Thoughts on Freedom

The government has reduced income taxes as at 1 July. But government inflation has eaten into our after tax spending power and they haven’t even handed back this bracket creep. Clearly our rate of tax is still way too high. If we removed the last three rows in the tax table below then we would have a half way respectable tax system. Ideally we would remove the last four rows from the table.

To licence or to not licence, that is the question the NSW government seems to have asked itself according to todays SMH. And at least for some professions the government seems to have concluded “why bother”.

Under the bill, expected to be debated in the upper house today, pre-purchase property inspectors, kit-home suppliers, lift mechanics and floor finishers and coverers will no longer be required to be licensed in NSW.

The Greens are upset.

“Licensing is an important mechanism to protect the public from dodgy operators,” the Greens MP John Kaye said. “It makes it easier to obtain redress for poor quality work. It is the first line of consumer protection.”

Perhaps. I operated in business for 10 years in an unlicensed profession (IT professional) and I’m far from convinced that licensing has much to offer either to consumers or to practitioners.  I’m inclined to see licensing as mostly just an added cost of business which is ultimately paid for by consumers. If consumers want licensed operators there are in any case voluntary professional associations that do much the same thing in terms of certifying credentials and the like.

But maybe I’m just biased. What should be a much easier cost benefit analysis, in regards to licensing reform, is the taxi industry. Even if we kept licensing for taxis the cost of obtaining a government taxi license* should not cost more than constructing a new house. Perhaps the government and the Greens could take a look at that regulatory stuff up. There is no public policy defense for taxi licences being so expensive.

* $390,000 for NSW in Feb 2008 – http://www.dpi.wa.gov.au/taxis/19458.asp

These days I listen to the radio a lot more than I used to. Steve Fielding has been interviewed many times this past week in regards to his questioning of climate science and asking whether CO2 is really the driver of global warming. He has been asking how temperature could be so flat over the last decade even as CO2 kept on rising. What has been painful to listen to has been Steve’s repeated introduction to such interviews with a deliberate statement that he is not a sceptic or an extremist. Painful because clearly he is a bit of a sceptic. And painful secondly because being a sceptic is somehow such a negative thing that Steve has to go into pre-emptive denial just to remain viable within the discussion. How did being a sceptic become so demonised?

What I also find notable is the media attention that a senator can attract. It is not as if the question he is asking has not been asked by others. In any case he seems to be handling the interviews with considerable ease. For those that have missed it here is a sample.

Okay I admit censusing probably isn’t a real word. Anyway whilst the ALP federal government, under the leadership of Kevin Rudd, refuses to sanction same sex marriages in Australia the Australian Bureau of Statistics (ABS) is apparently set to accept the reality of gay marriage in the context of the next census.

http://www.starobserver.com.au/news/2009/05/12/census-to-count-gay-marriages/13107

So gays can’t get married in Australia, but if they do find a place where they can get married then it will still count. Or at least be counted.

Over at Catallaxy there has been a bit of a raging debate about land value taxes. I find it all quite intriguing.

The argument for land value taxes is that they essentially entail no dead weight costs. Whether this is true or not is open to some debate however I think it seems reasonable to claim that they entail a lot less in the way of dead weight costs than most other taxes. So on that basis it would seem reasonable to suggest that as a starting point we abolish payroll taxes and make up the revenue via a doubling of council rates (assuming we have to be revenue neutral about such things). Both taxes currently amount to about 4.5% of total government revenue.

The following article argues that ironically a revenue neutral shift toward more land value taxation would in fact be good for current land owners. That whilst the land tax would pull down property values, the upward push on land values from the subsequent stimulus to economic production would more than compensate.

http://www.lvrg.org.au/

Read more »

HIV is something that mostly effects poor folk in Africa. Or at least thats what we generally tend to think. However the following video suggests that sometimes being richer correlates with higher risk. Perhaps simplistic assumptions don’t work.

In todays The Australian Bob Carr lays out his criticism of the current push in some quarters for an Australian Bill of Rights. One of his main fears is one of my main wishes, that any Bill or Rights should have something to say on our right to property. None the less in spite of opposing a set of rights that I’d actually be willing to advocate for, he does still make a reasonable case that anecdotally a Bill of Rights often does little to actually defend peoples rights. It is worth a read in spite of the disagreeable bits.

http://www.theaustralian.news.com.au/story/0,25197,25448539-5013871,00.html

I actually think we should have a Bill of Rights embedded within our constitution but I wouldn’t sign a blank cheque for this cause unless I knew ahead of time what actual rights we would be codifying.

