Talking Points

Infrastructure: No Pork Barrel Needed

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In every marginal electorate, politicians promise to take revenue raised by nationwide or statewide taxes and spend it on projects that confer purely local economic benefits. This practice is corrupt and unnecessary — corrupt because a minority of taxpayers are bribed at the expense of the majority, and unnecessary because, if a project is economically […]

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Infrastructure: Free Riders on the Tollway

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The Mitcham-Frankston tollway, also known as EastLink, will reduce commuting times in suburbs serviced by the tollway and in suburbs serviced by alternative routes, such as the untolled Springvale and Stud roads, whose congestion levels will be reduced by EastLink. The market value of this benefit (net of tolls) will be manifested as uplifts in […]

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Globalisation: Shortcut to the Bottom

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In this age of internationally mobile capital, we are repeatedly told that if we want to attract and retain investment, we must make our tax system more “competitive”. Very conveniently for the investors, competitive taxes are taken to mean low taxes, in which case governments must engage in a “race to the bottom” — competitively […]

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The Progressive Flat Tax

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The flat tax fanatics are back. They say that if there were only one rate of income tax, the system would be simpler, and the rich couldn’t reduce their tax by converting one kind of income into another kind taxed at a lower rate. In the case of a pure flat tax — that is, […]

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FHOG Reloaded: New Home Builders’ Grant

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SPIN: The First Home Owners’ Grant (FHOG) helps first-time home buyers enter the market. FACT: More precisely, the FHOG helps first-time buyers to compete with other buyers who can use the equity in their old homes to bid up prices. But by increasing bids from first-time buyers, the FHOG also raises prices, especially at the […]

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The Property Owner’s Suicide Bomb

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In 1978 the voters of California, resentful of increases in property tax assessments caused by rapidly rising land values, enacted Proposition 13, which added Article 13A to the state constitution. This Article limited annual property taxes to 1% of the assessed value, capped annual increases in the taxable value until the property was sold, and […]

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The Self-Hypothecating Tax

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Opinion pollsters have consistently found that voters are more likely to support or tolerate a proposed tax if the revenue is hypothecated (i.e. reserved or “earmarked”) for a purpose of which the voters approve. They catch is: how can the voters know that the revenue will be spent as promised? For example, a rational property […]

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Taxation Vs Privacy

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If you own a piece of land, the State government wants to know. Why? Because you expect the government to enforce your exclusive right to occupy or let that land. Moreover, as the total supply of land is fixed, it is a matter of public interest that you are depriving other people of a certain […]

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Fairfax Spin on Land Tax

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Spin: The venerable D&J Evans Hardware store was unable to pay its $120,000 land tax bill. So it would be forced to close and 32 employees would lose their jobs [Russell Skelton, “Soaring Land Tax Costs Jobs, Investment”, Sunday Age, Nov.21, 2004]. Reality: The big news was buried in a subordinate clause further down the […]

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