Flat Tax Fruitcakes?

Most lazy web-nerd news consumers like myself are happy to rely on the crumbs thrown their way by numerous news websites providing a wealth of info you can access without paying dough.

But in recent times, I’ve managed to find some spare change to throw in the direction of the dude down at the corner store. Each day, a spare $2.50 goes into his cash till. I then get top stuff my brain with the latest sharpened news from the Australian Financial Review.

I could, of course, drive 15 minutes up to the Macquarie University news agency and grab the AFR for $1.25. I get the discount for being a life member of the Macquarie University Union (now known as “Students At Macquarie” or SAM). But who wants to spend all that time and petrol? At my most reasonable hourly rate, 30 minutes means around $100.

I’ll try to share some of the pleasures of the Fin Review with readers. Today, Fleur Anderson enlightens us on the re-emergence of a new flat-tax society consisting of present and past allegedly conservative MP’s.

This self-styled Modest Members Society is proving to be a thorn in the side of Mr Costello’s non-Sharia tax reform agenda. The society at present numbers around 40. It is said to arise out of a previous group formed during the Fraser government to support free trade and remove tariff protection.

The society is now championing plans to implement what is effectively a modified flat personal tax system. One plan being mooted is that of Dick Tanner, a film producer and Liberal Party man. He wants to see the $6,000 tax free threshold removed, and have a 15% personal income tax from incomes of $0 to $60,000. Anyone above $60,000 would be subject to a 30% tax rate.

This and other proposals were apparently mooted at a breakfast held last Wednesday 1 March at Parliament House. The Society’s founding members are listed as Wilson Tuckey from WA and Senator Grant Chapman from South Australia. It includes junior ministers and some newer faces including the talented NSW Senator and former Government lawyer Concetta Fierravanti-Wells.

Senator Wells wants to reduce complexity of the tax system. Her views were echoed in an opinion piece from Professors John Head and Rick Krever of Monash University, also appearing in AFR on the same day.

The learned authors noted that income tax law is hundreds of times thicker than it was when first adopted in 1915. They argued that: “The result is a law that achieves neither the equity nor efficiency goals of a well-designed tax and imposes significant and unnecessary compliance costs on taxpayers.”

The PM and Mr Costello aren’t prepared at this stage to hear a bar of such politically incorrect views on tax. They say Australians want tax cuts, not fundamental tax reform. As far as they’re concerned, flat tax is even harder to sell than Industrial Relations reform.

Except, of course, when it comes to the way GST moneys are distributed amongst the states. Battling the Premiers and Chief Ministers always makes good television.

© Irfan Yusuf 2006