The following guest post is by regular ALS reader P.M.Lawrence.
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I have now put a second submission into the Henry Tax Review, for the main part. In the faint hope of constructive criticism, here is the body of this one with my contact details removed and with links to the sources for the appendices:-

Submission to the Henry Tax Review

P.M.Lawrence

Incentives to increase employment and GDP that operate through the tax system, and scope for simplifying the revenue base and reducing its incidental burdens.

Summary

Recommendations (1a.), (1b.) and (1c.) cover a Pigovian virtual wage subsidy integrated with the tax system, to improve both employment and GDP without the problems usual with wage subsidies, Negative Income Tax, etc.

Recommendation (2.) covers reducing incidental effects of GST on investment.

Recommendation (3.) covers a lower compliance alternative GST approach, suitable for certain businesses.

Recommendation (4.) covers a lower compliance and more globally competitive alternative corporate tax approach.       

  Read more »

http://www.theaustralian.news.com.au/story/0,25197,25425726-601,00.html

The revamped CPRS legislation will establish a one-year fixed price period. Carbon permits will cost $10 per tonne of carbon in 2011-12, with the transition to full market trading from 1 July 2012.

So carbon trading gets turned into carbon taxing for the first year and the implementation gets delayed. Of course I’m cherry picking the good news.

The bottom line is that the coalition will support the go ahead for a carbon trading scheme. A new impost on the economy without any meaningful measures to provide offsetting tax cuts elsewhere.

This is the freedom ride
We will not go and hide
We have just come over here
To keep the public occupied
We are going to ride
Around the Adelaide Hills
We are hardworking people
Who pay the bills

So say the bikies in Victoria today, who may yet morph into a fully fledged political movement. In NSW this won’t stop the police from being able to outlaw them if they can find a judge to agree, because under the new laws in NSW even political parties can apparently be outlawed without any right of appeal (or even any right to be informed of such a decision). In fact as a member of a political party I could in fact be forced to avoid all contact with other members of that party at a moments notice if a judge has secretly agreed to outlaw the party in question. NSW may not be a police state but the levers have been put in place.

For a more complete account of the new laws check out “An Australian Gun Owners blog“.

Writing in todays The Australian, Giles Auty makes the case for neo-liberalism;

When Thatcher was elected, inflation in Britain was running at an unsustainable 23per cent and industrial and economic life were effectively held to ransom by a number of militant unions, including Arthur Scargill’s National Union of Mineworkers and the two notorious printing unions: the national Graphical Association and the Society of Graphical and Allied Trades.

Before Thatcher’s election Britain was regarded as an international joke: dispirited, unproductive and overtaxed. A friend of mine, children’s author Roger Hargreaves, was required to pay tax on his earnings at a rate of 97 per cent. Would or would not “economic conservative” Rudd have approved of such swingeing imposts?

http://www.theaustralian.news.com.au/story/0,25197,25389256-7583,00.html

Skepticlawyer is writing a novel. Apparently it is to have some libertarian overtones. She wants some input. Details here:-

http://skepticlawyer.com.au/2009/04/libertarian-writing-bleg/

Given her previous literary success it is likely that her finished product will have little trouble attracting publicity. Presumably she will use the vast royalties that she receives from the novel to buy us all a beer.

In March last year I shared my view that heroin usage should be decriminalised in Australia. Harry Clarke didn’t agree with my stance and in comments he asked that we think of the children:-

Almost all users iniate heroin use when they are young risk-takers. They are myopic in outlook with high discount rates. There are significant health risks of using heroin – your mortality each year is around 2% above the rest of the population. Heroin use is not a rational choice and there are no rational addicts.

I had argued that there were in fact few health risks associated with long term heroin usage. I don’t refute the higher mortality rate but it is primarily due to issues of legality and uncertain doseage. However lets assume for the moment that Heroin is a killer and ponder what we might do to reduce the number of children trying such drugs in the first place. A whitepaper published earlier this year by the CATO Institute looks at the situation in Portugal.

On July 1, 2001, a nationwide law in Portugal took effect that decriminalized all drugs, including cocaine and heroin. Under the new legal framework, all drugs were “decriminalized,” not “legalized.” Thus, drug possession for personal use and drug usage itself are still legally prohibited, but violations of those prohibitions are deemed to be exclusively administrative violations and are removed completely from the criminal realm. Drug trafficking continues to be prosecuted as a criminal offense.

The full report is worth a look. Of specific interest is the following chart which shows that following decriminalisation drug usage amoungst school students has actually declined. I wonder if this great news will persuade people like Harry to think of the children.