The untitled “Canberra Observed” column by “Cato” (aka Maxwell Newton) in The Australian Financial Review, August 4, 1960, p. 2.

As Mr Holt ponders the shape of his coming Budget, he might also do a little pondering about the social effects of the changes in the shape of Australian taxation under his Government.

These changes have been sufficiently radical to allow us to ask whether the “progressive” content of Australian taxation nowadays is really as significant as the public finance textbooks would have us believe.

In the last decade total taxation revenue has risen more or less in step with the rise in the gross national product.

Between 1949-50 and 1959-60, we can estimate, while the gross national product rose by about 140 per cent, the total of Commonwealth taxation revenue had also risen by about 140 per cent, probably a little more.

So much for the brave words of “free enterprise” on which the Menzies Government was first brought to power.

If anything, we are probably a rather more heavily taxed nation than we were then.

Now who is paying the taxes?

Seemingly, a greater proportion of Australian taxation is now paid by the mass of the people than it was in the heady days of 1949.

While individual income-tax revenue rose by about 125 per cent in the decade ended June, 1960, indirect taxation revenue rose by more than 150 per cent and company income taxation by about 170 per cent.

If we assume, as we should in the Australian context of a relatively high level of monopoly power in the hands of individual businesses and business groups, that rises in company taxation are largely passed on in higher prices, then it seems that the much sharper rises in indirect taxes and in company-taxes have led to the ordinary members of the community bearing a larger share of the overall tax burden.

The diminishing proportionate importance of individual income-taxes as a source of Commonwealth revenue has led to a reduction in the “progressive” context of the tax structure as a whole.

In this important sense, the tax changes under the Menzies Administration have had a regressive effect.

To put the point more clearly, whereas in 1949-50 total collections of indirect taxes (Customs, excise, sales and payroll taxes) were about 10 per cent greater than individual income-tax collections, in 1959-60 they were about 27 per cent greater.

This has not been the only change.

Growing sophistication in the art of tax avoidance and the effects of inflation have naturally favoured the holders of property and the self-employed.

The openings for tax avoidance by the conversion of income into capital gains have meant a further shift in the proportion of the tax burden against what might be called the ordinary wage-plug.

Is this the proper trend of affairs under a Government that goes by the title of “liberal”?

(in order of appearance on Economics.org.au)
  1. Advance Australia fascist: The forces that make Australia a fascist country
  2. The Economic Guerrillas: A lecture in honour of Maxwell Newton
  3. Maxwell Newton Audio at Mises.org
  4. Max Newton on Video at first Mises Institute Conference (1983)
  5. Up the Workers! Bob Howard's 1979 Workers Party Reflection in Playboy
  6. Max Newton stars in Ron Paul video
  7. Bunny of the Welfare State
  8. The Crumbling Oligarchies
  9. Is Australia So Bad That It Can't Get Worse?
  10. Max Newton: Cauldron-Journalist
  11. Max Newton: a muckraker makes good
  12. An open letter to Bob Hawke, B. Litt., Oxon; from Maxwell Newton, B. A., Cantab.: In black and white
  13. Welfare Creates Poverty
  14. Welfare State a National Disgrace
  15. A "spy" replies
  16. Ron Manners on the Workers Party
  17. Josh Frydenberg vs Maxwell Newton on Sir Robert Menzies
  18. The traumatic birth of a daily
  19. The Bulletin on Maxwell Newton as Workers Party national spokesman on economics and politics
  20. Menzies: A Legacy of Lies and Legislation Limiting Liberalism
  21. Max Newton: Maverick in Exile
  22. King Leonard of Hutt River Declares Defensive Just War Against Australia the Aggressor
  23. Crying in the wilderness
  24. State aid and the privileged
  25. Maxwell Newton on Reg Ansett
  26. How to stop Labor running wild
  27. 1975 Max Newton-Ash Long interview on the Workers Party
  28. The Working Journalist in Public Administration
  29. Max Newton: controversy is an asset
  30. Maxwell Newton chapter of Clyde Packer's No Return Ticket (1984)
  31. The "irresponsible" way is the only way
  32. Maxwell Newton on Moral Hazard
  33. Maxwell Newton on Handout America and unbridled Welfare Mania in 1980 New York Post
  34. Tony Dear on Paul Krutulis, the Workers Party and murder
  35. Max Newton on the gold standard
  36. Maxwell Newton on ideas for cutting government waste
  37. Maxwell Newton on Bureaucracy
  38. Maxwell Newton measures bullshit tertiary schooling
  39. Australia's biggest newspaper insider on manipulating the media
  40. Never put your faith in politicians
  41. Profiting from propaganda
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