continent.)