Bill Shorten has declared to the Melbourne Institute and later, on Insiders that Australia had a ‘two class’ tax system and that ‘ tax reform’ of negative gearing and tax concessions, maybe death duties and other ‘inequality’ taxes would be the thrust of Labor’s tax reforms.
Haven’t we heard this somewhere before – the old Marxist ideology of squeeze those perceived to be wealthy, supposedly to benefit the poor?
So who’s wealthy in Australia today?
Leaving aside James Packer and various CFMEU officials the average working Australian is paying off a mortgage, sending children to the schools parents want them to attend (State schools aren’t free these days) paying bills and maybe, just maybe, having enough left over to take the kids somewhere on holiday.
In other words, Australians are not the kind of people who sock their money into Swiss bank accounts or Cayman Island Trusts, buy gold bullion or Bitcoin currency.
Yes, people do use family trusts and negative gearing, legal instruments to minimise their taxes, used by thousands, including stalwart, solid Labor voters, trade unionists and rural families who want to preserve a property that has been the family farm for generations.
Wealth taxes simply don’t work as those politicians that tried have discovered.
In 2012 Nick Clegg, leader of the UK’s Liberal Democrats, proposed an ‘emergency wealth tax’, lobbying his Tory Coalition partners to ensure the wealthy shouldered a greater part of Britain’s economic pain. Clegg’s party already had proposed a ‘mansion tax’ to combat massive investment in luxury homes in Mayfair and other London suburbs from expatriate Russians and other foreign nationals. The Lib Dem vote just disappeared in the last election.
Last year UK Labour MP Dan Jarvis backed a Fabian Society (yes, you guessed right, they’re Left), proposal for a levy on ‘passive, unearned’ wealth for the richest 0.1 in Britain. That’s probably where Shorten pinched his ‘tax reform’ idea from, British Corbynistas.
Under Francois Hollande, French Socialists hailed the idea of a ‘wealth tax’ but, writing in the Washington Post Member of the European Parliament Dan Hannan found it had the effect of causing a full flight exodus of French businessmen and their families to Brussels, just over an hour’s commute to Paris. Asked a Belgian local of Hannan, ‘What kind of hell are these poor souls fleeing, if they see Belgium as a tax haven?”
In 2010, the Americans, with Initiative 1098, tried taxing individuals earning more than US$ 200,000 or households US$400,000. The Initiative went down like a lead balloon and Washington gave up on the plan. Wealth taxes don’t distribute wealth, they distribute people.
History shows, then, that attempting to tax wealth, or, for that matter, wealth creators (the reason many bestselling authors once left the UK for Ireland) is futile.
Does Labor really want rich Asians and other expats to leave our shores, taking their money but leaving behind their empty, serviced, luxury homes?
My friend in Mosman guesstimates her newly-arrived mainland Chinese neighbour spends at least $2000 weekly on food, her cleaner, her gardener, the nanny for her child (extra coaching in English on weekends). And there’s just the two of them in the house.
The Mosman lady could have gone to Vancouver or Bangkok or almost anywhere in the world. She chose Sydney and her lovely money is spent in that city on goods and services. Melbourne, where Bill Shorten lives, should be so lucky.
Class warfare is envious, divisive and ultimately counter-productive. Every migrant who arrives in the new country and struggles to succeed, maybe not in this generation, but for her children, keeping hope alive, knows that dream. Shorten’s patronising ‘economy vs business class’ imagery throws cold water on it, encourages despondency not optimism.
When your correspondent’s migrant parents arrived in this country they came with just 10 thousand pounds between them, five thousand being the maximum allowed to each adult immigrant and that was a lot more than many had, who arrived before or after them.
They were typical migrants of their time, living by the rules of work hard, live frugally, find good schools and take every opportunity offered to better yourself and your children.
They wouldn’t have listened to Bill for even a minute.
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