Tim Blair

Tim - I suspect Bush said this purposely, waiting with bated breath for an opponent to challenge him on it, so he can say something like this: 'Of course the rich don't pay taxes. Look at Teresa Heinz Kerry, for example.'

(This is in line with the theory "Steve H" recently pointed out: that Bush already anticipates and pre-empts objections in everything he says nowadays.)

well, how can a stupid cowboy possibly do such things?

That headline was nothing to the SMH today (Wed Aug 11) "Butler Furious..." the headline and the accompanying story supported the line that goes "Since Butler is anti-Iraq-war (IAW) he is good and trendy. Clearly too good and trendy for Tasmania"

The SMH overlooks his outrageous and incompetent (in the context) performance as Governor. You can argue that the post should not exist but you shouldn't take the salary. Unless of course he wanted to reform from "inside the system"?

You always get that from pinkos. They complain that the rich don't pay tax and when a government cuts taxes they complain that the rich are getting a tax cut. You can't get a tax cut if you don't pay tax.

Unfortunately, it's not just the SMH that's being misleading. Other news outlets are doing the same.

at the risk of preaching to the choir, what the hell is wrong with a flat rate tax, say 33%.

If I earn three or four times what Joe Average makes, I pay three or four times as much tax. For that, I don't get three or four times more government services.

At 33%, I keep $2 for every $1 the government takes.

Getting a bit more radical, why don't we move from a "one person one vote" system to one more like a shareholder democracy - the value of your vote is directly proportional to the average of your last three personal income tax bills.

Even better, why don't we get to nominate in our tax returns where our taxes get spent. Let the government of the day choose where to spend say half, but let us nominate the other half. Lefties can send their money to the unemployed, druggies, one-legged lesbians of colouyr and so on, and I'll send my money towards the two new aircraft carriers - ahem amphibious ships - for our navy.

Call me crazy, but that sounds like democracy to me.

How about we tax no one? After all tax is organised theft.

what the hell is wrong with a flat rate tax, say 33%

Way too high a rate. 10% should be plenty.

at the risk of preaching to the choir, what the hell is wrong with a flat rate tax

Diminishing marginal utility. With rich people, the utility of a given amount taken away by tax is much diminished compared to the utility of an amount taken away by tax from a poor person. So to minimise utility loss, the proportion of tax paid by poor people should be minimised.

I think Bush should have been more clear on what he meant. Something like - "The richest people won't pay taxes, because they don't earn wages like you and me. Whatever the highest income tax bracket is set at, they will ensure that they make just under that amount. They live off trusts, foundations, investments, etc. for the bulk of their money." When called on to provide an example of that, then he could jump in with "You'll have to ask Teresa Heinz Kerry about that. I'm a regular wage earner now."

Andjam,

Why does diminishing marginal utility matter when you look at taxation? The argument you use is for the justification of a "progressive" tax rate structure. Remember taxes are coerced, it is not a free will transaction.

The SMH's idiocy is completely expected. Last time I was in Oz, I stopped getting the SMH and switched to the Australian because the SMH seemed to take its news straight from the Labo(u)r press releases and parroted the worst anti-American nonsense from the BBC.

As for diminishing marginal utility -- that argument merely justifies penalizing the rich for having more money. Merely a prelude to more socialism.

That is the basis of graduated income tax rate schedules. The flat tax would be much easier to file and less apt to allow breaks to get any particular taxpayer off the hook at the expense of someone else. And it still results in higher incomes paying more.

Andjam: All flat tax schemes I've ever heard of exempted the first N-thousand in income from tax entirely, thus greatly reducing impact on The Poor, and in effect making the tax graduated at the bottom end.

Mr. Dodge: True enough, but even the majority of blue-skinned freaks (libertarians, the set of which I don't quite count myself a member, but have deep sympathy for) admit that government has legitimate purposes that can't reasonably be paid for by any means but taxation. (National defense, maintenance of the legal system, etc. Protection from fraud and coercion really are public goods that need to be provided to all citizens, regardless of their ability to pay for them directly. Thus, taxation.)

I agree. It was out of context, but it was a pretty stupid thing for Bush to say. Surely a better leader would have also committed himself to cracking down on tax-dodgers in the same breath.

I agree. It was out of context, but it was a pretty stupid thing for Bush to say. Surely a better leader would have also committed himself to cracking down on tax-dodgers in the same breath.

Why? That wasn't what he was talking about. He was merely refuting the idea that increasing the tax on higher income earners would solve deficit problems.

Quentin, the problem with Bush "...merely refuting the idea that increasing the tax on higher income earners would solve deficit problems" is that it attacks a prime assumption of the left. That it is also a misconception is immaterial. Bush dared question Their Doctrine.