The Gillard government today announced a levy on income taxes to pay for the Queensland floods: half a per cent on incomes over $50,000, one per cent on incomes over $100,000.
The floods are a disaster for all caught up in them. Our hearts go out to them. We are genuinely willing to help them in their time of need.
As usual, the devil is in the detail. The income tax surcharge means the repair costs fall on and reduce wages across the nation. Yet the beneficiaries of our compassion are landowners, large and small.
For anyone with a mortgage struggling to raise a family, that income tax levy is going to hurt – it cuts straight into capacity to save and discretionary spending.
Many people are hanging onto their homes and mortgages by the skin of their teeth. Some in this group will be tipped out on the street – an outcome that can be foreseen and will be directly attributed to the Gillard levy.
Why should this burden fall on incomes? Why not on tobacco, alcohol, gambling, petrol or other ‘sinful’ pursuits? Why not use this emergency to push through the much-needed mining tax?
In Canberra, Treasurer Wayne Swan is trying to find a face-saving formula that lets miners avoid paying taxes on their unearned increments of wealth. The revenues he is declining to capture could have funded all Queensland’s rehabilitation in a few short months.
Did you get that? A few short months.