Income tax cuts paid for by a Commonwealth Land Tax beats raising the GST

Cutting personal income taxes is definitely a good idea – especially at the lower end – as anything that encourages people to get up and earn a buck has merit.

Lift the tax free threshold to $30K – $40K

Index all the thresholds to CPI to stop bracket creep.

But how to fund income tax cuts is always a challenge (especially at the end of a massive historic mining boom).

A good start would certainly be to trim a few lazy, pork barreling, entitlement deductions as while it is always better to let people keep more of their wages rather than have pollies collect and recycle them, there is no reason to give out deductions and freebies to those who don’t need them.

However, a better alternative to waging an endless war on entitlements (Joe Hockey lacks the ticker to prune entitlements up the income scale) and jacking up the GST, which seems to be the trade-off that Joe has in mind, is a Commonwealth Land Tax just like we had from 1910 to 1953. Continue reading