By Josh Bornstein
If economics was sexy, life would be very different. Thomas Piketty, the French professor who has recently published an acclaimed book about growing inequality, is now described as a “rock star economist”. But the truth is that the book is a boring read, and it is most unlikely that Piketty will imminently destroy a suite at the New York Ritz Carlton after a night of debauchery with six of his favourite groupies. And that’s a shame.
There is a compelling reason that economics is to sex as Fukushima is to Japanese tourism. It all comes down to language. Economists have a way with words. I call it the wrong way. The English language would be enhanced if all economists fell off a cliff. Harsh, I know.
Vertical fiscal imbalance. Hypothecate. Expenditures. Multi-factor productivity.
I better stop there before you lose control.
Yet in the economic lexicon, there is one word that is unlike any other. It has become so dirty and reviled that it is barely uttered in polite company these days. Surveys have shown that in the rage and crisis bubble that is contemporary Australia, the general population has developed a growing antagonism to it. We don’t like dealing with it. We resent it. It has become a bad thing.
Politicians go to extraordinary lengths not to utter the word. They use other words in its place. Like “revenue”, “receipts” ,”co-payments” and “levy”, hence a flood levy, NDIS levy and now a deficit levy. The treasurer, Joe Hockey, even experimented with calling it a “rabbit”. As in “no new rabbits” and “this is a big bad rabbit”. Our prime minister, Tony Abbott’s most recent guiding principle is to “cut it”.
I’m talking “tax”.
It is time to rehabilitate the word; indeed the notion. In doing so, we must learn to acknowledge- nay embrace- its innate goodness, decency and beauty. Of paying it, sharing in its bounty. Indeed, its infinite erotic potential.
The days of tax-shaming must come to an end.
Back in 2010 when Nathan Tinkler was a mining billionaire and star of the BRW Rich List, he had to file a tax return. In between making generous donations to his favourite politicians, he filled in the form declaring that his taxable income for the financial year was $9,834.00 . That’s it. Less than ten grand.
Now Nathan clearly had a hang up. It can happen. Even to billionaires. People feel awkward and can get squeamish about the subject. They are inclined to look the other way.They just don’t want to embrace their inner tax god. This is unhealthy and can’t go on.
When it comes to tax, we confront the perennial question: does size matter? There is only one answer and deep down in your nether regions, you all know it can’t be any other way. Of course it does. It matters a lot.
Time and time again the people step up to support bold progressive change – the Gonski education reforms, the NBN, a National Disability Insurance Scheme. At the same time, they reject the idea that they should pay more tax to do so. Economists like to borrow from psychologists who call this “cognitive dissonance”.
If everyone behaved like Naughty Nathan, we would inevitably confront a painful and potentially dangerous condition known as “base erosion”. And no, I am not talking about the condition notoriously suffered by first year University students as they limp to class on a Monday morning after a highly sociable weekend. Not that condition but the sort of erosion to our tax base that leaves us unable to function as the civilized, dynamic and wealthy country that we want.
Without people and businesses embracing a safe, consensual tax-life, there would be no schools, hospitals or roads and rail. There would be no Medicare, no social welfare system, no way of trying to ensure a sustainable environment. How do you think we fund a defence force or the NBN? Chopped liver won’t cut it. Tax will.
Tax is a good thing. Every time someone gets a tax cut, concession or avoids paying it, the rest of the tax-paying community has to pony up for the shortfall. Alternatively, people like pensioners, people with disabilities or the unemployed have to take the fall when tax reductions force governments to cut spending.
Many businesses and wealthy people routinely minimise paying tax. They structure their financial affairs and place substantial amounts of capital in tax havens like Jersey, the Cayman Islands and the Republic of Superannuation. Look no further than companies like Google and Westfield. For years, they’ve paid bugger-all tax. As a result, average wage earners are paying Westfield and Google’s tax for them.
I cannot let this rest. I will know I have succeeded when Bettina Arndt publishes her first book about the joys of having an intensely pleasurable and healthy tax life. With a foreword by Piketty. I can see it now on newsstands at airports, simply titled: The Joy of Tax.
