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by Luke Davis, independent contractor

I recently stumbled on a document which was presented to the 22nd APEC Finance Ministers technical Working Group Meeting in 2006 titled “A brief History of Australia’s Tax System.”

For those of you who don’t know much about how we ended up with our present day taxation it is an interesting read at 22 pages.

One of the most interesting charts I have seen (see below) presented itself on the second page of this document, which is a historical view on Tax to GDP since 1901. To me it raises a couple of interesting questions. How did the Prime minister at the time in 1941 get the Australian public to agree to a doubling in the amount of tax taken by the government? I am not certain which Prime minister it was at the time as it could have been Menzies, Fadden or Curtain but they certainly pulled a swifty on the Australian public.

The second question it raises is at what point in the Tax to GDP ratio governments shift from being symbiotes to parasites. I am using a limited definition of symbiote here, in which a symbiote does not kill the host, while a parasite does kill the host.

To the first question I can hazard a guess that is because Australia was in the middle WWII, but to the second I would be interested in finding out at what point Taxation strangles an economy.